text: KOHL’S, TARGET BEGIN “AGGRESSIVE” INVENTORY DRAWDOWN: Executives at retail giant Kohl’s say the company has too much inventory due to weaker consumer demand and large purchase orders. The company is paying hundreds of millions of dollars in added expenses and marking down older inventory to clear it out of retail stores and warehouses. Target is also lagging short of sales targets, resulting in an 87% year-over-year drop in operating income, and is also marking down prices to clear out older inventory. (AC: We’ve been reporting on this trend since at least September of last year – U.S. retail outlets doubled and tripled new purchase orders to keep up with post-lockdown consumer demand and supply chain disruption and are now saddled with too much inventory. Expect large discounts and sales as other retail giants join Kohl’s and Target attempting to reduce inventory costs. – M.S.)TAKEAWAYS FROM U.S.-MEXICO SUPPLY CHAIN CONFERENCE: The logistics companies running freight across the U.S.-Mexico border are moving towards decentralization and automation. A conference held at Texas A&M International hosted dozens of specialists to discuss the move away from globalization into regionalization and how companies can navigate the transition. Key themes included automation, blockchain tracking, and networks of smaller businesses. The shortfalls they identified were primarily in labor shortages. (AC: Discussions during the conference support the argument of de-globalization, and the near-shoring, reshoring, and “ally-shoring” of supply chains. Some labor shortages are being filled with automation, the use of drones, self-driving vehicles, and assurances that all laborers currently employed can be easily switched to the technical fields to support these measures. – J.V.)GEOSTRATEGIC INTSUMPUTIN SIGNS DECREE TO INCREASE RUSSIAN FORCES: Russian President Vladimir Putin announced a decision to increase the size of Russia’s standing military from 1.9 million to just over 2 million troops. The decision goes into effect on 01 January 2023. (AC: Russia is increasing its military staffing by 137,000 personnel. That is roughly equivalent to 10 U.S. Army Divisions with 2-3 Corps-level headquarters units or possibly a combat service support unit – a significant expansion. The question now is what type of units will this increase support and how quickly Russia can mobilize its military-industrial base to equip these new units. The increase is indicative of Russian planning for extended combat operations in Eastern Europe- M.M.)SAFETY SYSTEMS TRIPPED AT UKRAINIAN NUCLEAR PLANT: Safety systems were turned on at the Zaporizhzhia nuclear power plant in southern Ukraine, currently held by Russian forces. Russian state media reported a loss of electricity in the region, including the Zaporizhzhia nuclear power plant.SOUTH KOREA TO BUILD AUTONOMOUS HUNTER-KILLER DRONE TO DEAL WITH NORTH: Last week, South Korea’s Korean Air announced it would build South Korea’s first indigenous stealth multi-role fighter. This week, it announced that it was also building an autonomous hunter-killer stealth drone aimed at hitting high-value targets in North Korea. The new drone is capable of autonomous swarm operations as well as loyal-wingman operations accompanying manned fighter jets. (AC: South Korea’s Agency for Defense Development ran its first stealth development program from 2019-2021. The latest announcement by Korean Air is the culmination of the same program that produced the KF-21 Boramae fighter. Autonomous hunter-killer and loyal wingman drones will likely serve as force-multipliers tasked with hitting the more difficult and heavily defended targets like surface-to-air missile sites and leadership targets. – M.M.)