This Week in Logistics News (January 8-12, 2018)

What can I do if I have writer’s block?

Well, I could turn to an AI-powered robot to my write my post for me (see Wired article, “What News-Writing Bots Mean for the Future of Journalism”). Or I can just wing it and go straight to the supply chain and logistics news that caught my attention this week.

I’ll let you guess which option I took this morning.

Target reported this week that its holiday sales increased 3.4 percent compared to last year, a big turnaround from last year’s disappointing results. The most interesting detail is how aggressively Target has transformed its stores into fulfillment centers. Here are some details from the Wall Street Journal:

At the heart of Target’s strategy is utilizing what the retailer has (and Amazon doesn’t): a base of more than 1,800 brick-and-mortar stores that the company is increasingly using to fulfill orders placed online. Under that strategy, employees take items from a physical store and ship it to customers, which allows  Target to ship orders faster and avoid some costs related to distribution and fulfillment centers.

Target said Tuesday that 70% of its digital orders in November and December were filled in stores–either through in-store pickup or by shipping directly to customers [emphasis mine]. Target didn’t release a comparable figure for the previous holiday season, but the company has said over the past year that it is redeveloping more stores to act as distribution centers.

Meanwhile, Walmart announced yesterday that it is closing 63 Sam’s Club stores — but about a dozen of these stores will become e-commerce fulfillment centers to help support e-commerce efforts.

Hey Sears, are you paying attention here? The retailer recently announced that it is closing another 64 Kmart stores and 39 Sears stores. Six years ago Sears had 3,510 stores; today it only has 940 stores. Maybe they’re a lost cause already, but it seems to me that if there’s any hope for Sears to turn its fate around, the strategy must include leveraging its remaining stores as e-commerce fulfillment hubs.

Remember that patent Amazon filed back in November 2013 that envisioned sending 3D manufacturing instructions to a truck equipped with a 3D printer that could manufacture an ordered product while enroute to the customer? Well, the patent was issued last week. For my commentary about this patent, please read my March 2015 post, “Amazon’s 3D Printing Trucks: A Quixotic Quest for Zero Delivery Time?” Here’s an excerpt:

While the headlines of 3D printers on trucks grab our attention, the bigger takeaway from the Amazon patent application is that 3D printing — whether in our homes and offices, retail stores and distribution centers, or on trucks — will play a growing role in e-commerce and order fulfillment in the years ahead. In many cases, especially as the capabilities of consumer 3D printers improve and their costs decrease, we will completely bypass distribution centers, stores, and trucks and manufacture the products we order ourselves. Actually, what we will order and pay for on sites like Amazon.com will not be a physical product, but the manufacturing instructions and the printing materials. In other cases, where more sophisticated and expensive 3D printing capabilities are required, third-parties will manufacture the products on demand and deliver them to us (or we can pick them up at the local UPS Store, for example).

Moving on to transportation news, Transplace announced that Frank McGuigan has been named chief executive officer, while previous CEO Tom Sanderson has transitioned to the role of executive chairman and will serve on Transplace’s board of directors.

I typically don’t comment on management changes, but Frank has been a guest on Talking Logistics several times, most recently in October 2017 to discuss “A Sustained Market Shake-up: What M&A Activity Means for the Transportation and Logistics Industry.” I encourage you to watch my conversation with Frank for some great insights on this topic.

On the technology front, HERE Technologies announced an expanded partnership with SAP to offer location-enhanced business applications. Here (no pun intended) are some excerpts from the press release:

HERE Tracking plans to integrate real-time tracking services into the SAP Global Track and Trace solution, providing developers with the ability to take advantage of real-time, low-energy, high-accuracy technology to track goods across the supply chain, indoors and outdoors.

As part of the agreement, HERE also plans to integrate several of its location services into SAP Transportation Management, software that enables enterprises to manage their global and local shipping activities across all transportation modes and industries. Customers in the transport and logistics industry can benefit from embedded, intelligent location services that help increase productivity and efficiency. Among the new functionalities enabled by the HERE Open Location Platform are optimized fleet routing based on real-time and predictive traffic, real-time tracking and post-trip analysis.

Simply put, this is another data point underscoring one of my supply chain and logistics predictions for 2018 — that “Supply Chain Visibility Will Get Clearer, More Real-time, and More Predictive with Machine Learning and Enhanced Data.”

Location data — which I call the “Where?” dimension of supply chain visibility — is one of the cornerstones of enhanced visibility, and based on other recent announcements by HERE (see its HERE Tracking announcement last month), the company is certainly expanding its focus and investments in the logistics realm.

And with that, have a happy weekend!

Song of the Week: “Push + Pull” by July Talk

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