Weekly edition | Dec. 7, 2021 By Edwin Lopez Oatly, Under Armour, Allbirds and Nordstrom detail how they're adjusting to supply chain disruptions. (Was this email forwarded to you? Sign up here.) | When bison see a storm coming, they don't often run away. It was that same approach that led Colin Browne, Under Armour's COO, to give the company's team tasked with responding to supply chain crises a codename: Project Buffalo. In an interview with Retail Dive, Browne talked about the shifting challenges the team has faced since it was first launched in February 2020. It's not a small list, and "this is the time where supply chain comes to the fore," Browne said. Read the full story. | Stat of the Week The company is betting it can mitigate supply chain disruptions with the higher inventory levels shown in the chart below. CEO Erik Nordstrom said the company's Rack subsidiary is using a pack and hold tactic — in which companies buy products when available and then hold them until the inventory is relevant — to bolster its inventory. Get the details. Credit: Max Garland / Supply Chain Dive / data from Nordstrom quarterly reports | We'll give a hint: it has something to do with money. "Given the macro supply chain and logistics environment, we felt it was prudent to take advantage of our strong balance sheet and increase our inventory positions," said CFO Mike Bufano. Of course, there were other factors at play. Bufano mentioned the company relied on planning, secondary sourcing, and regional diversification, as well. Read more. | As demand grows, it pays to invest in more capacity. And for Oatly, that means more production. The plant-based milk company is on a roll when it comes to opening new facilities. In 2021, the company opened facilities in Utah, Singapore and China. And it recently announced plans for new plants in the U.S., U.K. and China by 2023. It's an "unprecedented pace" of growth for the company, according to CEO Toni Petersson. Dig into the strategy. | Quick Hits Supply Chain Dive Supply Chain Dive The Wall Street Journal CNBC McKinsey&Company Parting thought Getting inventory early and keeping it at a warehouse until it is relevant comes with its own challenges. At the end of the day, facilities need space.
If Nordstrom is not alone in the pack and hold strategy — and our reporting suggests they are not — I have to wonder: Where is all that extra inventory being kept? And at what cost?
As always, if you have ideas, I'd love to hear them via email.
Edwin Lopez Senior Editor, Supply Chain Dive Twitter | Email | | |
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