Dive Brief:

• Wayfair has hired Sean Halligan as its new chief global supply chain officer, according to a press release. He replaces Allan Lyall, who left Wayfair in January, according to Lyall's LinkedIn page.
• Halligan brings more than 20 years of supply chain experience, having served in leadership roles at Target, Nike and Cardinal Health.
• At Wayfair he will oversee strategic initiatives around supply chain, including the expansion of its fulfillment center, delivery and global freight networks.

Dive Insight:

For an e-commerce specialist like Wayfair, supply chain is a critical part of both earning customer sales and the profit puzzle.

The latter challenge is one that Wayfair has not entirely solved yet. Shipping and fulfillment costs came to $2 billion in 2020, up from $1.4 billion in 2019 and $1.1 billion in 2018.

Wayfair has a long history of losses before the pandemic catapulted its sales and finally sent the home goods specialist into the black. Figuring out ways to lower its supply chain costs, along with its marketing costs, is perhaps the biggest challenge Wayfair faces as it tries to cement a sustainable business model.

Last year's widespread bottlenecks didn't make that any easier. "[I]t is true that the home category, like many sectors of the economy, is facing various supply chain bottlenecks that are resulting in inventory shortages, prolonged delivery time lines and inflation in both wholesale costs and retail prices," Wayfair CEO Niraj Shah told analysts in November, according to a Seeking Alpha transcript.

Shah went on to note, "Ripple effects from factory closures in Asia, ocean container shortages, port log jams and a tight labor market are all factors that will continue to cloud the picture through much of 2022 even as governments and private enterprises mobilize to remedy them."

Halligan, then, joins at a critical time for Wayfair's operations. In a statement, Wayfair Chief Operations Officer Thomas Netzer praised Halligan's "exceptional leadership track record and deep operations expertise spanning distribution, transportation, supply chain systems and automation strongly position him to lead Wayfair's supply chain team."

According to his LinkedIn page, Halligan has served as vice president of global logistics and trade for Target; vice president of North American fulfillment, logistics and operations for Nike; and, most recently, senior vice president of supply chain for Cardinal Health.