The Friday Five: Coronavirus hits supply chain
Coronavirus could hurt iPhone sales in China and Apple’s supply chain [CNBC]
The coronavirus outbreak, which is stopping travel in parts of China, could affect the supply and demand for Apple products expected to launch in the first half of 2020. Those products include a new wireless charging mat, high-end headphones and a new less-expensive iPhone model. Kuo writes that consumer confidence in China has dropped in the wake of the coronavirus, and he expects that smartphone shipments overall will drop, potentially hurting Apple.
Amazon Revenue Jumps on Holiday Sales as Profit Rises [Wall Street Journal]
Amazon is getting its money’s worth from its shipping spending. The company’s fourth-quarter sales jumped 21% to $87.4 billion and its profit rose 8% to $3.3 billion capping a strong holiday quarter that saw the e-commerce giant outpace its retail competitors and helping boost Amazon’s valuation in after-hours trading past $1 trillion. The company is paying heavily to deliver those goods, racking up nearly $12.9 billion in world-wide shipping costs in the quarter, 42.5% more than the year before. The spending has soared as Amazon has bulked up its network of warehouses and delivery drivers—world-wide shipping costs have more than doubled in three years. But third-party sales are growing at double the rate of Amazon’s own online sales.
UPS, Amazon Grow Closer as FedEx Goes Its Own Way [Wall Street Journal]
United Parcel Service Inc.’s close work with Amazon is working out very well for the package carrier. The package giant's shipping volume and operating profit jumped sharply in the fourth quarter as UPS gets cozier than ever with the largest online retailer in the U.S. while rival FedEx Corp. focuses on retailers competing with the e-commerce behemoth. Amazon now makes up 11.6% of the company’s annual revenue, but that other major retailers all are shipping more with the carrier. The company’s pricier air express services grew at a double-digit pace during 2019, including a 25.9% year-over-year gain in next-day air shipments in the fourth quarter. FedEx’s overnight air shipments have declined in three of the past four quarters.
McCormick plans to drop up to $350M on transition to SAP ERP [Supply Chain Dive]
McCormick, the food manufacturing company, is bringing disparate Enterprise Resource Planning (ERP) systems into a single SAP HANA environment. The company doubled in size since it last upgraded the ERP system in the early 2000s. The new ERP system went through the planning and building phase in 2019 and will be run in pilot implementations throughout 2020 with full deployment between 2021 and 2022. The full cost of the transition is expected to be between $300 million and $350 million.
SEKO Logistics and Air & Ground World Transport Announce New Partnership [SupplyChainBrain]
SEKO Logistics and Air & Ground World Transport have signed a strategic partnership to create new cross-border opportunities for shippers doing business between Asia and the United States. Working together, SEKO and AGWorld will offer clients a platform of services to develop new trade relationships, leveraging AGWorld’s network of offices in Asia and SEKO Logistics’ more than 120 branches in 40 countries. Clients based in Asia or buying goods from suppliers in the region will gain immediate access to SEKO’s 60-branch network across North America as well as its demand chain solutions.
Thanks for reading! Don’t forget to check out last week’s news and stay tuned for our next Friday Five roundup!
Connect with Slync.io at these upcoming events:
- TPM20 | March 1-4, 2020 | Long Beach, CA
- NG Supply Chain Leadership Summit | March 16-18, 2020 | Scottsdale, AZ
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