Geekwire is reporting:

Amazon filed suit Monday against a 16-year veteran of the company, Arthur Valdez, alleging that his new job as a high-ranking supply chain and logistics executive at Target Corp. violates the terms of the non-competition agreement that he signed as part of his Amazon employment. 

The suit, filed a week before Valdez is scheduled to start his new job, alleges that he “cannot lead Target’s supply chain operations without referencing confidential information learned and developed by him at Amazon to drive superior performance in exactly the same areas.”

Amazon claims that Valdez has already started spilling the beans to Target executives, in the process of interviewing with the rival retail company.

Amazon is asking the court to enforce a provision of the non-compete agreement requiring an 18-month “time out” before employees such as Valdez can work in comparable positions for competing companies. These non-compete clauses have long been a standard part of Amazon employment agreements. Valdez first signed his agreement in 1999, when he joined Amazon, the company says in its complaint.

Here's a copy of the Amazon complaint filed in King County, Washington Court.

Fred Smith, founder and CEO of Federal Express, knows about -- even personifies -- disruptive innovation. So his comments during a March 16 call with financial analysts received considerable attention.  According to the Memphis Daily News:

Smith said the industry disruption discussed since Amazon announced plans to lease 20 Boeing 767 planes from Air Transport Services Group has been “fueled by fantastical articles … and reports which are devoid of in-depth knowledge of logistics systems and the markets FedEx serves,” Smith said, emphasizing that he specifically chose the term “fantastical.” Smith also said he doesn’t see the big three of e-commerce shipping – FedEx, UPS and the U.S. Postal Service – changing. “It is highly likely these entities will remain primary carriers for e-commerce shipments in the U.S. for the foreseeable future,” Smith added.

(Fantastical or not, here's a recent report on Amazon's expanding in-house operations.)

Smith actually never uttered the word Amazon.  But his meaning was clear enough.  It was also clear that Fedex was signaling whoever would listen that its own strategy is not keen on loss-leading behavior.

In an interview with the Wall Street Journal related to Wednesday's quarterly results, Smith said: "There’s an enormous interest in people having things delivered to themselves. It does not change, one iota, the input costs of the delivery."

One way that FedEx intends to boost its e-commerce returns is by increasing fees attached to the growing number of large shipments such as kayaks and other items that don’t fit into its ground network. 

Mr. Smith blamed some of the trend in low-cost e-commerce expectations on the U.S. Postal Service, which it and other delivery companies, including UPS and Amazon, use to deliver packages the most expensive leg of the trip—to resident’s doors. 

“The postal service’s rates, which are the primary driver of e-commerce…they’re going to have to go up as mail service goes down,” Mr. Smith said.

According to several reports Amazon does not constitute more than three percent of revenue for Federal Express.

Inditex SA -- owner of Zara and the world's largest clothing retailer -- has once again posted impressive gains.  It has also announced plans to slow new store launches and focus more on online.

According to the company:

Inditex Group's net sales increased by 15.4% in FY15 (1 February 2015 - 31 January 2016) to €20.90 billion, underpinned by growth in all of the Group's geographic regions. Sales growth in local currencies reached 15%. Net profit was €2.88 billion, up 15% from FY14. Meanwhile EBITDA registered growth of 15% to €4.70 billion. Like-for-like sales growth was 8.5%, on top of 5% growth in FY14, with positive growth in all geographies and across all the formats.

Despite the continuing recession in much of Europe, the slowdown (or worse) in China and other BRIC-like economies, and uneven growth in the United States.

According to Bloomberg:

Since Inditex’s 2001 initial public offering, the retailer has boosted its sales more than sixfold through aggressive expansion of its eight chains. Two-thirds of its 7,000 stores have been opened or revamped in the last three years.

But the company is applying the brakes to more bricks-and-mortar.  Several new stores -- including massive brand-focusing flagship stores -- will continue to open. Others will open for the first time in selected emerging markets.  But the company perceives it has sufficient physical presence in existing markets to support strong online growth. Zara promotes both in-store pick-up and return on its products purchased online.

Zara does not usually report online sales separate from other retail. But on March 9 the company reported, "The Group will complete its online presence in all the European Union markets in April when its online sales platform goes live in Slovenia, Malta and the Baltic States. Meanwhile, the Group is planning to launch in five new markets with physical stores in 2016 (New Zealand, Vietnam, Nicaragua, Paraguay and Aruba)."  This means that across several brands, the company now has customized online platforms operating in 29 national markets.

Inditex is famous for its well-integrated and agile supply chain.  The company was a relative late-comer to online, but the "fast-fashion" functionality of its supply chain is especially well-suited to online consumer preferences.

According to its most recent quarterly report, Inditex has steadily rolled out radio frequency identification technology (RFID) to improve stock management across its store base. At year-end FY2015, this technology was up and running in 1,542 stores in 64 markets and had been fully implemented in 48 of these countries. By the end of 2016, the Group plans to have installed this technology throughout Zara's more than 2,000 stores.

ProPublica looks at the impact on chemical and energy supply chains in case a major hurricane pulverizes the Houston area. One quick excerpt: "Beyond the pain a scenario like Mighty Ike would inflict locally, a storm that cripples the region could also deeply damage the U.S. economy and even national security. The 10 refineries that line the Ship Channel produce about 27 percent of the nation’s gasoline and about 60 percent of its aviation fuel."

Fortune magazine focuses on the optimization -- or sometimes rationalization -- strategy being adopted by Target and others:

The discount retailer, the third largest U.S. store chain, is deploying workers to pore through the many categories of products its sells to see how many different formats and pack sizes of products like bottled water or soap it really needs to stock in its stores. 

For Target Chief Executive Brian Cornell, it’s a matter of being more efficient in what are staples for the retailer so it can focus more on categories it has made a priority, like wellness, stylish home goods, apparel, and baby products... 

The store will start by removing some items at one location, and then roll out to other stores in its 1,800-store fleet if it doesn’t face customer feedback. “We are not taking a blunt instrument approach to this,” Cornell said. 

The efforts mirror those of Walmart WMT 1.65% which has also grappled with out-of-stocks and wants to reduce the expense and time of having workers constantly restock shelves. By October, Walmart had eliminated about 15% of its assortment by doing things like offering a ranch dressing in one size rather than six, the Wall Street Journalreported at the time. 

Many consumer and packaged goods companies seem to have been expecting this development. Former Procter & Gamble CEO A.G. Lafley told fellow industry leaders last June that consumers are put off by too much choice.

Target is giving significant attention to supply chain strategy, operational fixes and optimization. Their March 2 Financial Analyst Community Meeting was replete with a variety of presentations.

I heard a management team being honest with itself and with the financial community... a bit less common than might be hoped.

What they discussed-aloud is similar to the issues a wide variety of retailers are facing.

Here are some excerpts:

We expect to invest $2 billion to $2.5 billion in capital expenditures per year, focused on technology, supply chain investments to modernize our operations and to support flexible fulfillment... 

Over time, we've been adding stress and complexity to systems that frankly were built for another time to keep pace with our changing guests, to consistently deliver what our guests expect and position Target for the future, we must zero in on critical pieces -- supply chain, stores, technology -- and put our guests at the center of all of it. 

For 50 years, we were working off a pretty linear system. It started by moving product from our vendor partners into distribution centers and then out to our stores. The whole system moved from the left-hand side of the page to the right. Today, the world couldn't be more different. Today, guests can still shop our stores to get the products they need and even pick up a few they didn't know they wanted. But they can also shop online and have the order delivered to their home...

We continue to send product to stores to support an in-store shopping experience. But we are also shipping directly to guests from stores, DCs, even vendors and we are sending products to stores for online order pickup. In fact, the number of Target.com orders our guests chose to pick upin stores grew by 60% in the past year, almost double our full-year digital sales growth. And sure, overall digital demand is growing, but this also reflects our guests' increasing desire for the convenience of picking up their orders in store, usually within the hour. 

All these changes are in the name of making sure we can deliver the products our guests want fast. In our stores, they are more important than ever. They've become showrooms, fulfillment centers and pick-up locations. And the people inside them are there to help. 

Sounds great, right? But here's the rub. We can't continue to add this kind of complexity without ensuring the foundation can support it. Earlier, you heard a little bit about our guest immersion experiences and I can tell you from my own guest conversations that Brian's summary was right on. Hearing from guests was both uplifting and humbling to realize how much they love us and how much work we still have to do to deliver the experience they expect... 

So in the past year, we've put a lot of thought into tackling these challenges and we found it doesn't necessarily require investing in new, but often entails using what we have, like systems and talent, more effectively to deliver a better experience to our guests. To reduce back-room inventory, we are redesigning shelf presentations to put even more product on the sales floor and surgically reducing the number of SKUs in particular categories. We are also optimizing case pack sizes to get down on the number of times our teams are touching a product.  

Imagine for a minute that a store receives 24 jars of peanut butter in a case, but the shelf only holds 18. So instead of being able to pull a case pack directly from a delivery truck to the sales floor, teams have to break open the package and store the extra six jars in the back room. And as soon as we sold through the shelf, they have to make an extra trip to the back to replenish. You don't need an advanced degree to see the math on that scenario is not good. Three times the touches and a huge drain on payroll productivity. So we are working with vendors to send case-pack sizes that match each product's rate of sale and allotted shelf space... 

When you talk to our guests, the number one pain point is that we are out of stock and when it's for an item we've promoted, it's a double whammy in disappointment. We've offered a great deal, they came to the store and when they got there, they couldn't buy what we said we would sell them. 

So we established an action team last summer that has been digging category by category into the root causes of persistent out-of-stock challenges and the results have been very positive. We finished 2015 with out-of-stocks 40% lower than the year before. And for a set of focus items we've designated in essentials, our out-of-stocks are better than we have ever measured. 

On top of that, those results came from process changes that are simple, repeatable and sustainable. So in many cases, we can apply the same fixes across the business. What we've done to reduce out-of-stocks in paper towels, for instance, is working for us in diapers, given they are both high frequency, large pack size products. The solutions we've started to put in place are helping to address some of the fundamental issues, but we've uncovered other parts of our operations that need more fundamental change. 

It was clear we needed a dedicated team that could focus on transforming our supply chain to lay the foundation for tomorrow without the burden of the all-consuming responsibility of running day-to-day operations. As a result, we carved out a small team last fall comprised of functional experts from across the organization and we asked Karl Bracken to head up this effort. He had led several parts of our supply chain and merchandising functions and set up our flexible fulfillment capabilities. 

After identifying a long list of work we could tackle, the team narrowed on a focused set of priorities that would have the biggest impact. For example, work is already underway to solve for the variability of when our products arrive in our distribution center. Some products arrive late, some products arrive early and in general, the windows we specify for our vendors are far too wide. That inconsistency upstream makes it harder to keep our stores in stock or provide tight shipping windows downstream.

There's much more, most of it applicable to any consumer-facing supply chain.

In a new report on supply chain risk and resilience sponsored by DHL, the authors conclude:

Increased supply chain risks have been the major unintended consequence of two of the most significant business trends of recent decades: globalization and lean production. Driven by the quest for lower manufacturing costs or access to specialist capabilities, the increasing willingness of companies to source materials and components from around the world has greatly increased the potential points of supply chain weakness, especially as some key production sites are now located in regions more vulnerable to natural disasters.  

And supply chains have also increased their vulnerability. Short product life cycles and the desire to conserve working capital encourages companies to keep inventories and buffer stocks as low as possible. It’s an approach central to the Japanese philosophy of “just-intime.” When supply chains are running smoothly, this way of working has proved incredibly successful: cutting manufacturing costs, improving companies’ ability to respond to market shifts, and simplifying quality control. But when problems do occur, there is far less slack available, leaving companies with less time to react before the impact of problems reaches their customers. 

Target has hired an Amazon alumnus to reform its supply chain.  According to the Wall Street Journal:

Target is racing to modernize its supply chain operations to handle all these jobs as it addresses problems that cropped up during the transition. In recent quarters, Target has struggled with inventory shortfalls as it tried to cater to online and in-store shoppers at the same time... 

To help address the new challenges, Target on Monday hired retail supply chain veteranArthur Valdez as its chief supply chain and logistics officer. Mr. Valdez, who spent 16 years at Seattle-based Amazon.com Inc., will join the retailer March 28. He is the most senior hire that Target has made from the online retailer, which formerly ran Target’s Web operations for a decade until 2011. 

He joins Target amid top-down reviews of its supply chain and a separate project designed to transform grocery operations, where there are even more problems to fix. The future look of its supply chain is expected to be one of the areas Target executives will discuss on Wednesday during an annual meeting with Wall Street analysts.