Supply chain news wrap: Target’s bloated inventory, Netflix’s supply chain woes & more


By FarEye | October 13, 2022

Hello there! Here's your dose of all the top news in the world of supply chain and logistics from the past week.

Target's Bloated Inventory

Target's got an inventory problem. The mega-retailer has canceled incoming orders and cut prices for certain goods. Why? Because people aren't buying stuff like television sets, home furniture, and appliances anymore - items that Target overstocked during the pandemic. The demand has fallen way below the levels it was during the pandemic.

And now, Target wants to “right-size” inventories. So, televisions are 25% off and prices of several other goods have been marked down. The retailer is also shifting its strategy and focusing more on fulfilling groceries and household essentials demands.

Retailers like Target and Walmart can do better demand forecasting and inventory management leveraging AI and machine learning, and by introducing more end-to-end visibility in supply chain operations. And it seems like it’s something that the retailer is working on. Reuters reports that Target is looking to strengthen parts of its supply chain to match the shift in strategy.

Netflix’s Supply Chain Troubles

In its Q1 letter to shareholders, Netflix partly blamed smart TV availability for poor quarterly results. Smart TVs are America’s favorite device for streaming movies and shows. So, when TV sales plummeted by close to 2 million in 2021 They shaved off a bit from Netflix’s revenue too.

What’s behind the drop in TV sales? Supply chain disruptions and semiconductor shortages continue to plague retailers. Shipping delays and low availability of components led to an increase in the cost of production spiking the market price of television sets.

With supply chain snags continuing to impact the world economy and experts predicting a slow recovery, companies are focusing on digital transformation to make their supply chains more adaptive to future business disruptions.

Another Supply Chain Headache

South Korean truck drivers have been on strike for seven days demanding a hike in wages. The protest has disrupted production resulting in a loss of close to $1.25 billion so far.

Automake Hyundai saw its production halved while steel giant POSCO's shipments have been affected. South Korea is home to some of the biggest names in semiconductor manufacturing.

While the likes of Samsung and SK Hynix have not commented on the strike so far, the Korea Enterprises Federation - which includes representation from South Korea's semiconductor companies, issued a joint press release asking the truckers to call off the protest.

More manufacturers are pivoting to technology to diversify their supplier network and manage risk. A diverse supplier network makes supply chains more agile and resilient.

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