Supply chains are constantly changing as new rules, technologies, resources and market trends transform operations. Here's a skim of the week's indexes, technology announcements, expansions and M&As from around the web.
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Market Snapshot
CB Insights released some data this week revealing a dubious investor outlook for e-commerce startups: Q1 2017 saw many “exits” from the market, but Q2 saw another surge, while investment in the entire e-commerce market has declined throughout H1 2017. According to the data, e-commerce subscription sites have seen almost a 20% downturn in deals this year compared to 2016.
Despite the uncertainty, companies and industries affected by e-commerce are blazing ahead, assuming that the e-commerce market will continue to grow. Amazon continues to announce new distribution centers and hire new workers for existing ones, while 3PLs like FedEx and UPS keep opening up new processing facilities and hiring thousands of workers to run them.
Delivery services such as DoorDash and logistics companies including DHL are investing in better delivery options to better meet consumer expectations, and as a recent Flexe survey pointed out, the reason retailers are struggling is because they’re failing to accurately gauge and meet consumer expectations for fast, free or cheap delivery of goods bought online.
Of course, as e-commerce subscription sites have consolidated and struggled, it’s no wonder investors are wary of throwing money at the market. It’s a market still in flux, and there will be more consolidation before it stabilizes. Meanwhile, companies continue to refine their supply chains and logistics networks to better accommodate the e-commerce effect, as consumers increasingly demand a more personal, convenient, cheap and easy shopping experience.
Technically Speaking
Samsung and Ford are sinking funds in automotive innovation: according to a report from The Wall Street Journal, Samsung just created a $300 million fund to invest specifically in automotive technologies and innovation, while the Detroit Free Press reported that Ford donated $5 million to the American Center for Mobility, which tests driverless cars. This is significant but unsurprising, as carmakers push automated cars into production.
Speaking of investing, Salesforce will invest $50 million in startups employing artificial intelligence (AI) technology, according to Reuters. AI is becoming increasingly popular as a way to automate processes and free up human employees from mundane, repetitious tasks, so supply chain managers should expect AI investments to keep getting bigger as more companies implement the tech.
In other news, Hyundai Merchant Marine plans to reach full blockchain implementation by the end of 2017, according to JOC.com, which may not be quite that ambitious given the degree of blockchain innovation and business push to use it.
Breaking Ground
As the logistics business and auto manufacturing continue to swell, employers embark on hiring sprees — this isn’t the first, and it won’t be the last.
FedEx will add 425 new jobs to its recently opened 307,000 square foot facility in Sparrows Point, MD, according to WBALTV, while Volvo will add 1,900 to its Ridgeville, SC plant.
Amazon also announced Monday it will add 1,000 jobs to its Portland, OR fulfillment center, and confirmed its plan to break ground on a new distribution center in Monroe, OH.
FedEx also recently announced it will build a $32 million, 91,500 square foot facility near Milwaukee, WI, and UPS purchased 58 acres to expand a facility in Fresno, CA.
Mergers & Analysis
According to TechCrunch, DoorDash will acquire Rickshaw, a startup that will help the food delivery company improve its delivery logistics. Australian courier service Sendle will partner wtih DHL eCommerce to assist DHL with delivery processes worldwide.
Of course, Northrop Grumman provided the big news this week with the defense company’s announcement to acquire rocket-maker Orbital ATK, reported by The Wall Street Journal. Not to be outdone, Post Holdings announced it it will acquire Bob Evans for $1.5 billion, unsurprising to investors as Bob Evans has struggled to remain profitable despite dividing and selling several of its businesses earlier this year.
This week’s IPO offerings saw ERP software company AMERI Holdings file with the SEC to raise $10 million for its IPO, while Alibaba’s Best Logistics cut its U.S. IPO to 45 million shares priced at $10 to $11 each, from approximately 53 million shares priced at $13 to $15 each, according to Reuters. We still don’t know why Best cut its IPO, per the report.