COMMENT: GT Nexus discusses the Greek supply chain
When we think about the Greek exporting economy, businesses that rely on Greek suppliers will likely b...
When we think about the Greek exporting economy, businesses that rely on Greek suppliers will likely be looking at alternative sources to counteract the risk of evaporating credit in the country as the uncertainty continues. It’s important to bear in mind that the Greek crisis is not unlike other kinds of supply chain disruption. Modern companies are vast, global organisations, and they rely on partners all over the world so, when faced with a crisis – whether it is an earthquake in Japan or a tsunami in Thailand that shuts down part of a company’s sourcing operations – the outcome is the same; difficult decisions have to be made. Often, budgets will be pushed aside in order to make any moves necessary to protect the company against stopped production, late inventory and lost sales.
No access to financing is a big problem for any organisation and can cause rippling effects up and down the supply chain. A new way for companies to mitigate the risk of a trading partner getting cut off from cash needed to fund their operations is to transact via a cloud-based community platform that can provide access to capital, independent of local banks. When all transactions run through the platform, a supplier’s track record as a reliable partner can then be leveraged to secure financing. Instead of providing access to cash based solely on a trading partners’ credit, as is typically the case, funding decisions can be made based on that partners’ performance history. In doing so, cloud can free a company from the confines of the nation in which it is operating in – whether that’s a high interest third-world economy or, pertinently, an economy that is convulsing.
This big data approach to evaluating credit risk can prevent a supplier with a clean track record from becoming an innocent victim of the circumstances. Financing decisions based on big data from the supply chain can help mitigate the risk for all parties involved. In addition, by connecting businesses with their execution partners via a single platform, all the partners along the chain gain a shared version of what is happening anywhere in the network. This also means that businesses can synch their systems and processes and orchestrate as one network, and not a collection of separately optimising companies.
XPO Logistics Completes Spin Off of GXO Logistics
XPO Logistics has completed its spin-off of GXO Logistics, creating two independent public companies.
GXO Logistics today marked the occasion by ringing the opening bell on the New York Stock Exchange. GXO leadership and board members were in Manhattan to mark the “exciting milestone in GXO’s history”, opening Wall Street and celebrating the business’s first day of regular way trading.
“We consider it a privilege to launch GXO as a new company at the top of the industry — the world’s largest pure-play logistics provider,” said chief executive Malcolm Wilson, in a statement. “We have a powerful platform for future growth, including our culture of innovation, strong customer relationships, seasoned leaders and a world-class team. This is day one of unlocking vast new potential for our company.”
GXO Logistics in Brief
- CEO: Malcolm Wilson (formerly CEO, XPO Logistics Europe)
- Employees: 94,000 approx.
- Warehouse capacity: 208m sq.ft
- Key customers: Apple, Nike, Whirlpool, Nestlé
XPO’s Pure-Play Strategy
XPO Logistics announced plans to spin off its logistics division in December 2020, with the intention of creating two pure-play entities focussed on contract logistics (GXO) and freight transportation (XPO).
In an interview last month, GXO Chief Investment Officer Mark Manduca said there is “massive scope” for growth both organically and through M&A activity. "A deep pool of potential new business exists for GXO, both through share gain and penetration,” he added, explaining that companies are increasingly looking to outsource logistics as supply chains become ever complicated.
GXO is a leader in logistics automation and robotics, leveraging AI and machine learning to ‘turn logistics into a competitive advantage’ for its customers. It has approximately 94,000 employees, and counts Apple, Nike and Whirlpool among its blue chip customers. The company says it will also look to strengthen its presence in other high-growth areas, primarily ecommerce, apparel, technology, food and beverage, and consumer electronics. The company has 208m+ sq.ft of warehouse space across 869 locations in 27 countries.