According to Bloomberg News, anything that has gone wrong with the global supply chain has happened in the last two years. There has been a pandemic, dwindling, and unpredictable fluctuations in demand, conditions that have given rise to extreme weather events, shortfall of workers as well as cargo space, and to the extent of a huge container ship that got lodged in the Suez Canal.
As per Bloomberg News, there are a few growing companies that are trying to work out things on their own. These companies have decided that if they want something that must be done related to the supply chain, they got to do it all by themselves. Walmart Inc and Home Depot Inc are two of the retailers in the United States that have chartered container shops on their own so that the pace of delivery can be made faster and facilitated.
Specialty retailer American Eagle Outfitters Inc has acquired two logistic companies, namely AirTerra and Quiet Logistics Inc. so that inventory could be managed between stores as well as e-commerce fulfillment and thereby compete with the companies that are bigger and offer affordable same-day or next-day delivery.
Bloomberg News also reports that American Eagle anticipates that these logistic operations are revenue-generating businesses on their own.
Quiet has earlier offered its services to the retailer of fitness attire, Outdoor Voices, Birdies Shoes, and various other brands, as per information on its website. American Eagle has made a payment of $350 million for the business, the largest acquisition it has ever made, as shown by Bloomberg Data.
Sherwin-Williams Co announced in late September that it will acquire Specialty Polymers Inc, which is a coating ingredient company so that it can bring more of the supply chain in-house and minimize its dependence on manufacturers in the Gulf regions of North America, which is a hurricane-prone area.
Specialty Polymers that generated $112 million in revenue in the year 2020 comprises sales to Sherwin Williams, has production units in South Carolina and Oregon. As per the Chief Executive Officer of Sherwin Williams, John Morikis, this will be a vital step in the ability to serve customers well and do away with problems they face.
The Chocolate stalwart, Hershey Co announced recently, that it is buying Dot’s Pretzels, which is a fast-growing brand that has a good cult following, and also buying Pretzels Inc that manufactures products for Dot’s and many other snack companies at 3 different units or facilities in Kansas and Indiana.
The Chief Executive Officers are betting that vertical integration of manufacturing and distribution-related operations will offer an insight into potential pain points and offer greater flexibility to address the same. The crunch prevailing currently has managed to bring to the surface the vulnerabilities of global supply and demand chains and is also at the risk of depending on someone else, regardless of where they are situated to meet up with the customer demand. One prominent reason that led to the shortage in the semiconductor shortfall can be attributed to the chip purchasing decisions that were deep within the supply chain.
The end-vehicle manufacturers were not aware that there was not adequate supply that could support a production rebound until it was late.
