It must be like having a term paper hanging over your head every morning. This is the way one of my colleagues described the way I must feel when I sit down to write my daily post. On some days, this is an accurate description, but the challenge is not a lack of topics to write about. On the contrary, the main cause of my occasional bout with writer’s block is having too many choices (i.e. information overload).
I’m trying something new today. Instead of focusing on a single topic, I’m going to highlight several news items from this week that I believe are noteworthy, even though they didn’t make the cut for a standalone piece.
As the economy worsens, so does the relationship between retailers and suppliers, especially in grocery. According to an article in Wednesday’s Wall Street Journal, Brussels-based Delhaize (which operates the Food Lion chain and other grocery stores in the U.S.) has pulled about 300 Unilever products from its shelves because the company believes they’re priced too high. Part of the argument is that price increases earlier in the year, due to record oil and commodity prices, are no longer justified now that these upstream costs have come down. From Unilever’s perspective, private-label brands are an ongoing threat and they need to take action to protect their margins and maintain their shelf space. You can read the article for all the details behind this action, but it’s just another chapter in the age-old battle between retailers and suppliers in their respective quests to maximize profitability. Is it possible to talk about supply chain collaboration these days without laughing?
Unfortunately, strained relations between manufacturers, retailers, and wholesalers will likely continue in the months ahead. On Tuesday the Commerce Department reported wholesale sales and inventories data for December. According to a related article in BusinessWeek, wholesalers reduced their inventories in December by the largest amount in almost 17 years, and more reductions are expected, as the inventories-to-sales ratio is at the highest level since March 2002.
Monthly Inventories/Sales Ratio for Wholesale Trade (Source: The Commerce Department)
The day after I wrote “The Slow Progress of Green Supply Chain Management,” Ryder announced that it published its first Corporate Responsibility Report. I haven’t had a chance to read it yet, but you can download it here. In other “green” news this week, Microsoft announced the general availability of the Environmental Sustainability Dashboard for Microsoft Dynamics AX. Other software vendors have come out with similar solutions, a sign that a growing number of companies are interested in tracking green-related data. However, like all dashboard applications, the real challenge isn’t presenting the data, but collecting it and using standard metrics (see this related posting).
Finally, RedPrairie disclosed some financial results for 2008, including yearly revenue growth of 15 percent to almost $300 million. It’s not every day that a privately-held software company discloses financial information, but in this economic environment, I can understand their motives for highlighting their success. The press release, however, did not provide any detail about the fourth quarter, so we don’t know how the last three months of 2008 compared against the rest of the year or Q4’07. The real test of how well or poorly the logistics software market is performing will be Q1’09 results. Nonetheless, any good news is welcomed these days. I should also note that JDA and i2 Technologies both announced better-than-expected financial results last week, despite their failed merger.
Enjoy the weekend and see you on Monday…unless, of course, I win tonight’s $85 million MegaMillions jackpot, in which case I’ll likely develop a permanent case of writer’s block.
