The Friday Report Blog: June 16th, 2023

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

Toyota to Invest $328 Million in Hybrid Pickup Facilities

Toyota is investing $328 million to expand its Guanajuato factory in Mexico to produce a new hybrid Tacoma pickup truck for the North American market. Announced by the state governor, Diego Sinhue Rodriguez Vallejo, during his visit to Japan, the development aims to meet the growing demand for electric and hybrid vehicles.

The expansion will generate 2,500 new jobs, supplementing the existing 1,700 workforce, and production is expected to start by the end of the year. Since its opening in December 2019, Toyota has invested $1.2 billion in the Guanajuato plant.

This investment strengthens Mexico’s position as a key hub for EV and hybrid vehicle manufacturing, alongside other automotive giants like General Motors, Ford, BMW, Audi, and Tesla, which are also investing in the country.

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Chewy Opens New Automated Fulfillment Center

Online pet retailer Chewy has launched a fourth automated fulfillment center in Nashville, Tennessee as part of its strategic plan to shorten shipping distances and reduce costs. The announcement was made by CEO Sumit Singh during a recent earnings call. The company anticipates an initial increase in expenses during the two quarters following the launch of the fulfillment center.

Chewy is currently redirecting volumes to its automated centers, leading to the closure of two of its older centers in Pennsylvania and Nevada. To enhance delivery times and cut costs further, the company is investing in Chewy Freight Services, an in-house linehaul fleet initially launched in Phoenix in 2022. The Tennessee facility joins the existing automated centers in Missouri, Nevada, and Pennsylvania.

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Walmart To Open Case-Ready Beef Facility

Walmart plans to open its first-ever owned and operated case-ready beef facility in Olathe, Kansas, in 2025, following a $257 million investment. This forms part of the company’s broader initiative to establish an end-to-end Angus beef supply chain. The new facility will create over 600 jobs and package a selection of Angus cuts from Sustainable Beef LLC, Nebraska, for distribution to Midwest stores.

In 2021, Walmart revealed its intention to acquire a minority stake in Sustainable Beef LLC and launched a private-label beef line, McClaren Farms, in Southeastern stores. The Olathe facility is a continuation of Walmart’s efforts since 2019 to develop its beef supply chain and deliver responsibly raised, “steakhouse quality” meats under its own operations.

This trend of vertical integration is enabling retailers like Walmart and Costco to control private label offerings, leading to higher margins, differentiation for customers, and reduced reliance on external suppliers.

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