The Friday Report: June 24th, 2022Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry
Baby Formula Plant Shuts Down for Second Time in Four Months
The Abbot baby formula plant that fueled the US baby formula shortage has closed again due to flooding, days after reopening. The Sturgis, Michigan facility has been embroiled in the baby formula shortage crisis that rocked the nation earlier this year. The plant closed in February because of bacteria contamination and suspended production of premium baby formula, EleCare. The closing of the plant caused massive shortages across the country. It reopened on June 4th.
On June 13th, high winds and thunderstorms caused flooding in parts of the factory. It was forced to close that day. There is no timetable for when it will reopen, however the company says that the nation has enough supply to last until they resume production.
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Japan Set to Drop Turbine into Ocean
Japanese dependence on fossil fuels is not much different than most countries throughout the world. According to data from the Japanese government, Japanese need for imported oil and natural gas grew by 8% from 2010 to 2016. During that period, the Fukushima crisis took a toll on its nuclear power output, dropping it from approximately 11% to less than one percent. These factors have culminated into Japan venturing into the power of the ocean.
To utilize tidal power, the IHI Corporation has developed a 330-ton tidal power plant. The plant contains five 66-foot cylinders with four 36-foot turbine blades that will use the force of water currents to produce power. The power will then be distributed into the Japanese power grid.
Although some countries such as Scotland have tidal power systems in place, Japan’s will not produce any significant increase in energy output. The Japanese tidal power plant is only able to produce 100kW of power, while onshore wind turbines can generate more than 6 million kW a year.
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Walmart Positions Itself for E-Commerce Take Over
Walmart is upping the ante against Amazon in its war for the E-commerce market share and will begin utilizing its stores as fulfillment centers for online purchases. Walmart plans to process orders through their online store and pick, pack, and ship products to consumers. These online orders also include individuals and companies that sell goods on the company’s third-party marketplace.
There are currently over 4,700 Walmart stores in operation throughout the nation. That means that 90% of Americans live 10 miles from a Walmart. The company wishes to expand on its localization to improve its e-commerce market share. Right now, Amazon has 39.5% of the online market share while Walmart only controls 7%. To increase its control of the e-commerce business, Walmart is set to utilize its stores as fulfillment centers. Personal shoppers at over 3,500 stores nationwide will pick items for customers and transfer them to delivery drivers. Consumers will be notified when their package is on the way. Using this method, Walmart states that they can reach approximately 80% of the US population using same-day delivery. Walmart hopes these measures will attract independent sellers to its third-party marketplace, Walmart Fulfillment Services. The service will provide supply chain services ranging from storage to shipping to third-party sellers like Amazon’s marketplace.
Walmart predicts that its drone delivery service will also give its market share a boost. The service is set to operate at 37 stores across six states and be able to reach 4 million households by the end of 2022. The company is also set to launch a delivery subscription initiative to increase online customers. For $98 a year, a customer can get free shipping on online purchases and groceries. This service will be available to roughly 30 million households by years end.
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