Afternoon Coffee: Coupa buys LLamasoft for supply chain intelligence; Amazon records large spend on shipping costs; New surges in COVID-19 will strain hospital staffing

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On Monday morning, Coupa announced that it paid about $1.5 billion the to acquire LLamasoft, a supply chain design and planning specialist, which Coupa said it will leverage to expand the direct procurement capabilities of its platform for business spend management (BSM).

For more on the Coupa-LLamasoft acquisition, read Spend Matters PRO and Nexus coverage providing context and analysis of the deal — plus, more will come later this week:

• Coupa acquires LLamasoft: Defining and Exploring the Overlap Between Direct Procurement and Supply Chain [PRO]
• Coupa acquisition: A functional overview of LLamasoft’s supply chain design offering and its intersections with procurement solutions [PRO]
• Coupa’s Biggest Acquisition Yet (Part 1) — LLamasoft Transaction Overview, Initial Musings and Deal Tailwinds [Nexus]

Amazon reports its shipping costs increase faster than online sales

Amazon announced last week that its shipping costs increased 57% year-over-year (YoY) in Q3 to $15 billion, according to Supply Chain Dive. Shipping costs grew faster than online sales (increased 38% YoY) in the same period.

Operational costs from the COVID-19 disruption have added up to $7.5 billion for the year so far, CFO Brian Olsavsky said. Expenses include things like new procedures to facilitate social distancing in fulfillment centers, ramp-up costs for new facilities, training for roughly 250,000 new employees, enhanced cleaning and personal protective equipment. The company expects to spend $4.5 billion on incremental COVID-19-related operational costs in Q4, the article reported.

The company is pulling forward some spending on logistics capacity building for the next quarter to meet the high demand.

"We're not trying to cut it close, and we're erring on the side of having too much capacity, and we think that's the right call," Olsavsky told Supply Chain Dive.

New surge of COVID-19 cases will pressure hospital capacity, staffing but not supply chain

As states across the United States reach record high cases of COVID-19, experts warn that this next wave of the pandemic will challenge hospitals because of a lack of hospital staff to handle the surge, according to USA Today.

The initial pressures on hospitals from the coronavirus were a lack of hospital beds, therapies and equipment, which pressured supply chains immensely. Now, with record cases being recorded, hospitals will need extra workers to handle the surge, but they need to replace shifts when their own staffers are sick or quarantined. However, with the virus spreading rapidly in so many states at the same time, hospitals are tapping into the same limited number of travel nurses, therapists and other clinicians, the article reported.

When cases rose heavily in Arizona this summer, the state was able to recruit out-of-state caregivers. However, other states may not be as fortunate this time around. Without extra trained workers, hospitals might have to ration care.

“The real issue is staff burnout,” Peter Fine, the CEO of Banner Health in Arizona, told USA Today. “It’s a very real phenomenon, and with a countrywide breakout, we no longer can count on contracted staff to save us.”

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