The founder and CEO of Starbucks was a head-liner at this week's Council of Supply Chain Management Professionals (CSCMP) annual conference.

Reflecting on Starbucks' near-death and strong recovery, DCVelocity reports that Howard Schultz told the crowd, "Growth and success covers up mistakes," At Starbucks this included a supply chain that was mostly unknown. It was an ignorance for which they paid dearly.  Only on the edge of failure did the company finally take its supply chain seriously. Schultz now credits supply chain management as the "primary co-author of our business. You cannot scale a company of any kind without the skills and base of a supply chain."

Schultz continued, "Given the fact that the Internet as we know it today is literally the death of distance, and that distance is getting narrower and narrower in terms of the last ten feet, …that is now being linked to delivery, specifically short-term delivery that could be in an hour or 30 minutes. With all these things going on, it won’t be status quo as we know it today."

In my own experience the biggest impediment to improving supply chain resilience is success. The greater the success, the less time, energy, or inclination remains for the self-critique and perspective that informs resilient choices.

The 2015 annual survey of Third Party Logistics (3pl) is now available.  The Wall Street Journal reports that the survey indicates, "A recent wave of logistics industry mergers and acquisitions is likely to accelerate in the coming year,..The survey found that many chief executive officers of third-party logistics operators, which arrange transportation and logistics services for retailers and manufacturers, expect to see defensive acquisitions growing in the wake of 10 major deals totaling $18 billion signed since early 2014."

Last Thursday (09/24/2015) Coca-Cola announced, "the formation of a new National Product Supply System (“NPSS”) in the United States. The mission of the NPSS will be to facilitate optimal operation of the U.S. product supply system for Coca-Cola bottlers in order to:

• Achieve the lowest optimal manufactured and delivered cost for all bottlers in the Coca-Cola system
• Enable system investment to build sustainable capability and competitive advantage
• Prioritize quality, service and innovation in order to successfully meet and exceed customer and consumer requirements."

If the action and its purpose still strike you as obscure, don't feel alone.  Bureacracies, public or private, tend to all sound alike.  Maybe that's why the stock price barely budged.

Here's how Reuters interprets the announcement:

The world's largest soda maker is facing sluggish sales volumes in the U.S.. It has been selling bottling operations, which partly entail getting its products to retailers, to franchisees to shift away from the capital intensive and low-margin business of distribution.

Until now, though, it has not sold production facilities, where its concentrate is combined with other ingredients and bottled up. The sale of the plants, which produce soft drinks like Coke, Sprite and Fanta, is expected to take place between 2016 and 2018, Coca-Cola said.

"By selling production facilities, we expect (Coke) will generate higher return on invested capital as its capital base is reduced, and have incremental cash to reinvest and return to shareholders," said Bonnie Herzog, an analyst at Wells Fargo, in a note

The Wall Street Journal included the following in its report on the deal:

Tom Haynes, an industry consultant and former Coke executive, said he expects the company will sign more deals to divest U.S. manufacturing plants. “Coke’s primary expertise is sales and marketing,’’ said Mr. Haynes, who headed the Coca-Cola Bottlers’ Association from 2002 to 2012.

What I see is another move toward functional disaggregation and strategic concentration.  Supply chains tended to be vertically integrated.  Supply networks tend to be horizontally collaborative.  Each participant in the network seeks to identify and amplify its particular comparative advantage and cooperate with the best-of-class in other areas of functional expertise.

In August the City of Moreno Valley (CA.) approved development of the World Logistics Center for a site on the eastern edge of the Inland Empire jurisdiction.  According to the city:

Generally, the project site is located east of Redlands Boulevard, south of the SR-60, west of Gilman Springs Road, and north of the San Jacinto Wildlife Area. The proposed World Logistics Center (WLC) project area is approximately 3,818 acres and includes a new 2,610 acre Specific Plan area. The project is envisioned to accommodate up to 40.6 million square feet of high cube industrial warehouse distribution development and related uses. (Map above)

In recent years one of the most significant economic engines for the region East of Los Angeles has been the proliferation of warehousing, product sorting, distribution and other supply chain functions. This new project is the largest yet,

There are several legal actions underway to challenge the project. But as far as I know, no one is questioning the seismic sustainability of the site or the resiliency of its construction. Below is another map showing the site's proximity to the San Andreas fault (the red line 18 miles east).  It is even closer to the San Jacinto Fault.

It is amazing how much we are investing in -- and depending on -- areas that we can be sure will be hit hard, even while giving minimal attention to mitigation.

MIT is hosting an October 15 Conference on transportation and the Internet-of-Things (IoT)

According to the widely-circulated invitation:

Our transportation system is not meeting the needs of our changing trade and diverse population. Capacity is shrinking just as our demand is growing. How will the Internet of Things address these increasing challenges? The transportation market has responded with new services and technologies, from IoT to telematics, and mobility to RFID and sensors for asset tracking. Trucks, ships, and trains are already loaded with technologies which continue to be enhanced to improve on time, safety, and cost metrics.

More information and an opportunity to register HERE.

Home Depot has opened its third facility committed entirely to filling online orders.  According to the Toledo Blade:

The first was placed in Georgia near corporate headquarters and the second in California to service the west coast. But the third facility is the largest yet, at 1.6 million square feet.

Northwest Ohio was a perfect fit for what Home Depot was looking for.

"Geographically, this gives us reach to all of our customers zip codes, about 90 percent of the U.S. population within two shipping days." said Scott Spata, Vice President of Home Depot Direct Fulfillment.

This facility is where online orders are sorted and shipped directly to the customers.

While Home Depot stores hold 35,000 items, Online direct services offer one million products to chose from.

According to the Wall Street Journal:

At its hub in Louisville, Ky., United Parcel Service Inc. recently rolled out 100 industrial-grade 3-D printers to make everything from iPhone gizmos to airplane parts.

UPS wants to find out if 3-D printing centers could shorten supply chains and cut into its $58 billion-a-year transportation business—or give it a leg up in a potentially emerging market for local production and delivery.

For Atlanta-based UPS, the difference could be existential. It doesn’t want 3-D printing to disrupt its business the way the Internet pulled the rug out from overnight document deliveries more than a decade ago. MORE.

Over the weekend I was talking to a leading transportation specialist who, while drinking at the time, soberly said, "Transportation policy in this nation does not currently exist. There are putative policy notions. There is no extant policy, sustainable funding, or credible vision for policy or funding."

According to The Hill:

Even as they maintain that they want to strike a major deal in the next few months, House Republicans still face a number of obstacles in reaching an agreement with a skeptical Senate before the end of 2015.

Lawmakers currently have an Oct. 29 deadline for extending highway programs, and had been under the impression that the Highway Trust Fund could easily be replenished through mid-December.

If the House is unable to make progress on both its international tax plan and highway policy in the coming months, the chamber could be forced to accept a Senate highway bill passed this summer that House leaders have repeatedly said is riddled with deficiencies. The Senate bill authorizes six years worth of highway policy, but only includes funding for three years.

Already, the House Transportation Committee has had to put off its plans to consider a six-year highway bill, and have not announced a timeline for when it will take up a measure — raising the chances that the House will be unable to pass its own long-term bill and then hash out a compromise with the Senate by the October deadline.

Last month Politico published a special edition on transportation (that I just noticed).  See The Agenda: Transportation.

This weekend I am trying to get through some accumulated reading, including an August White Paper entitled "Food Industry Logistics: Trends that Matter".  A couple of quotes:

THEN: Logistics networks have been designed with mindsets relevant to a prior era. Production and distribution efficiencies commonly drive product and placement. The infrastructure and apparatus are built around a high proportion of (and preference for) heavily processed foods with extended shelf life. Large manufacturing plants and distribution centers are prevalent, and efficiencies have been built around bulk shipments, which have often driven product assortment decisions. Lastly, outbound distribution models have been designed by large players to maximize their bottom line relying on fairly predictable demand rather than to respond optimally to consumer on-the-go needs.

NOW: Growing consumer expectations for freshness require shorter farm-to-fork times and distances. There has been major growth in small-footprint urban retail locations, as well as substantial growth in home delivery from online channels (e.g., Blue Apron). “Uber-type” on-demand deliveries in a one- to four-hour timeframe have also come to market... There is growth in nontraditional retail and foodservice channels (e.g., limited-assortment and fresh-format stores, specialized chains). Convenience retailers are actively working to deliver a broader, fresher and better variety of prepared foods to customers. Emerging channels like food trucks and farmers markets with unique offerings are also developing; many are harnessing the power of social media to reach consumers.

IMPLICATIONS: This will radically impact food industry logistics.... The increasing need to be closer to customers necessitates additional brick-and-mortar facilities (e.g., distribution centers, cross docks). To speed up cycle time even further, robots, automation and advanced technologies will be required.

I agree this is happening.  I agree it could be important in a whole host of ways including enhanced network resilience.  The proportional impact of these trends is not yet clear to me.

The September issue of Supermarket News compares mobile options in the Big Apple.  It can be a bit confusing.  Not exactly apples and oranges.  More like comparing priced-by-the-ounce or by the quart or bushel.

Above is one 2014 effort to map Amazon fulfillment centers

According to the Wall Street Journal:

A Cuisinart warehoused in California may no longer qualify for two-day shipping to a Prime member in Vermont. That’s the idea behind a new program Amazon is testing with some independent merchants.

The program, nicknamed Ship by Region, lets certain sellers designate where they’re willing to ship goods in two days or less to Prime members.

The merchants may limit how far they will ship some items – large-screen televisions, for example – with the two-day guarantee under Prime. If a Prime customer is outside that region, shipping may take longer.

Physics is still a factor. Time can be compressed. Space can be bent. But the energy required is better spent on dense, proximate concentrations.

Did you see, by the way, the Amazon patent application for their particular use of public transit for deliveries? Here it is.