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Gaining From Supply Chain Resilience; IKEA's Circular Furniture Strategy By Paul Page

Supply chains that underpin the economy are facing continuing stress coming from numerous directions. Some companies say that's actually helping them gain a competitive edge in their markets as they put in place tools aimed at managing risks.

The WSJ's Richard Vanderford reports that a new generation of strategies and technologies to manage risk is growing as the strains in supply chains persist even as the upheaval during the Covid-19 pandemic era starts to fade. Geopolitical tension, labor disruption and natural disasters are among the stresses that have buffeted supply chains this year.

Industry executives say the responses now mark a departure from the pandemic strategies, when issues such as dwindling inventories sent many companies scrambling to plug gaps simply to remain in business. Now, companies are enacting longer-term strategies to keep operations moving. Mirko Woitzik of risk management firm Everstream Analytics says that's helping some companies get a competitive advantage.

One survey shows that businesses that have invested in supply chain resilience saw revenue grow sharply faster than other companies. But the push for resilience and risk management raises tough questions at businesses. Any response to shore up a supply chain, whether technology or new sourcing strategies, can be costly and challenging to implement.

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Learn More Quotable Sustainability

IKEA is looking hard at its upstream and downstream supply chains as the furniture maker presses its sustainability efforts. The world's biggest furniture retailer is testing a marketplace for customers to sell secondhand furniture to each other, even as the company works closely with its sprawling network of suppliers around the world to reduce their carbon footprints. Chief Sustainability Officer Karen Pflug tells the WSJ's Perry Cleveland-Peck that the marketplace called IKEA Preowned, which is being tested in Madrid and Oslo, is part of an effort to build a more circular supply chain both in manufacturing and in consumer sales. The efforts aimed at maintenance and repair have pushed more than 23 million spare parts into IKEA's enormous distribution network. IKEA is also working with its suppliers to reduce their emissions in what she characterizes as collaborative efforts. Says Pflug, "We prefer the carrot to the stick."

Number of the Day In Other News

U.S. imports of goods by value rose 3.8% in September while exports slipped 2% from the month before. (MarketWatch)

A measure of U.S. consumer confidence jumped last month to the highest reading since January. (MarketWatch)

The number of jobs open in the U.S. fell in September to the lowest level since January 2021. (MarketWatch)

Lufthansa is pressing ahead with streamlining efforts after the weak performance of its flagship carrier and rising costs weighed on quarterly earnings. (WSJ)

McDonald's sales fell for a second straight quarter , before a recent E. coli outbreak. (WSJ)

Quarterly profit at Adidas surged 71% as the sportswear supplier continues to burn off Yeezy inventory at cost. (WSJ)

The European Union will hike tariffs on Chinese-built electric vehicles to as much as 45.3% following an investigation that has prompted retaliation from Beijing. (Reuters)

CMA CGM will operate Morocco's Nador West Med port under a joint venture with local operator Marsa Maroc. (Maritime Executive)

Scorpio Tankers took a 4.9% stake in very large crude carrier operator DHT. (Lloyd's List)

A National Academy of Sciences analysis shows no support for the truckload sector's long-asserted belief in a persistent driver shortage. (Commercial Carrier Journal)

Toyota's Hino Motors truck-making unit lost $1.42 billion in the six months ending in September because of a data cheating scandal. (Nikkei Asia)

Industrial parts distributor Grainger broke ground on a 1.2 million-square-foot distribution center in Houston aimed at expanding same-day delivery capability. (Digital Commerce 360)

Wells Fargo says big candy producers are using less chocolate this Halloween to offset high cocoa prices. (Supply Chain Dive)

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at [paul.page@wsj.com].

Follow the WSJ Logistics Report team: @PaulPage , @bylizyoung and @pdberger . Follow the WSJ Logistics Report on X at @WSJLogistics .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

October 30, 2024 07:02 ET (11:02 GMT)

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