Mercado | Bed Bath & Beyond's Fist Mile focus to reduce tied up working capital is a winner

Insight – Bed Bath & Beyond’s Fist Mile focus to reduce tied up working capital is a winner

Image
Insights: What I Learned In Supply Chain This Week Series
Bed Bath & Beyond's Fist Mile focus to reduce tied up working capital is a winner
Tags: First Mile, Working Capital, Trapped Cash, Bed Bath & Beyond, Global Supply Chain, Import, International Supply Chain, Retail, Supply, Supply Chain, Technology
Dallas-based startup empowers businesses to optimize international trade.

This week The Wall Street Journal features Bed Bath & Beyond CFO Gustavo Arnal. Related, BB&B also announced the recent hiring of Juan Guerrero as SVP, Chief Supply Chain Officer.



As with many companies I have featured in this series of posts, one of his top goals is to free up cash flow by optimizing working capital. Much of that working capital it tied up in inventory. At the end of 2019, BBB had $2.1 billion in fiscal inventory. However, Arnal intends to take out an additional $1 billion in the next 18 months.

In order to achieve this, they are focused on three areas of rationalization:

  1. Vendors: Larger orders with fewer vendors is expected to lead to a reduction in overall inventory cost.
  2. Products: Fewer/more productive SKUs will help turn inventory faster, and require less inventory overall.
  3. Stores: Online buying has accelerated, so fewer stores will be needed, and existing stores will be modified for micro fulfillment.

The first two improvements here will require #FirstMile digitization in order to connect more strategically with their suppliers and products. Massive gains can be achieved with this connectivity.
ABOUT THE SERIES

Each week, Mercado CEO Rob Garrison pens his latest learnings from the supply chain industry as part of a series run for his LinkedIn followers. Each article aims to share a little insight into what's going on that week and to help foster discussion amongst industry professionals across levels, geographies, and companies.

You can connect with Rob on Linkedin by following this link.
GT Nexus founder and supply chain industry veteran, John Urban, has joined the Mercado board of directors.

This week The Wall Street Journal features Bed Bath & Beyond CFO Gustavo Arnal. Related, BB&B also announced the recent hiring of Juan Guerrero as SVP, Chief Supply Chain Officer.



As with many companies I have featured in this series of posts, one of his top goals is to free up cash flow by optimizing working capital. Much of that working capital it tied up in inventory. At the end of 2019, BBB had $2.1 billion in fiscal inventory. However, Arnal intends to take out an additional $1 billion in the next 18 months.

In order to achieve this, they are focused on three areas of rationalization:

  1. Vendors: Larger orders with fewer vendors is expected to lead to a reduction in overall inventory cost.
  2. Products: Fewer/more productive SKUs will help turn inventory faster, and require less inventory overall.
  3. Stores: Online buying has accelerated, so fewer stores will be needed, and existing stores will be modified for micro fulfillment.

The first two improvements here will require #FirstMile digitization in order to connect more strategically with their suppliers and products. Massive gains can be achieved with this connectivity.
ABOUT THE SERIES

Each week, Mercado CEO Rob Garrison pens his latest learnings from the supply chain industry as part of a series run for his LinkedIn followers. Each article aims to share a little insight into what's going on that week and to help foster discussion amongst industry professionals across levels, geographies, and companies.

You can connect with Rob on Linkedin by following this link.
                       

Terms of Service   |   Privacy Policy
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.
Copyright © Mercado Labs
                       

Terms of Service   |   Privacy Policy
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.
Copyright © Mercado Labs
                       

Terms of Service   |   Privacy Policy
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.
Copyright © Mercado Labs
                       

Terms of Service   |   Privacy Policy
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.
Copyright © Mercado Labs