Supply chain acquisitions help streamline retail mess
Supply chain acquisitions help streamline retail mess
American Eagle Outfitters announced Tuesday that it’s buying fulfillment company Quiet Logistics. It’s the clothing brand’s second acquisition this year, following its purchase of logistics company AirTerra in May.
The big reason? So that American Eagle can strengthen its supply chain.
Right now, companies may not be able to control overseas factory shutdowns or overrun shipping ports. But they can control what’s happening in their backyard — if they buy the house.
“Let’s acquire some of that capacity so that we can control it and we can remove some of the uncertainty,” said Morris Cohen, a professor of manufacturing and logistics at the Wharton School. Quiet Logistics’ eight fulfillment centers will help American Eagle cut down on costs and get its products to customers faster, he said.
But what’s in it for Quiet Logistics? Even as an American Eagle subsidiary, it will continue to run its business independently. The explosion in e-commerce means that now is the time to grow, per Karen Donohue, a professor of supply chain operations at the University of Minnesota.
“You can’t rest on your laurels,” she said. “You can’t be a logistics company that’s kinda riding the tide now and not thinking of the next big thing.”
That next big thing is partnerships that give companies like Quiet Logistics money to invest in robotics and other automated technologies. It also gives them better data from brands about the ebb and flow of products.
And that ebb and flow has been stressful for fulfillment companies, too, Third Bridge analyst Patrick Donnelly said. This deal will give Quiet Logistics real-time insight.
“I think that there’s more predictability and maybe more cohesiveness on the planning side and really understanding the total supply chain needs of a major retailer like this,” he said.
In the meantime, it’ll also give Quiet Logistics a guaranteed chunk of inventory all year round.
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