The Friday Report: April 24th, 2020

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

Leveraging Its Logistics, Amazon Opens PPE Store to Healthcare Workers, First Responders and Governments

Without much fanfare, Amazon opened a nonprofit store to provide personal protection equipment and needed medical supplies for the fight against COVID-19.  Known simply as “COVID-19 Supplies”, the online store is open only to medical professionals, emergency responders and government agencies and sells items including surgical masks and face shields, digital thermometers, exam gloves, sanitizer and ventilators.

COVID-19 Supplies is available to federal agencies, police and fire departments, hospitals, ambulance crews, nursing facilities and physician offices.  Amazon made a deal with Urgent Response Network to supply N95 masts, isolation gowns, gloves and ventilators through the new COVID-19 Supplies store. The medical supplies and equipment are being manufactured in Taiwan, Korea, China and Mexico.

Buying FDA approved personal protective equipment and medical supplies from trusted parties, Amazon takes possession of the supplies directly from the manufacturer and then ships them to fulfill each order.  Amazon requires proof of the custody of goods to check to see how many times they changed hands to eliminate middle men and brokers.

Retails Wrangle with Returns Processing During COVID-19 Outbreak

Insult, meet injury.  On top of the many challenges with which retailers are now dealing, comes the problem of how to detail with the many returns consumers want or need to make.  Closed for now, major retailers including Macy’s and Gap have extended their return windows to accommodate shoppers.  Many retail businesses are operating online operations but only with reduced staffing. 

Retailers know that being able to get consumers back into stores to do the returns in person is critical for sales as many consumers will buy goods while shopping in person.  Apparel is an especially problematic item.  This is due to several factors including seasonality, fashion trends and the need for special occasion wear for events and occasions that are all put on hold.

The COVID-19 outbreak is believed to be shifting consumers from physical retail to online shopping.  With an average return rate of 17% on apparel, retailers are struggling to handle the returns process.  The big question is, will retailers be able to resell returned goods or will fears of coronavirus linger, given the fact that it can last for days on surfaces?

Mexican Manufacturers Feel the Ripple Effect of U.S. COVID-19 Outbreak

Because Chinese factories produce materials and goods for use in other products made around the world, the Mexican auto parts and electronic factories are now experiencing challenges originating from the shutdown or plants in China earlier this year.

Production schedules have had to be modified due to the delay in imports from China and production has been slowed.  While this seems to be temporary, a long-term threat to Chinese manufacturing is taking hold.

The coronavirus outbreak did bring to light some significant issues with supply chains for various types of goods.  The overall impact, at this point, seems to be increased nearshoring, moving more industries into Mexico.  With the new Unites States-Mexico-Canada Agreement signed, manufacturing across North America is encouraged.

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