Author Archives: Teddy Nee

China’s Cainiao Is Revolutionizing How Goods Get Delivered. Will the Rest of the World Follow Its Rules?

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In this picture taken on November 6, 2020, an employee works in the warehouse of Cainiao Smart Logistics Network, the logistics affiliate of e-commerce giant Alibaba, in Wuxi, China's eastern Jiangsu province, ahead of Singles' Day, also known as the Double 11 shopping festival - the world's biggest shopping event - which falls on November 11.

In this picture taken on November 6, 2020, an employee works in the warehouse of Cainiao Smart Logistics Network, the logistics affiliate of e-commerce giant Alibaba, in Wuxi, China’s eastern Jiangsu province, ahead of Singles’ Day, also known as the Double 11 shopping festival – the world’s biggest shopping event – which falls on November 11. Photo by HECTOR RETAMAL/AFP via Getty Images

It might not be the slickest thing on four wheels, and it definitely won’t win any time trials, but Chinese logistics firm Cainiao’s new Xiao G delivery cart could be the future.

Every hour, the three-foot by five-foot automated vehicle picks up packages from Cainiao’s depot in Hangzhou—a city of 10 million people in China’s booming east—and tours a nearby neighborhood. Locals in pajamas pop down to meet the driverless cart at their nearest delivery point and type in a reference number. A door in the vehicle’s side pops open and the customer’s parcel can be retrieved. Xiao G heads onto the next stop, weaving ponderously through traffic via 360-degree sensors.

“It sends a message to customers after setting off and another when it arrives at a pick-up point so they know to come down,” says Cainiao engineer Long Fei. “Some models allow customers to drop off as well as pick up packages.”

In terms of innovations in logistics, Xiao G may not be as earth-shaking as the shipping container or the cargo jet. But it is the most visible aspect of a stealthy revolution powered by Cainiao, which was founded in 2014 and whose name means “rookie” in Chinese. The $10 billion subsidiary of e-commerce behemoth Alibaba says it is poised to transform worldwide trade.

How your purchases could be delivered in the future

The Xiao G is part of Cainiao’s plan to create a single ecosystem for all logistics firms across the world to plug into, allowing for the seamless transfer of goods between companies and jurisdictions. Just as myriad smartphone makers all operate on Google’s Android, Cainiao envisages thousands of independent logistics firms can operate within its system, sharing everything from labeling standards to customs information.

“What they’re doing is bigger than it appears to be,” says Jeffrey Towson, a private-equity investor and a professor of investment at Peking University in Beijing. “It might be the single most important thing happening in China’s digital space.”

Cainiao is far from a typical logistics firm, but is an open platform that allows for collaboration with 3,000 logistics partners and 3 million couriers—including the top 15 delivery firms inside China and 100 operating internationally. This enables merchants to choose the most cost- and time-efficient delivery option, based upon real-time data crunching of optimum firms and routes.

For consumers and manufacturers, this means a typical, 1 kg package can be sent anywhere in China within 24 hours for around 30 cents. The goal is to deliver it anywhere in the world within 72 hours for $3. (Currently, a DHL envelope under 0.5 kg from Shanghai to London costs around $100 and takes typically 5 days.) That stands to be a life-changing boon to coffee-growers in Peru, textile-weavers in Chad, medical instrument producers in Bangalore and everyone in between.

How the COVID-19 pandemic pushed logistics innovation

By putting sensors in everything—along with cameras in every warehouse and GPS on every truck and package—Cainiao aims to digitize the logistics process from top to bottom.

In China, the implications are vast for the $1.94 trillion e-commerce sector, currently the world’s largest and three times the size of its U.S. counterpart. Some 64 billion parcels were sent last year domestically but current delivery networks are piecemeal, inefficient and wasteful. Wander any Chinese city or town and it’s common to see gangs of smoking delivery drivers sorting through heaps of crumpled packages on the street. Packaging is also obscenely wasteful: order a 0.1mm protective film for your smartphone screen and you could find it turning up in a shoebox-sized carton packed with air pillows and styrofoam.

So there’s enormous scope to boost profits, and safeguard the environment, though savings on fuel, packaging and unnecessary storage. E-shipping labels alone save over 400 billion pieces of paper and offset a billion kilograms of carbon emissions annually, according to Cainiao. And then there is the cost. “China will process 70 billion parcels this year,” says Wan. “What if you can shave just one cent off each one?”

Wan is used to thinking big. After earning a doctorate at the University of Texas at Austin, he spent nine years at Amazon, eventually reporting directly to Jeff Bezos as director of global logistics strategy. He says Seattle “still feels like home” and credits Bezos for instilling an ethos of “let’s raise the bar and exceed expectations.”

Read more at China’s Cainiao Is Revolutionizing How Goods Get Delivered. Will the Rest of the World Follow Its Rules?

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How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

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How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

No matter the hurdles of 2020, Logistics was up for the challenge. It kept production running and critical supplies flowing while adjusting to the shocks in demand and supply patterns and delivering essential goods.

The industry has already begun its transformation into a pull paradigm. To adjust to a new logistics footprint, operations are catering to smaller and more frequent shipments, while increasing its stronghold in eCommerce. With shippers and Logistics Service Providers (LSPs) attempting to increase their capabilities for market share gain, gone will be reactive bulk handing, serial execution, and long planning cycles.

Now it’s time for logistics to up its game — again.

How can it morph from inside-out, efficiency-focused to a model that’s outside-in and centered around the customer experience? We believe the future of logistics is unified logistics, where shippers and LSPs can seamlessly plan, optimize, and orchestrate across nodes and networks, resulting in consistently higher customer service levels and efficiencies.

Let’s discuss the aspects that make unified logistics a reality.

Boundaryless Orchestration

Existing logistics systems are usually configured with static, pre-setup actions, and often lack advanced visibility. Even if visibility exists, the functionality does not allow timely execution. Warehouse systems may not be able to consider transportation information and vice versa.

Upstream Supply Chain Knowledge

Traditionally, transportation systems lack order visibility and updated supply chain plan information. In the warehouse, traditional distribution and fulfillment operations rely on aggregate and longer-term forecasts to plan labor schedules. The inventory positions in warehouse systems are determined by historical patterns and longer-term forecasts, causing operations to be reactive.

Digital Ecosystem and Network

The historic approach to collaboration and point-to-point integration won’t create an easy path to real-time communications for carriers and LSPs. Now with access to the digital network, shippers can tap into carrier networks, take capacity into considerations for order promising, and select last-mile delivery providers. Before, the carrier selection process was highly manual and used static rates, and now shippers can perform Dynamic Price Discovery to view freight rate quotes from carrier marketplaces.

Unified Logistics, powered by our Luminate Logistics and Luminate Platform solutions, arms shippers and LSPs with the ability to seamlessly plan, optimize, and orchestrate supply chain execution. They can gain consumer confidence by truly delivering the right product, to the right place, at the right time — even if the lot size is small.

Read more at How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

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Inventory Management: We Can Do Better

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Inventory Management: We Can Do Better

Inventory Management: We Can Do Better

Each day through the COVID-19 pandemic, I tune into Anthony Cuomo’s (governor of New York) daily briefings. It is my break in the day. As a multi-tasker, when Governor Cuomo broadcasts, I use the time to work out on my rowing machine.

His opening line is, “Let’s start with facts. While we all have opinions, let’s start by reviewing the facts.” When he says this, I smile and row harder. I wish that all discussions could start with the facts.

Reflection

In my day-to-day work in supply chain management, I find more encounter more opinions than facts. …most discussions are fueled by over-zealous and self-serving marketing programs. Strong opinions and egos (mostly male) abound… For over two decades, I obediently tapped my foot to technology leaders’ glibly spouting opinions. I seek facts, but I find that they are few and far between.

The lack of fact-based discovery makes me itch…

A Story

Last week on my Network of Networks call, a proud technology salesperson, let’s call him Jim, announced, “I am speaking at Logimed next week on the impact of Just-in-Time (JIT) on the COVID-19 response. Downsizing inventories over the past decade crippled the response.” As I heard Jim speak, I twisted in my seat unsure what to say.

I struggle when I hear opinions that don’t align with facts. So, let’s start with the data. (Yes, am that geeky kind-of-gal that likes to ground discussions in data.) In Table 1, I share research collected for the Supply Chains to Admire analysis on the average days of inventory by industry across the period of 2004 to 2019 by increments to match economic shifts. The period of 2007-2008 was the downturn of the recession while the period of 2009-2013 marked the recovery. (The source of this data is a syndicated data provider of public reporting termed “Y-Charts.”)

So when we start with the facts, it is clear that every industry peer group increased the days of inventory. In addition, each peer group is markedly different. So, why have we not reduced inventory?

Now I will share my opinion.

  1. Complexity. Supply chain leaders in the beverage and household products industries struggled to manage complexity.
  2. Supply Chain Leadership. With average operating margins of 20-22%, medical device and pharmaceutical companies are supply chain laggards.
  3. Supply Management. Industries like automotive pushed cost and waste backward in the supply chain.
  4. Network Design. Only 9% of companies actively design the supply chain with a focus on buffer design.
  5. Factory Scheduling. With the evolution of the advanced planning market and the growth of the market share of ERP expansionist companies, solution capabilities in factory scheduling weakened.
  6. Executive Understanding. Many executives do not understand the form and function of inventory and the need for inventory buffers.
  7. Balance in S&OP. While 82% of companies have an S&OP process, less than 50% of company processes are balanced and only 1/3 of companies actively run “what-if” scenarios.

Read more at Inventory Management: We Can Do Better

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AI This. Not So Fast.

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AI This. Not So Fast.

AI This. Not So Fast.

Grounded during this pandemic, and unable to interact with clients in person, I try to write 3,000 words a day. Morning after morning, fueled by good black coffee, I type away. I share insights, based on research, for the supply chain leader. I write for this blog, craft reports from research for our newsletters, create blogs for Linkedin, and build articles for Forbes. I am also developing a framework for my new book. Stay tuned.

Frequently, when I post about an issue, a well-intending consultant or an aggressive business development executive will tout the evolution of the autonomous supply chain as the answer. The comment is usually something like, “Implement RPA or AI to solve this problem.” Or, “If you need an answer, implement my solution.” When this happens, I sigh. This type of response is just not helpful. Everyone tries to be a cool kid with over-zealous comments on posts, but unfortunately, there is no truth in advertising in the supply chain market. (If the industry were grounded in truth in advertising repercussions, there would be far fewer signs in the airports from consultants and technology providers.)

Background

The autonomous supply chain is a vision, but it is not today’s reality. I find in my Supply Chains to Admire research that 96% of companies (when compared to their peer groups) are unable to drive improvement while delivering higher performance year-over-year on a balanced scorecard of growth, inventory turns, operating margin and Return on Invested Capital (ROIC). I define supply chain excellence as year-over-year performance better than the peer group on this balanced scorecard. Ecolab, L’Oreal, and TJX are exceptions. They did it. Each company ranks in the 4% of companies beating their peer groups.

Shifts in Technology

Data science and cloud-based delivery offer promise, but supply chain planning is morphing slowly. …and at the edges. No technology company is attacking supply chain planning at the center.

Let’s celebrate that over the last two years, there were four significant acquisitions by traditional supply chain planning providers to deepen analytics capabilities:

  1. 07/2018 JDA purchases Blue Yonder (Purchase price confidential.)
  2. 11/2017 Logility acquires Halo for 9.3 M$
  3. 10/2019 Llamasoft merges with Opex (Amount not disclosed.)
  4. 06/2020 Kinaxis buys Rubikloud for 60M$

Examining The Current State

The analyst mindset is to track software evolution by taxonomy where like solutions are grouped, named and tracked. Supply chain planning is a subset of the decision support technology taxonomy. Other forms of decision support include revenue management, trade promotion management, cost-to-serve, and network design. Now in its fifth decade of evolution, supply chain planning is starting to change. The shifts are happening slowly at the edges. I am celebrating, but my hope is to drive seismic changes from the center. What we have now is not good enough, and I have my fingers crossed that COVID-19 will drive a significant and positive shift by highlighting the deficiencies.

Read more at AI This. Not So Fast.

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COVID And Now Hurricane Laura

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COVID And Now Hurricane Laura

COVID And Now Hurricane Laura

The U.S. Texas and Louisiana Gulf coast region is this evening undergoing mandatory coastal evacuation procedures in the wake of Hurricane Laura, now a Category Four storm with catastrophic strength.

Peak winds are forecasted to be as high as 150 miles per hour (240 kilometers per hour) accompanied by a possible 15-foot water surge at time of landfall with forecasters now warning of lethal flooding and wind damage. Reports point to the potential of upwards of billions of dollars in potential property loses.

Hundreds of thousands of people are reportedly at risk.

As if the COVID-19 disruption was not enough, multi-industry supply chain management teams must now prepare for whatever affects come from this major storm

From a supply network perspective the threatened area includes the epicenter of U.S. oil refining and petrol-chemical facilities, along with the major port areas of Houston and New Orleans. Facilities that are in the path of the storm are already closed and making appropriate preparations including the largest refinery complex in the United States, Saudi Aramco’s Motiva refinery.

Comparisons are already being made to Hurricane Katrina that occurred in 2005 or Hurricane Harvey that occurred in 2017, each storm of similar magnitude which resulted in upwards of $150 billion in property damage, loss of life and multi-days of industry supply chain disruption.

Read more at COVID And Now Hurricane Laura

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Resilience is the New Name of the Game in Supply Chain

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Resilience is the New Name of the Game in Supply Chain

Resilience is the New Name of the Game in Supply Chain

For the majority of Supply Chain’s history, this evolution has been driven by a knack for finding efficiency. Companies have leveraged digital tools, and evolving skills, to collect vast data about product or raw materials sourcing, transportation, logistics, and manufacturing. They’ve hired strategic Supply Chain professionals who can turn this data into actionable intelligence, and redesign the supplier, production, and transportation network to get products to market quicker and cheaper. They use advanced ERP software and S&OP strategy to match supply with demand, and turn over inventory faster and faster. “Just-in-time” production has become a hallmark of today’s Supply Chains.

Case in point: research firm Gartner includes the speed of inventory turns as a key metric in its annual Top 25 List recognizing companies for their excellence in Supply Chain.

Now, the top Supply Chain professionals are those who can find those efficiencies, while providing a strong customer experience that safeguards the company’s brand. It’s been a long evolution, and it’s made the field more ascendant within companies than it’s ever been, with a bigger seat at the C-suite table. Risk mitigation, innovation through supplier collaboration, and increased sustainability have also driven Supply Chain’s strategic value – but they’ve taken a back seat to efficiency.

Then came COVID-19.

As we’ve also written about recently, the COVID-19 pandemic has caused almost-unprecedented disruptions to a majority of companies’ Supply Chains – as many as 72%, according to a recent Supply Chain Canada survey.

We’re four months into the pandemic, and it appears that these disruptions have spurred another evolution:

More than ever, companies are focusing on Supply Chain resilience

All around the Supply Chain world, professionals are shifting their focus to make sure that they can withstand supplier disruptions, not only due to COVID-19, but to future emerging issues as well.

In our recent interview with Procurement Guru Jill Button about the particular Supply Chain challenges of the moment, she highlighted this shift, saying: “People are beginning to understand the risks and fragility of a Supply Chain and not having a sound Procurement practice. I think, as a field, we need to step up and embrace this moment.” In March, at the outset of the pandemic, industry thought leader Bob Ferrari wrote about how, in a world of supplier disruption, companies might shift from a just-in-time inventory model that maximizes efficiency, to one that prioritizes a diverse supplier base to maximize resilience.

Top consulting firms are taking notice too, in their own advice to corporate leaders: Bain, Deloitte, McKinsie, and Baker McKenzie, and others have released white papers in recent days on the importance of Supply Chain resiliency and risk mitigation in this new era.

Read more at Resilience is the New Name of the Game in Supply Chain

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How To Manage Organizational Knowledge Without Killing It

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Executives must create a climate of trust and openness for individuals to share individual knowledge.

Executives must create a climate of trust and openness for individuals to share individual knowledge.

Knowledge is identified as a multi-faceted concept, and is distinct from information and data.

Data has been defined, by Haridimos Tsoukas and Efi Vladimirou, as raw entities, and information is understood as a meaningful pattern within these raw entities. Knowledge can be understood as a concept for solving problems. In particular, Knowledge is a combination of rules, procedures, beliefs and skills that positively contribute to solving organizational problems. The key take-away for executives is that knowledge is a resource that enables organizations to solve problems and create value through improved performance and it is this point that will narrow the gaps of success and failure leading to more successful decision-making.

Knowledge, with its wide classifications, can be classified into individual and collective knowledge . Executives recruit followers based on their individual knowledge which refers to the individual’s skills, prior-knowledge, and proficiencies or sometimes referred to competencies. Collective knowledge, on the other hand, has been defined, by Sharon Matusik, as “organizing principles, routines and practices, top management schema, and relative organizational consensus on past experiences, goals, missions, competitors, and relationships that are widely diffused throughout the organization and held in common by a large number of organizational members”.

Thus, collective knowledge is part of the executive’s protocol and comes fairly natural at the higher echelons of the organization. Executives follow Thomas Davenport and Laurence Prusak’s concern that concludes that if an executive cannot inspire its followers to share their individual knowledge with others, then this individual knowledge is not valuable to the organization. Therefore, like tacit knowledge, individual knowledge can become a valuable resource by developing an organizational climate of openness for members to exchange their ideas and insights.

Executives must create a climate of trust and openness for individuals to share individual knowledge.

This is not new, Wolfgang Wagner and Katsuya Yamori show that new technologies drawing on social-software systems through sharing individual knowledge around the organizations can positively contribute to create collective knowledge.

Therefore, executives should build an atmosphere of trust and openness and use technology to convert individual knowledge into valuable resources for their organization to close the performance gap and help organizations prosper. Executives have been now introduced to one important category of knowledge. Knowledge can be articulated, or shared, and executives can now assess whether knowledge is a valuable factor for commercial objectives.

Read more at How To Manage Organizational Knowledge Without Killing It

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Supply Chain Creativity During COVID-19

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Supply Chain Creativity During COVID-19

Supply Chain Creativity During COVID-19

Just as we typically don’t think about how groceries get to our grocery store, we probably don’t wonder how medical supplies get to our hospital room or doctor’s office. But for those of us who work in hospital supply chain management, we know a lot of negotiating, storage and coordination goes into this at the best of times.

As the world confronts COVID-19, issues regarding medical supply chains have been thrust into the spotlight. When a previously nonexistent health threat spreads across the globe in a matter of weeks, demand for essential medical equipment suddenly outstrips supply. Fraudulent vendors become a higher risk. Established vendor partnerships are strained. In fact, this virus originated near a major personal protective equipment (PPE) manufacturing area in China. This greatly reduced supply at a time when the world needed it most.

While most of UW Health has thus far not encountered a surge of COVID-19 patients, we have still faced unprecedented challenges since the onset of the pandemic. To overcome these current and potential shortages, serious creativity and collaboration need to be front and center.

With so much still unknown, a best-case scenario might be a new normal of carefully caring for COVID-19 patients in steady conjuncture with the many other patients who need our support. This creates a significant and prolonged increased need for PPE, posing tremendous challenges as the supply chain is under immense stress.

Using Public and Private Partnerships

As an academic medical center where our physicians are also faculty of the University of Wisconsin School of Medicine and Public Health, UW Health often works methodically. Now that time is of the essence, the health system and university have been collaborating closely and swiftly, and UW Health is benefiting greatly from its close partnership and proximity to the institution’s educators and students.

Making Unusable PPE Usable

In mid-March, UW Health received 1,250 hoods from the strategic national stockpile. These were meant to be used with our PAPRs, the respiratory protection systems that protect healthcare professionals when bodily fluids can be aerosolized, such as during intubation. Powered by a blower strapped around the wearer’s waist and connected by a hose to a hood covering the head, PAPRs offer the highest form of protection to a medical professional’s head, face and respiratory system during high-risk procedures.

Keeping Hand Sanitizer Flowing

As COVID-19 rapidly spread, the supply of hand sanitizer dwindled everywhere. We knew we would be hard-pressed to safely care for patients without it, so again we relied on the ingenuity and expertise of partners, this time at the UW-Madison School of Pharmacy’s Zeeh Pharmaceutical Experiment, which typically focuses on supporting drug development.

Reuse and Recycle

Sometimes supply chain challenges are not about getting or making more, but making existing supplies go further. We began sterilizing used N-95 respirators to reuse if we experienced a significant surge of patients. We have not yet needed to use them, but preparing for the worst is vital.

UW Health goes through thousands of surgical, isolation and patient gowns each week. Sourcing new, disposable gowns would be nearly impossible in the current climate. Fortunately, we are part of a laundry cooperative that not only launders all linens but sterilizes surgical and isolation gowns. Partnerships like this put a health system in a better position to control the supply chain than if it were a contracted client to a third-party laundry vendor or disposable gown supplier.

Read more at Supply Chain Creativity During COVID-19

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Seven Supply Chain Processes To Stop Doing In The Pandemic

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Seven Supply Chain Processes To Stop Doing In The Pandemic

Seven Supply Chain Processes To Stop Doing In The Pandemic

I remember standing in the temperature screening queue in Doha. As the line wound around multiple stations, my backpack cut into my shoulders. I was tired and cranky as I read the overview of MERS. As an United States resident, I was blissfully unaware of this virus and worried about catching my flight to Singapore. My ignorance of a potential pandemic was low.

Changing My Mental Model

The Middle East Respiratory Syndrome (MERS), first reported in Saudi Arabia in 2012, didn’t make headline news. Likewise, I watched the coverage of SARS, H1N1, and Ebola from my TV screen. As the COVID-19 saga unfolded, this was my mental model. My first articles dealt with the virus as a Chinese localized phenomenon. My jaw dropped when a friend became ill in Dallas in January from a visit to Dubai. I never conceived that it would become my reality.

Start Doing

In my prior articles, I have written extensively on the need for outside-in demand sensing processes based on market consumption data. I have also written about the need for supplier development programs and building robust supply chain capabilities in value networks. (I list these articles at the bottom of this post for reference.)

Stop Doing

What can we stop doing? The first step is to stop traditional demand planning processes based on conventional order pattern modeling. (This is the ouput of the conventional Advanced Planning models.) The modeling of historic order patterns is worthless through the pandemic. Why? The sales order pattern is no longer a predictor of future demand. Instead, invest in market sensing and the use of market consumption data. Attempt to read market shifts as they happen and drive a response.

Wrap-up

In closing, let me leave you with some thoughts. The pandemic is the result of a novel virus. Today, we have more that is unknown than known. What we stop doing will give us resources to focus on managing the supply chain in these uncertain times. Let me know your thoughts, and good luck.

Read more at Seven Supply Chain Processes To Stop Doing In The Pandemic

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April manufacturing output feels impact of COVID-19

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While March began to show how the coronavirus, or COVID-19, began to truly impact the economy, things came into even starker perspective in April, based on data in the Institute for Supply Management’s (ISM) Manufacturing Report on Business, which was released today.

The report’s key metric—the PMI—at 41.5 (a reading of 50 or higher indicates growth)—declined 7.6% from March’s 41.5, falling for the second straight month, which was preceded by two months of growth. The April reading was 7.5% below the 12-month average of 49.0 and is also the lowest reading over the last 12 months and the lowest reading going back to April 2009’s 39.9. What’s more, ISM reported that April marked the first month that the overall economy contracted after a stretch of 131 consecutive months of economic expansion.

ISM reported that two of the 18 manufacturing sectors it tracks saw growth in April, including Paper Products; and Food, Beverage & Tobacco Products. And the 15 industries reporting contraction in April, in order, are: Printing & Related Support Activities; Furniture & Related Products; Transportation Equipment; Textile Mills; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Wood Products; Miscellaneous Manufacturing; Computer & Electronic Products; Primary Metals; and Chemical Products.

Each of the report’s key metrics saw declines in April.

New orders, which are commonly referred to as the engine that drives manufacturing, saw a steep 15.1% decline, to 27.1 after a 7.6% decline, to 42.2, in March. This marks the third straight month of declines and is the lowest reading for new orders since December 2008’s 25.9. ISM said that two industries—Food, Beverage & Tobacco products and Paper Products—saw growth in April, with the remaining 16 all seeing declines.

Production—at 27.1—was down 20.2%, contracting for the second straight month and is the lowest figure since numeric ISM Report On Business index records were first issued in January 1948, with the 20.2% decrease from March representing the largest one month decline going back to January 1984, when it was down 20.7%. ISM said that two manufacturing sectors—Paper Products and Food, Beverage & Tobacco products—grew in April.

Employment—at 27.5—was down 16.3% compared to March, falling for the ninth consecutive month, and is its lowest reading since June 1949’s 27.2 reading, and represents the largest one-month percentage-point decrease going back to January 1948, when ISM began keeping numeric records. ISM said that each of the top six manufacturing sectors saw employment contraction driven by the furloughs and layoffs, due to a lack of new orders, with social distancing mandates also factoring into the number.

April inventories—at 49.7—headed up 2.8%, while contracting at a slower rate for the 11th consecutive month. The report explained that inventory contraction slowed as was expected, due to supply chain disruptions and the lack of labor to convert material, with 10 manufacturing sectors reporting higher inventory readings in April.

Read more at April manufacturing output feels impact of COVID-19

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