In the QAD Precision News Round-Up: 7 January 2022, supply chain
pressures may be peaking; IKEA to raise prices; Walmart to hire
3,000 workers; electric vehicle sales high in the UK; UPS holiday
returns break records; plus preparing for the 2022 supply chain and more.
The New York Federal Reserve unveiled a new index, the Global Supply
Chain Pressure Index (GSCPI). It uses 27 variables to show global
supply chain pressures beginning in 1997. The index shows that supply
chain disruptions including the slow flow of goods and inflation may
be peaking. Furthermore, the GSCPI shows current supply chain
pressures at 4.5 standard deviations above normal. Although this is a
high level, analysts advise that pressures may be peaking and will
moderate going forward.
The index’s 27 variables include: cross-border transportation costs
and country-level manufacturing data from the Purchasing Managers’
Index surveys. For more details, please click here.
The Society of Motor Manufacturers and Traders (SMMT) reported
carmakers sold 190,000 battery electric cars in the UK last year,
accounting for approximately 11.6 percent of total sales. This is an
increase compared to 2020, when consumers bought 108,000
battery-powered cars, making up 6.6 percent of new cars purchased in
the UK. In addition, in December 2021, electric cars accounted for 26
percent of total sales representing a record for a single month.
According to the SMMT, consumers purchased more electric cars in the
UK in 2021 than in the previous five years combined.
Amid disruption to global supply chains and chip shortages, overall
car sales in the UK increased 1 percent from 2020 to 1.65 million.
However, sales remained almost a third below sales in 2019. For more
details, please see The
According to a UPS spokesperson, the peak holiday shipping season is
still in effect due to the record-breaking number of holiday returns
the company is handling. UPS expects to handle over 60 million return
packages this peak season which represents an increase of 10 percent
compared to holiday returns in 2020.
UPS has released data points focused on holiday returns. According to
the company, one in four Americans expect to make a return during peak
season, while one in five Americans made a return before Christmas.
Furthermore, over 35 percent of respondents said they would pay more
for a return if the process was more sustainable and 84 percent
expected retailers to provide a cost-free return option. For more
information, please see Logistics
Walmart will hire an additional 3,000 drivers in 2022 for its InHome
Delivery service. The new positions are full time and drivers will
receive $1.50 more per hour than most store employees providing
advancement opportunities to current Walmart employees. InHome
Delivery’s current territory covers more than six million potential
customers with plans to expand to 30 million potential customers by
the end of this year.
InHome Delivery delivers groceries and essential items to customers'
garages, front doors, kitchens and even straight into the
refrigerator. InHome Delivery is $148 annually or $19.95 a month.
Walmart is using InHome Delivery to further expand its last-mile
delivery offerings. For more information, please click here.
IKEA, the world’s largest furniture retailer, is raising its prices
in 2022. The price increase is an average of 9 percent across all
categories. The price increase is as a result of increasing
transportation costs as well as rising raw material costs.
IKEA previously had absorbed the additional costs from leasing
additional ships and containers, as well as rerouting goods to avoid
shortages. Despite these measures, the furniture giant now needs to
pass the additional costs onto its customers as supply chain issues
continue. IKEA’s price increase reflects the current inflation and
supply chain disruptions many retailers are currently facing. For more
information, please visit CNBC.
On Wednesday, Walmart and FedEx announced plans to add thousands of
electric delivery vans produced by General Motors to their fleets.
Walmart has signed a new deal with the automaker for 5,000 BrightDrop
vans. In addition, FedEx, BrightDrops first customer, is adding more
vans to an initial order of 500 vehicles that GM began delivering last
month. FedEx said it has signed an agreement for a further 2,000
vehicles over the next few years. Furthermore, this could potentially
increase to an additional 20,000 vehicles. For more information,
please see CNBC.
With homes being transformed into makeshift offices, gyms, and
screen-reliant classrooms, and businesses adapting to growing demand
and changing regulations, it is no surprise that COVID-19 completely
changed how the world operates. In 2021, we witnessed a dramatic
shortage in shipping containers, chips required for electronics
production, truck drivers and general laborers, and more. All of which
caused severe bottlenecks in the supply chain.
The common denominator of these disruptions is the fractured supply
chain. Demand is exceeding supply while inflation skyrockets. No
industry has been immune to the impacts of the exhaustive disruptions,
and band-aid solutions simply aren’t enough.
All is not lost, however. As we look to the year ahead, there are
many ways companies can prepare to navigate unpredictable supply chain
logistics. In this QAD Precision Report, we look at what’s to come for
global trade and transportation and how to prepare for the unknown in
2022 and beyond. Read the full report here.
The COVID-19 pandemic is forcing companies to become more agile,
reassessing every element of their existing supply chains in
preparation for the “new/next normal”. In addition to these pressures,
“Industry 4.0” — the next industrial revolution — is the result of the
substantial transformation that is occurring through the digitization
In this article, QAD Precision’s Jerry Peck discusses supply chain
disruption caused by both the pandemic and technology-driven
innovation. He argues that companies will be forced to change business
models at unprecedented rates of speed in order to survive and thrive
in the “new/next normal.” For more details, please see Global