Walmart Sees Sharp eCommerce Sales Rise, Looks to Vendors to Help Fund Investments
Walmart's ecommerce sales were up 60% in its most recent quarter, according to its earnings report in August. However, much of that growth is coming as a result of its acquisitions of Jet.com, and smaller etailers such as ModCloth, Moosejaw and ShoeBuy, not from purely organic growth as is the case with Amazon.
The Walmart news on the brick and mortar side was also positive, with same store US sales up a strong 1.8%, the 12th consecutive quarterly increase in that metric. But Walmart is finding like Amazon that it takes a ton of investment to drive that growth.
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| Across all industries, especially long supply chains with product coming from Asia, blockchain may allow total cycle times to be reduced from increased visibility about where product movements are slowing. |
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The Wall Street Journal reports that over the past year Walmart has used automation to replace some jobs and laid off more than 1,000 corporate employees. But as usual, Walmart is also looking to vendors to help fund many of its investments by pressuring vendors to cut their prices, increasing the fees they pay to pass inventory through its distribution centers, and narrowing the shipping window vendors must hit to avoid fines.
Is there an opportunity for your company to use vendor performance management to deliver cash to fund omnichannel investments, as Walmart is doing? That is certainly worth a look.
Is Blockchain Tracking in Your Extended Supply Chain Future?
In late August, IBM announced 10 food industry companies had recently signed up with IBM to test the use of so-called blockchain technology for tracking the movement of food products across the global supply chain. The goal is to increase visibility and reduce risk.
Participants in the test include Nestle, Unilever, Kroger, McCormick & Company, Dole Foods, Golden State Foods, Driscoll's, distributor McLane, and Tyson Foods. They all join Walmart, which began a blockchain pilot with IBM last year.
Walmart has said that in the trials the time it took to trace the movement of mangoes fell to 2.2 seconds from about seven days without blockchain. It added that a single product recall could cost anything from tens of thousands to millions of dollars in lost sales - a risk block chain may be able to reduce through better visibility and awareness of emerging supply chain issues. The scale of a given recall might also be reduced from the improved visibility and traceability.
A blockchain is a data structure that makes it possible to create a digital ledger of transactions and share it among a distributed network of users. It uses cryptography to allow each participant on the network to update the ledger in a secure way without the need for a central managing authority, even across disparate companies.
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Once a block of data is recorded on the blockchain ledger, it's extremely difficult to change or remove. When someone wants to add to it, participants in the network - all of which have copies of the existing blockchain - run special algorithms to evaluate and verify the proposed transaction. If a majority of nodes agree that the transaction looks valid - for example, that identifying information matches the blockchain's history - then the new transaction will be approved and a new block added to the chain.
So in a blockchain network, all participants - vendors, transportation providers, ports, etc. - update information on the movement of goods all the way to final destination, providing end-end-end visibility, though of course each entity has to agree to participate.
While the safety and recall aspect makes the food industry especially ripe (pun intended) for use of blockchain, other sectors could also benefit. For example, in the apparel industry, blockchain could be used to better track the actual supply of garments to ensure only authorized/approved vendors were used - a huge problem in the industry.
Across all industries, especially long supply chains with product coming from Asia, blockchain may allow total cycle times to be reduced from increased visibility about where product movements are slowing.
Robotic Sewing Coming to Arkansas - and Maybe Your Vendor List
Chinese clothing manufacturer Tianyuan Garments Company announced in late August that it will open a new garment factory in Arkansas next year, which will run primarily with the use of autonomous robots and a few human supervisors.
Once factory operations are in full swing, the 21 production lines are expected to produce 1.2 million T-shirts annually, at a total production cost that's competitive with apparel companies using low-wage countries to manufacture garments, the company says. Tianyuan Garments Company is one of the first businesses to use the sewbots, which could advance apparel supply chains in coming years - and bring some manufacturing back on-shore.
Atlantas-based SoftWear Automation developed the sewbots that will be used in Tianyuan's new factory. In 2012, researchers received a grant from the Defense Department's technology innovation wing, DARPA, to work on the sewbot concept and form SoftWear Automation. Two years ago, SoftWear Automation began selling sewbots that could help produce bath mats and towels. The company's newest robot models will be deployed in the new factory and have the capability of making many apparel items, including T-shirts and jeans.
Computer vision is the key technology behind the sewbots, used to analyze and watch fabric so the fabric can be advanced through the sewing process efficiently and with quality.
For now at least, the robots are best used for simple garments, with humans still needed to stitch more complex goods. But this is something to keep an eye on for sure.
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