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Home>Today's Top Supply Chain and Logistics News From WSJ

Today's Top Supply Chain and Logistics News From WSJ

Today's Top Supply Chain and Logistics News From WSJ

09/25/2017

 By Paul Page 

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German discount grocer Aldi is taking lean inventory to a new level in its bid for a bigger share of the U.S. market. The company is betting it can win over Americans spoiled by the wide variety in supermarkets by offering way fewer choices than rival retailers. It's an austere proposition at the heart of Aldi's growing business in Europe, the WSJ's Zeke Turner reports, with stocking that puts the company's lean blueprint on stark display on store shelves and offers consumers in exchange deep price cuts at the end of long checkout lines. The strategy underpins a $3.4 billion investment Aldi is making to bring 2,500 stores to the U.S. by 2022, which would make it America's third-biggest grocery retailer by locations. It comes amid a dramatic change underway in the U.S. market that promises to remake distribution channels for food and other consumer goods. At Aldi, that will mean far less variety and stocks that are as lean as its suppliers and its customers can tolerate.

A U.S. government panel's decision on solar-panel imports provides new power to the Trump administration's pledges to protect American companies from foreign competition. The International Trade Commission support is aimed at a case filed by Georgia-based solar-panel maker Suniva Inc., which has argued that cheap imports from abroad are undermining pricing and their business in the market. The WSJ's Jacob M. Schlesinger Andrew Tangel and Erin Ailworth write the impact goes beyond the energy sector since it's likely to encourage more industries to seek protection under a trade law last invoked in 2002. It may also give administration officials new confidence in plans to revive a wide range of little-used protection powers to back President Donald Trump's "America First" agenda. Still in the wings: an investigation of whether China's aggressive acquisition of U.S. intellectual property constitutes unfair trade practice, and whether the administration can block steel and aluminum imports on national security grounds.

Some of Europe's manufacturing forces are looking at uniting to stave off aggressive competition from China. German industrial giant Siemens AG and French train-maker Alstom SA are in talks to build a European rail transportation powerhouse, the WSJ's Robert Wall and Ben Dummett report, a combination that would create a European transportation business managed through Siemens with about $18 billion in annual sales. Western train makers are under pressure to gain scale since the 2015 merger of China's CSR Corp. and China CNR helped that operation win business by cutting costs. The Siemens-Alstom talks come as Western manufacturers in the transportation arena and other industries are considering how to respond to the growing heft of China's industrial behemoths, and the transport carries extra weight because of their impact on factory jobs. Siemens has also talked with Canada's Bombardier Inc. about joining their train-making business, suggesting that any consolidation will take on an international scope.

MANUFACTURING

Rolls-Royce Holdings PLC is starting to use virtual reality in its manufacturing supply chain. The British aircraft engine maker is using the immersive technology headsets for what it calls the "world's most powerful aerospace gearbox," the WSJ's Sara Castellanos writes, highlighting the growing interest in virtual reality in industrial operations from factories to warehouses. Rolls-Royce, which makes engines for Boeing Co. and Airbus SE, is using the devices for its new UltraFan jet engine, which has a highly complex gearbox that helps different parts of the engine move at different speeds to operate more efficiently. The HTC Corp.-made headset allows engineers to first assemble the gearbox parts in a virtual environment and figure out the optimum movements before assembling the devices in real life. Companies have approached virtual reality cautiously, but the Rolls-Royce operation may get a closer look in complicated and manually intensive operations from factories to distribution centers.

Amazon.com Inc.'s relentless ascent in the corporate world has been astonishing, but is there more to the Amazon story than a reach for market share? In a commentary, Scott Galloway of the NYU Stern School of Business writes that Amazon's growth raises difficult questions about the reasons for its dominance and the company's impact beyond its basic gains in the retail, cloud services and entertainment markets. Amazon has changed the basic compact with financial markets, the marketing professor writes. It has replaced the expectation for profits with a focus on vision and growth, managing its business to break even while investors bid up its stock price. That's provided the company with what Mr. Galloway writes is a staggering advantage in free-flowing capital. Amazon Is investing some of that capital in delivery networks meant to bring goods to consumers' doorsteps.

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