Above The Fold: Supply Chain Logistics News (June 2, 2023)

It’s going to be 90 degrees fahrenheit today.

Why would I choose to cycle 60 miles (almost 4 hours) in this heat?

Because my daughter doesn’t have a choice when it comes to dealing with the daily challenges of living with type 1 diabetes (T1D). 

It’s been more than 11 years since she was diagnosed at age 11. I made a promise that as long as I am able, there is no distance I won’t go to help find a cure for T1D.

It’s why I launched our Logistics Leaders for T1D Cure cycling team in 2016, and why I’ll be cycling 100 miles at the JDRF Ride in Burlington, VT at the end of July.

Due to work travel, I’m behind on my training, which is why I’m going out today. I’m also very behind on reaching my fundraising goal. 

How can you help? Please consider making a tax-deductible donation to help the cause. You can do so via my rider page: http://www2.jdrf.org/goto/AdrianLL4T1DCure

If you’re a supply chain technology company or a logistics service provider, please consider sponsoring our team (a big thank you to TranzAct Technologies for sponsoring us again this year). We have a variety of sponsorship packages still available, which include many benefits, so if you’re interested in learning more, please contact me for details.

Thank you for listening.

Moving on, here’s the supply chain and logistics news that caught my attention this week:

IKEA: I Liked It So Much I Bought the Company 

Do you remember the 1979 commercial with Victor Kiam saying he liked the Remington electric shaver his wife bought him so much that he bought the company? If not, here it is:

This commercial came to mind when I saw the news that Ingka Investments, the investment arm of Ingka Group, owner and operator of 482 IKEA stores and e-commerce in 31 counties, acquired Made4net, “a global provider of cloud-based Warehouse Management System (WMS) & end-to-end supply chain execution software.” Here are some excerpts from the press release:

The Made4net omnichannel fulfillment solution will be deployed across IKEA stores and fulfillment points to modernize and future proof omnichannel operations…As a customer, IKEA will apply Made4net technology to significantly enhance how the retailer interacts with its consumers in a new era of omnichannel commerce, providing a more flexible way to shop, order and deliver products in a sustainable way. Made4net’s SCExpert™ platform will in the long term power IKEA’s worldwide fulfillment centers and store operations across 482 locations in more than 31 countries, with over 100,000 users to deliver faster, more accurate order fulfillment and improved supply chain visibility, resulting in a better experience for employees and customers. 

“Our business currently requires a better fulfillment operations system with more accurate data that better supports handling for our customers,” said Tolga Öncu, Head of Retail, Ingka Group. “Our goal is to become leaders of life at home, serving more people in an omnichannel reality, whenever and however customers choose to meet us.”

Last September, I wrote about the relatively recent trend of retailers acquiring 3PLs and/or offering logistics services. Now you have this example of a retailer buying a supply chain execution software company. What’s going on here?

I believe it’s part of the same trend I first wrote about in a March 2014 post titled, “Keeping Control: What 3PLs Must Convince Their Customers.” Simply put, a growing number of large retailers (and manufacturers) are starting to view logistics as a core strategic function, and so they are investing in assets, people, and technology to gain more direct control of their operations.

You can’t get any more direct control than buying the company.

What does this mean for Made4net’s existing customers? According to the press release, the company “will continue to operate as an independent subsidiary from its headquarters in New Jersey, U.S., and its six global offices where the company supports hundreds of global customers.” 

In the best case scenario, the investment by Ingka Group will help accelerate solution innovation in the months and years to come which will benefit all customers. In the worst case (and less likely) scenario, IKEA will pull an Amazon when it acquired Kiva years ago and eventually stop selling Made4net solutions to other companies.

Nothing surprises me any more in this industry.

And with that, have a happy weekend!

Song of the Week: “Wagging Tongue” by Depeche Mode

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