Supply Chain Weekly Wrap-Up 01/06/2023-01/12/2023

Supply Chain Weekly Wrap-Up 01/06/2023-01/12/2023

Time Stamp: January 13, 2023 9:15 AM
Source Node: 1894165

In 2022 Walmart made over 6,000 drone deliveries

Walmart announced they completed more than 6,000 drone deliveries in 2022. Due to their rapid supply chain diversification 2022 saw Walmart equip 36 U.S. stores with the drone delivery hub. Of which are located in 7 states: Arizona, Arkansas, Florida, North Carolina, Utah, Virginia and the state with the drone delivery hubs, Texas.

The delivery and drones are operated by several business, DroneUp, Flytrex and Zipline. The aim for drone delivery is to offset the need to use petrol powered delivery vehicles to cover short distance deliveries. This is a way to reduce Walmart’s carbon footprint in a sustainable way. There are also other benefits as drone delivery offers the speed necessary to deliver temperature-sensitive items such as ice cream and other frozen product.

On average it takes 30 minutes or less for a drone to deliver after an order is placed, which is speed not capable with traditional delivery. The goal for Walmart is to have the capacity to deliver 1 million packages by drone annually, however far that goal seems now, they are currently on there way.

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Volkswagen Group sales is the lowest in over a decade

The Volkswagen Group recorded its lowest sales in over a decade in 2022, with COVID-19 lockdowns in China and the war in Ukraine effecting supply chains. Forecasts shows a fourth-quarter recovery, might not offset challenges for 2023. The Volkswagen Group said on Thursday it delivered 8.3 million vehicles to customers last year. That indicates it will remain in second place globally behind Toyota.

A reason for this could be China’s recent COVID restrictions that has seen many other business’s supply chain slow down, like Apple and their recent issues with their supplier Foxconn. However, these restrictions have affected Volkswagen in a different way. China is their largest market for car sales, recorded to be 2.2 million for 2022. This is down from 4.21 million in 2018 the pandemic would be the reason for this fall, as the demand in China took a drastic hit.

Nevertheless, the recent resurgence of the virus and China’s response as played a role in this being the Volkswagen Group lowest sales in over a decade. On the other hand, sales rose 14.3% in the fourth quarter to close out the year, but the outlook for 2023 remains clouded by weak economies and supply chain shortages

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Rivian EV production falls amid supply chain issues

American Electric vehicle (EVs) maker Rivian failed its manufacturing target for 2022, producing less than their annual goal of 25,000 EVs, as supply chain challenges weighed on the company. Rivian has been a key partner for Amazon since 2019, as they produce the electric delivery vehicles which saw large roll out at the end of 2022 by Amazon, this is a story we covered on a previous Weekly Wrap-Up.

The custom-made vehicles for Amazon were not affected by this stall in production, as the company was off by 700 units for their 25,000 EVs goal. Rivian CEO RJ Scaringe referred to ‘the global supply chain crisis for the missed targets’.  The crisis Scarinage stated would be the effects of the global pandemic on their supply chain, especially the microchips needed for the software to run the EVs, which are mainly manufactured in Taiwan. Taiwan is still feeling the effects of the pandemic with visitors needing to be vaccinated and tested before entering the country.

In an email to employees, it’s believed Rivian closed its factory in Normal Illinois, for 20 days in 2022 due to supply chain issues. This forced closure created a backlog of preorders which Rivian could not keep up, with leading to the company failing to reach its 2022 target.

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