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Today’s Top Supply Chain and Logistics News From WSJ

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Story image for todays latest news from Wall Street Journal


There’s Big Data behind that antihistamine on the shelf. WSJ Logistics Reports’ Loretta Chao writes that this spring has been an unusually severe allergy season in parts of the U.S., with the drought in the West and light precipitation in the Northeast leaving allergans in the air. But planners at pharmaceutical companies and pharmacies believe they are winning the battle. Logistics planners see it as another test of a technology-driven supply chain. Anuj Agrawal, vice president of product marketing at Orchestro says the company helps firms mine big data and better anticipate future demand. In this case, that means combining information from thousands of stores and cross-referencing it with weather forecasts and other trends. Bayer AG, which makes Claritin, says it is not waiting for customers to start sneezing before supply chains respond. Says Mike DeBiasi, vice president of Bayer’s U.S. allergy business: “There are much more advanced modeling tools that we use now…to project and predict weather trends and allergy suffering.”

Chinese online retailer JD.com sees some opportunity in China’s rickety perishables logistics infrastructure. The e-commerce giant is leading an investment of $70 million in the latest round of funding for FruitDay, a Shanghai-based importer of fresh produce.WSJ Logistics Report’s Loretta Chao writes that FruitDay, which already works with some U.S. exporters, will start building out more of its distribution capabilities. It’s a market ripe for the picking, experts say, partly because service now is terribly poor in China’s version of what’s known as the cold chain. Maggie Chen, senior logistics manager at Cainiao, a platform started by Alibaba and a consortium of logistics companies in 2013, has said as many as 80% of all fruits and vegetables in China are transported in trucks with no refrigeration, leading to a 40% spoilage rate. “China lags far behind the U.S. and other countries in terms of overall infrastructure,” said FruitDay founder and CEO Wang Wei. Alibaba also is investing heavily in domestic China logistics, and if the company and JD.com put muscle behind the perishables market China could see a dramatic change in food distribution in the coming years.

The emergence of perishables distribution investment in China represents a recognition of a growing and more demanding consumer market in the country, a development drawing interest in several areas. Medtronics is certainly interested. The WSJ’s Laurie Burkitt and Jeanne Whalen report the medical device maker is looking for deals in China to sell more low-cost medical devices, a bit of a shift for a company generally seen as a premium provider. But Chief Executive Officer Omar Ishrak said in an interview that the Dublin-based company is moving into community hospitals outside China’s big cities to sell surgical tools, pacemakers and cardiac and spinal implants that cost less than its premium lines. To Ishrak, “It’s a numbers game. This will be the largest market and it’s not a debate.” The question will be, however, whether Medtronics can find the high-end supply chain services in China that the company depends on elsewhere, and whether it can turn the big-market numbers into profits.



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