The Friday Five: Google launches supply chain pilot
Google helps fashion brands monitor supply chain for sustainability [Netimperative]
Google has teamed up with luxury fashion brand Stella McCartney and fashion innovation consultancy Current Global to develop a new supply chain tool. The tool has been designed to help companies add visibility to their supply chain at the raw material stage. It uses data analytics and machine learning on Google Cloud to give brands a more comprehensive view into their supply chain, particularly concerning cotton and viscose production.
The project was announced at the Copenhagen Fashion Summit this week, and is set to launch early next year. The machine learning technology will be used to help brands estimate the environmental impact of particular items of clothing at the sourcing and design stages, and use this data to help companies take action. The pilot has been launched in response to the growing environmental impact of the fashion industry. According to Google, the fashion industry accounts for 20% of wastewater and 10% of carbon emissions globally.
Tariffs Could ‘Upend’ the E-commerce Supply Chain [AdWeek]
Despite President Trump’s assurance that the trade war with Chinese President Xi is “very bad for China, very good for the USA,” it is increasingly likely that manufacturers, retailers, and consumers in both countries will feel aftershocks. Production may shift away from China, third-party sellers may raise prices and consumers may find a more limited selection.
The new tariffs make many private-label products on the lower end of the 30-to-40% profit spectrum not worth sourcing anymore. Khazi agreed on low-profit third-party sellers with affected products can raise prices to pass on the incremental cost to consumers. Last year, manufacturers in China produced more goods for Americans than any other nation, but potential tariffs on electronics and high-value items, in particular, could shake up the manufacturing landscape for those sectors.
Walmart Extends Streak of Sales Growth [Wall Street Journal]
Inventory is piling up at Walmart. The retail behemoth's lean supply chain is being tested as it amasses more goods to win market amid the collapse of niche storefronts and to speed up online delivery. Inventory jumped 5.9% in the first quarter as Walmart loaded up on patio furniture and bought more toys and shoes to fill gaps left by as Toys “R” Us and Payless ShoeSource.
The retailer is also putting more inventory at e-commerce fulfillment centers that are the linchpin of its plan to expand free next-day shipping. U.S.-China trade tensions also played a role, as Walmart pulled some imports forward ahead of rising tariffs. Carrying more inventory can add costs, but Walmart’s U.S. operating income grew 5.5% in the first quarter as transport costs moderated and online sales margins improved.
Digital Freight Brokers Turn Physical With Truck Equipment Pools [Wall Street Journal]
Digital freight marketplaces are getting more physical as they try to get a bigger slice of the U.S. cargo market. Freight-matching startups Convoy and Uber Technologies Inc.’s freight unit recently launched truck-trailer services providing equipment that shippers preload with goods to help speed up the flow of shipments and trucks.
It’s a notable shift for a sector that’s been rolling out apps, algorithms and machine learning tools to lure business away from traditional freight brokers. The trailer pools are a freight version of the moves by online retailers like Amazon.com Inc. and Wayfair, whose brick-and-mortar storefronts blur the lines between digital and physical commerce. The “drop-and-hook” operations being rolled out by business including J.B. Hunt Transport Services’ digital brokerage can make carriers more productive. They also mean the online brokers are managing assets, potentially complicating their operations.
Logistics companies call for 'basic infrastructure' investments [Supply Chain Dive]
Postmates, an app-based delivery service, and Embark, an autonomous trucking company, called for the government to invest in "basic infrastructure" rather than chasing the latest Silicon Valley trends at the Global Supply Chain: Future Trends 2019 conference at the U.S. Chamber of Commerce Thursday.
As high-tech investments like autonomous trucks and delivery robots become cheaper, supply chain managers will have to be prepared for more vehicles on highways, city roads, and sidewalks — something that is already exacerbating existing congestion and last-mile delivery issues. Sound infrastructure will be necessary to handle the large volume of trucks on the roads — driverless or not.
Greg Hastings, an associate partner at McKinsey & Company, said short, disruptive planning cycles that make startups and their supply chains so successful are often out of step with the city and federal governments' five- to 25-year planning timelines. Therefore, it is critical to look at what investments are needed with a long view. "The strategy is making the long term investments that will give us the flexibility to make ‘no regrets’ investments as new technologies come up and get incorporated," said Hastings.
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