Helen of Troy, Owner of Hydro Flask, reduces SKU count by 18% in supply chain revamp
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As supply chain professionals, we know that a seamless flow of goods is essential to the success of any organization, and the Star Wars universe is no different. From the construction of Death Star to the delivery of lightsabers, the supply chain is at the heart of the galaxy's economy. So, grab your favorite Star Wars merchandise, and let's dive in! 🪐
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Helen of Troy, the parent company of Hydro Flask and Osprey, has reduced its product portfolio by 18% as part of a restructuring plan called Project Pegasus. This SKU rationalization will simplify the supply chain and reduce the inventory of less profitable items, according to COO and incoming CEO Noel Geoffroy. Additionally, the company plans to optimize its operational footprint by shifting more volume to a new distribution center in Tennessee and cutting approximately 10% of its global workforce.
Check out today’s featured article from Supply Chain Dive to read about the SKU cuts incoming for Helen of Troy manufactured products. Will the unit - and likely labor force - reductions optimize the company’s operational footprint? Or is this a sign of rough waters ahead for the brands under Helen of Troy’s umbrella?
Featured Article:
Osprey, Hydro Flask owner cuts 18% of SKUs in supply chain overhaul | Supply Chain Dive
“Consumer products supplier Helen of Troy has cut 18% of its product portfolio, part of the Hydro Flask and Osprey owner’s plan to overhaul its supply chain and offset rising costs.”
Network Association & Business Strategy 💡
Dollar Tree appoints former Dollar General executive as Chief Supply Chain Officer
Mike Kindy, who previously served as Executive Vice President of Global Supply Chain at Dollar General, has been appointed as the new Chief Supply Chain Officer at Dollar Tree. With over 34 years of experience in retail logistics and distribution center operations, Kindy will be responsible for reshaping Dollar Tree's supply chain and improving the overall performance of the company. He aims to achieve this by utilizing the right data, analytics, and automation to drive results.
Dollar Tree's CEO, Rick Dreiling, who himself is a former CEO of Dollar General, expressed his confidence in Kindy's abilities to build the company's next chapter of growth. Dollar Tree is a Fortune 200 company with over 16,000 stores in the US and Canada and reported strong financial results for the 2022 fiscal year. The company plans to share its business segments, growth strategies, and financial outlook in its upcoming investor conference in June.
Regulations & Compliance 📋
Lawmakers urge SEC to probe Shein's supply chain ahead of IPO
Bipartisan lawmakers have asked the United States Securities and Exchange Commission (SEC) to investigate Chinese fast fashion retailer Shein's business practices for evidence of forced labor from China's Muslim Uyghur population before its reported initial public offering (IPO). The SEC is being asked to conduct an "independent verification" process to certify that the company does not use Uyghur forced labor. Shein has denied any involvement in forced labor and claims to adhere to a strict code of conduct aligned with the International Labour Organization's core conventions.
This would be the second investigation into Shein's business practices this year, with South African regulators launching an investigation in March 2023 into the company's import practices. Shein is reportedly raising money ahead of a U.S. listing during the second half of 2023.
Let’s Get Global 🌎
🇨🇳 US chip companies see China as a valuable market despite potential risks. The Semiconductor Industry Association, a major US industry group, wants clear rules from the Biden administration regarding investment restrictions for chip companies in China. The association believes China is its biggest market and they need access to it, despite the US government's national security concerns. The administration is currently preparing to solicit bids from chip companies that want to build semiconductor manufacturing plants in the US, and rules will be proposed regarding what kinds of investments the companies can make in China.
📉 Tumbling container rates affect both spot and contract markets. Shipping carriers are experiencing financial difficulties as container volumes continue to decrease since mid-2022. Drewry's report showed a 2% decline in the WCI index, while the Xeneta report indicated a month-on-month decline in all regional trade lanes. CEO of Xeneta, Patrik Berglund, stated that carriers are in a difficult position as shippers hold the bargaining power during negotiations due to the decrease in demand caused by economic and geopolitical factors.
🚢 Sea Freight Rates from Asia to the US Rise as Companies Look to Regain Profits. Shipping companies are increasing their rates to ship containers from Asia to the US as they attempt to offset a fall in rates ahead of the importing season. The average spot-market price for a 40-foot container rose 34% over the past two weeks to $1,659, according to transport data firm, Xeneta. Shipping customers have accepted an average of around $400 of the proposed increases, marking the first hikes from carriers in more than a year and coming ahead of the traditional peak shipping season in the summer.
🇲🇽 Mexico lures more logistics investment from the US with nearshoring trend. U.S. logistics companies Redwood Logistics and BlueGrace Logistics are expanding operations in Mexico as the trend of nearshoring to the country gains momentum. Redwood Logistics is expanding operations into new offices in Monterrey, while BlueGrace Logistics is planning to enter the Mexican market by the end of the year. The expansion reflects the increased investment manufacturers are making in nearshoring to Mexico, with growth expected in sectors including electronics, automotive, appliances, and aerospace.
iLevel With You 🏡
More topics for the average American household to consider…
🔋Commercialization of Fuel-Cell Electric Trucks by Kenworth and Peterbilt. Paccar and Toyota have announced an expanded agreement to develop and produce zero-emissions hydrogen fuel cell Kenworth and Peterbilt trucks powered by Toyota’s hydrogen fuel cell modules. The partnership has been ongoing for several years, and it supports the development and commercialization of zero-emission versions of the Kenworth T680 and Peterbilt 579 models. Toyota will start assembling the modules in the US in late 2023, with trucks becoming available in 2024 and 2025.
🚙 Volvo plans to triple its electric vehicle dealership locations in one year. Volvo Trucks has expanded its number of certified electric vehicle (EV) dealerships in North America three-fold over the past year, and dozens more are in the process of gaining certification, as Volvo Trucks aims to increase its support ecosystem for the deployment of battery-electric trucks and equipment at scale. To get the Volvo seal of approval to be an EV dealer, a dealership’s sales, maintenance, and parts staff must be trained on the newer battery-electric vehicles. Volvo Trucks North America President, Peter Voorhoeve, said the success of the three-year Volvo LIGHTS project brought together 14 public and private partners to design and implement a blueprint for the support ecosystem necessary for commercial deployment of Class 8 battery-electric trucks.
🛣️ Interstate 55 in southern Illinois reopens after a devastating big rig accident. A chain reaction crash along a 2-mile stretch of Illinois’ Interstate 55 left six people dead and almost 40 injured on May 1. The collision occurred amid high winds, which raised dust from nearby farm fields and obscured visibility. Around 40 to 60 cars, as well as several tractor-trailers, were involved in the crash, which took place north of St. Louis and south of Springfield.
✈️ Supply chain delays affect United Airlines' plan to renovate its narrow-body cabins. United Airlines' plans to update its narrow-body plane cabins have been disrupted by supply chain issues. The airline was planning to update the cabins of 100 of its narrow-body planes by the end of 2022 but now expects that only 60 will be completed by that time due to a lack of supply for items like inflight entertainment systems, chips, and seats. The retrofitting plan includes bigger premium cabins, seat-back entertainment screens, and Bluetooth capabilities.
💰 Failure of First Republic Bank can indicate a banking crisis on the horizon. JPMorgan Chase has acquired the majority of the assets of First Republic Bank following the federal government's seizure of the regional bank. First Republic is the second-largest bank failure in US history, following Washington Mutual which collapsed in 2008 and was also acquired by JPMorgan. It follows the failure of Silicon Valley Bank and Signature Bank in March, but this banking crisis seems to be one that is unfolding slowly. The deal protects all of First Republic's depositors, but JPMorgan will not take on any of the bank's corporate debt or preferred stock, meaning that First Republic's shareholders and debtholders will be wiped out, as is typical in a bank failure.
🤖 Artificial Intelligence Could Displace Careers in Different Fields. Artificial intelligence (AI) and automation could lead to the loss of millions of jobs across various industries. Language models such as OpenAI's ChatGPT could replace jobs that involve written communication, including translation services and social media managers, and eventually automate tasks involving repetitive or manual labor. While AI technology will create new job opportunities in fields like data science, machine learning, and natural language processing, experts warn that negative impacts on the job market will still be significant, with around 300 million jobs potentially impacted by AI automation.
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Ramp up that brain power for these advanced topics…
💰 Ryder profits impacted by Bed Bath & Beyond's bankruptcy. Ryder System, a logistics and transportation provider, reported a $30 million asset impairment charge in Q1 due to Bed Bath & Beyond's bankruptcy, which impacted the value of the equipment used in a Pennsylvania warehouse. The company provided distribution management services for Bed Bath & Beyond, which recently filed for bankruptcy. This follows a $20 million asset impairment charge in Q4 due to the early termination of the retailer's distribution center in California.
🤝 UPS and Amazon remain interdependent despite their strained relationship. Amazon and UPS are shifting their strategies to reduce reliance on each other. While Amazon is building its own logistics empire, UPS is seeking more profitable deliveries from healthcare companies and smaller shippers. The number of Amazon packages handled by UPS has declined, and UPS revenue from Amazon has fallen from 13.3% in 2020 to 11.3% in 2022. However, UPS will continue to fulfill deliveries in areas where Amazon's logistics facilities are weak or non-existent. Amazon, on the other hand, is continuing its program of building sortation centers, delivery stations, and transportation infrastructure to increase its in-house capability. While Amazon may have a greater reliance on UPS in the future, it is likely to maintain its relationship with UPS to retain options.
🚛 In-cab cameras provide real benefits despite truck drivers' opposition. The American Transportation Research Institute (ATRI) released a report on driver-facing cameras (DFCs) in April. DFCs monitor truck driver behaviors and capture safety risks to improve training and prevent accidents. Some DFC systems continuously monitor the driver and cab but only capture noteworthy video events from a safety standpoint, while others provide live-streaming functionality. Despite the benefits of DFCs, many drivers are concerned about privacy and their reputation. According to a survey by ATRI, current users of DFCs rated approval at 2.24 on a scale of 1 to 10, while non-users scored it even lower at 0.96.
🚂 Logistics data reveals areas where the trucking and rail recession is manifesting. The decrease in inbound freight is impacting the trucking and rail sectors, resulting in weak performance and negatively impacting earnings. The decline in ocean bookings has resulted in fewer goods arriving in the US to be moved by train or truck, as a result of a decline in manufacturing orders. The trucking industry is facing challenges including the shortage of drivers and re-balancing driver workforces from California to other regions due to the drop in freight volumes.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 27, 2024, from iLevel Logistics Inc.