Supply Chain Weekly Wrap-Up: 03/13/20 – 03/19/20

European and North American manufacturers shut down as China comes back online

As the coronavirus outbreak continues, many large manufacturers, particularly those in the automotive sector, are shutting down their factories across Europe and North America.  The effects of the factory shutdowns will quickly ripple through the supply chain to impact the suppliers, logistics partners and other businesses that work with manufacturers on a regular basis, especially for just-in-time manufacturing operations.

Ford, Volkswagen and Fiat Chrysler Automobiles are among the companies that have decided to temporarily shut down their manufacturing facilities across Europe. Tesla has also suspended production among its U.S. manufacturers while Ford and General Motors have temporarily stopped production across all their North American factory locations.  

In contrast as factories across Europe and North America stop production or put in place new measures to keep operations going inline with current guidance, factories across China are coming back online after extended factory shutdowns at the beginning of the year due to the outbreak.

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Costco ups its last-mile logistics game

Costco Wholesale has upped its last-mile logistics game, with the completed acquisition of Innovel Solutions, a last-mile logistics specialist, at a time where the demand for last-mile delivery services has increased due to the coronavirus outbreak. The warehouse grocery chain paid $1 billion in cash for the company, which was a subsidiary of Transform Holdco, the parent company of Sears and Kmart.

The acquisition will help Costco deliver large items to its customers, which is Innovel’s area of expertise. Innovel currently operates 11 distribution centers and more than 100 last-mile cross-dock facilities, which help with the unloading of materials from trucks or trains directly to the vehicles that deliver them to consumers. According to a statement from Costco CEO, Craig Jelinek, “We believe the acquisition will allow us to grow our e-commerce sales of big and bulky items at a faster rate”.

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Amazon to hire 100,000 workers to meet demand

Amazon has announced that it plans to hire 100,000 new workers for warehouses and delivery services in the United States due to the increased demand in online shopping for supplies due to the coronavirus outbreak.  The announcement that the Amazon is hiring new workers comes at a time where many companies have been forced to cut jobs due to the effects of measures put in place to slow the spread of the coronavirus outbreak.

The new jobs will include both full and part time positions “to meet the surge in demand from people relying on Amazon’s service during this stressful time” particularly those most vulnerable to being out in public, according to Amazon executive Dave Clark.  It comes after Amazon acknowledged last week that it was experiencing some disruption with many household goods being unavailable on their website and deliveries taking longer than usual.

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Have a great weekend!