Friday, November 13, 2009

What is the Carbon Footprint All About?

Sustainable development, carbon footprint, global warming, cap and trade, Kyoto, green this, green that. Who hasn’t seen, read and heard article after news report after blog, talking about how we are wrecking the environment and that things need to change. Is it really that big a deal?
Well, let’s think about what has been happening;

  • Glaciers and polar ice caps have been retreating at an alarming rate and scientists are predicting that the arctic ice cap will melt by 2020 (if not earlier)
  • Sea levels have risen between 4 and 10 inches since 1990 as a result of the melting polar ice caps
  • We’re seeing Increasingly violent storms. 35 years ago, 1 in 6 tropical storms were considered to be major storms, in recent years, 1 in 3 are major storms.
  • Increasing floods and droughts
  • Scientists are constantly reporting on impact on wildlife due to global warming from polar bear problems in northern communities to changing bird migration patterns.
  • Scientists are now (mostly) in agreement that global warming is happening and that there is a significant need to do something now.

People and governments are starting to listen. Many governments are setting targets for greenhouse gas reductions. People are looking for information to help them make better decisions when buying. Want to know More.....

Tuesday, September 29, 2009

Price are Down!

Titanium demand collapse will depress prices through 2010
TITANIUM demand has collapsed this year and the market price for benchmark aerospace ingot is almost 70% off its peak and probably at its cyclical bottom. And, according to news reports from the International Titanium Association's recent annual conference, there's little indication of a major upturn in purchasing or pricing anytime soon.
Read more.........

Molybdenum prices are sliding backwards
Spot prices dip due to uncertain demand trend from steelmakers
Although U.S. steelmaking is close to 60% of capacity, market prices for molybdenum, a key alloying smelting metal, has slipped to an average $14.55/lb this month (from $16.18 in July) and could be selling by a dollar or more cheaper next month. Read more......

Aluminum prices are being depressed by excess supply

World aluminum prices have slipped to an average 83¢/lb this month, bringing the annual average down to 70¢ (from $1.17 in 2008) as demand remains soft and global stocks are at record highs of 5.8 million metric tons

Ferrovanadium prices are slipping

The alloying metal was selling as low as $7.40/lb in April because of a serious overhang of inventory and collapsed demand from specialty steelmakers. Prices inched back up from May to August in line with reduced stockpiles caused by expanded exports and slow and gradual improvement in purchases by the domestic steel companies. Read more......

Monday, September 14, 2009

So KRAFT is planning a Cleanup?

First they make an offer on Cadbury's now they decide to have a clean up. Of what? Their supplier base. Read more about it as found in Supply Excellence.

Monday, September 7, 2009

Supplier Relationship Management (SRM) - a strategic approach

Most manufacturers agree SRM is important – but do not understand what it really is?
Many see it as a mechanism for monitoring and improving suppliers' performance. This contrasts with the broader definition of SRM as 'a discipline of working collaboratively with those suppliers that are vital to the success of your organization, to maximise the potential value of those relationships.

This misconception may explain why many believe SRM only starts once a contract is signed. It should, however, be used at every stage of the procurement process.
Key suppliers critical to your business should be as important as your customer. Your success demends very much on him

Before you even identify a materials need, good relations with a strategic suppliers could help by bringing innovative ideas to you. These could result in efficiency or real cash savings, product improvements or faster times to market

For example General Motors has just announced plans to split cost savings evenly with vendors that submit successful ideas on cutting the cost of car parts.

Get your existing suppliers involved as part of a cross-functional team. “
Explore how your suppliers supply chains works, especially if you’re attempting something new. Failing to do this could make things unnecessarily difficult for the supplier and potentially add in cost for your company.

Experts advise purchasers consider approaching negotiations with strategic suppliers with one eye on the implementation stage. If you pressure vendors hard for a price cut and make tough, changing demands one day then begin working with them the next, they will not be quick to forget how you treated them.

If you come out of a negotiation being aggressive, with you beating them up one day and beginning to work with them the next it’s counter-intuitive.

Finally, implement your deal and continue to work with key suppliers, forever looking for ideas and innovation that lead to improvements for you both. Remember it is a Win Win solution we want. Have mutual respect for each other

Friday, August 7, 2009

Is Supply Chain Risk Analysis a Waste of Time?

I hear that the China needs to maintain economic growth of 8% to stem widespread social unrest. Unrest! Yes! Listen to this:

When the state-owned Tonghua Iron & Steel was sold to a private group recently, 30,000 staff rioted in protest believing that the sale would lead to significant job losses.

The protests and subsequent riots led to the death of the steel factory's manager, Chen Goujun, who was beaten and later died in hospital. This is bad enough, but it comes on top of much more serious riots betwen Uighurs and Han Chinese over the labour problems at a Guandong province factory which led to more than 200 deaths. (See:

So what has this to do with supply risk?

A pharmaceutical CPO said that he saw detailed risk assessment as a waste of scarce resources. He would much rather spend the time and effort on putting in place back up plans. His reasoning? That the only certainty is that a supplier somewhere will go to the wall - which particular one isn't the important issue.

The important issue is to ensure that the company has back up plans and strategies in place. On the one hand, a consumer goods company had compiled a detailed risk assessment on every single one of its suppliers, including potential risk and alternative suppliers.

It stoked a huge amount of debate, and has proved to be one of the most popular threads on the Procurement Leaders Blog.

Now if you are dealing with a Chinese (or any other for that matter) supplier and you did not worry about what was happening with and all of a sudden your order is late. What are you going to do? The choice is yours? Do you keep abreast of what is happening WHERE YOUR MAIN SUPPLIERS ARE? You should, this is part of your risk.

Wednesday, May 27, 2009

Watch Out for Counterfeiting!

(Summary of an article in eSpeak of ISM)

Shocking statistics:
· The FBI estimates that counterfeiting and piracy of intellectual property (IP) amounts to as much as US$250 billion a year. And, according to the World Customs Organization, that figure could reach as high as US$600 billion in lost sales every year.
· Counterfeiting and piracy have resulted in the loss of 750,000 jobs in the United States, according to the U.S. Customs and Border Protection Agency.
· If counterfeiting of auto parts was eliminated, the U.S. Federal Trade Commission estimates the auto industry could hire 250,000 additional workers.
· The U.S. Department of Commerce identified more than 9,000 incidents of counterfeit electronic parts in 2008.
Among the most surprising findings was a preponderance of counterfeit electronic parts incidents in the $1.01 to $10 range, followed closely by parts in the $11 to $100 range. This indicated counterfeit electronic components were showing up in small-ticket items rather than expensive parts, such as microprocessors.
According to the OET, in 2008, 50 percent of counterfeit electronic components were bought from brokers (30 percent) and unauthorized distributors (20 percent). The remaining 50 percent came from more than 13 other sources, with no single source accounting for more than 7 percent.

Action Plan:

Good supply management practice dictates buying from authorized sources:

· Assess the seller's reputation.- Does he honor warranties Does he provide technical and customer support? Even if a seller seems reputable, do you know how reputable everyone else is in its supply chain?
· Determine the seller's financial stability. Does he have sufficient financial resources to honor refunds?
· Practice quality control. Does the seller have quality control and authenticity procedures in place? particularly with regard to functionality, proper handling and storage, chemical composition and so on. Also be skeptical of random-sample testing because counterfeiters frequently “salt” genuine product with counterfeits.
· Determine the product's traceability. Can it trace the product's route back to the original manufacturer?
· Ask for documentation. Can the seller provide documentation regarding product compliance with all laws?
· Assess legal liability. Will the seller assume product liability for penalties? Remember, buying from sources not authorized by the manufacturer might absolve that manufacturer from legal liability, even if the product is genuine. And, if the product is counterfeit, there is no manufacturer liability.


The best way to avoid counterfeiting risk is to buy exclusively from authorized sellers or resellers — either purchasing directly from the manufacturer or from a distributor or reseller contractually authorized by the product's manufacturer

Sunday, May 24, 2009

China No Longer Worth it?

Who says? AMR Research’s newest quarterly report suggests companies seeking to build or enhance outsourcing operations may to be dropping out of China, citing high risk that is no longer worth the reward.
According to the survey, manufacturers are 2-3 times more likely to decrease sourcing in China. The survey found China contributes the most risk in 12 out of 15 categories. At the top of the list is Intellectual Property(IP) infringement, with 59 percent of respondents complaining that China poses the highest risk in the world for outsourcing. 55 percent of respondents saying China poses the most risk worldwide for product quality.
Now that oil is no longer selling at $150 a barrel, manufacturers are going back to what they used to worry about. “Supplier failure is an inherent problem in all supply chains,” she said.

Do you believe this or not? I have always believed this and predict that manufacturing jobs will return to NA.

Wednesday, April 15, 2009

Managing Supply Chain Risk

Taken from

Saturday, April 4, 2009

What is Our Carbon Footprint?

A carbon footprint is a measure of the impact our activities have on the environment, and in particular climate change. It relates to the amount of greenhouse gases produced in our day-to-day lives through burning fossil fuels for electricity, heating and transportation etc. The carbon footprint is a measurement of all greenhouse gases we individually produce and has units of tonnes (or kg) of carbon dioxide equivalent.

The pie chart above shows the main elements whichmake up the total of an typical person's carbon footprint in the developed world.

A carbon footprint is made up of the sum of two parts, the primary footprint (shown by the green slices of the pie chart) and the secondary footprint (shown as the yellow slices).

1. The primary footprint is a measure of our direct emissions of CO2 from the burning of fossil fuels including domestic energy consumption and transportation (e.g. car and plane). We have direct control of these.

2. The secondary footprint is a measure of the indirect CO2 emissions from the whole lifecycle of products we use - those associated with their manufacture and eventual breakdown. To put it very simply – the more we buy the more emissions will be caused on our behalf.

Tuesday, March 10, 2009

The Focus of the S&OP in These Troubled Times

While the basic format of the S&OP process—that of running periodic, multi-functional planning meetings—should not change, the areas of discussion and focus should, in order to consider increased supply-demand uncertainties. In this regard, in this regard wthere are five pieces of advice to help forecast and plan with these increased risks:

Since new products and promotions are instituted to gain market share, there is a need for better forecast and planning the supply needed to make them successful. Planners need to communicate more effectively with Sales and Marketing. These promotions and new product launches must be closely monitored to ensure adequate supply.

One must be quick to detect changes in consumption. A change in consumption might come and go before it is detected if one is looking at shipment data alone. We need to better understand the impact of economic volatility on demand. Planners then need to stay abreast of what is going on in the economy to project future impacts.

Minimizing demand uncertainties by focusing on the customer, channel, and product segments that most contribute to revenues and profitability. Leverage formal risk management techniques as supply-demand risks increase. Wemust move away from the use of point forecasting to range forecasting and scenario planning to better recognize demand uncertainties.

Supply planners will need this level of recognition to mitigate risks via the implementation of hedging, buffering, and multi-sourcing strategies aimed at ensuring reliable supply.

The process of S&OP meetings should remain the same, planners can gain from following the above advice during these turbulent times. Companies that focus their S&OP in this way stand a good chance of making it over that last big wave on the way to calmer economic waters—meanwhile, their competitors that don't, might not.

Tuesday, February 10, 2009

The latest Supply Risk

The Forecast Just Got Worse

Report from Standard &Poors dated Feb 5, 2009

"We expect the speculative-grade default rate to escalate to a mean forecast of 13.9% by December 2009, but it could reach as high as 18.5% if economic conditions are worse than expected.”

What does this mean for the supply chain?

Default rates are a leading indicator for business bankruptcies. Supply managers should take measures to detect risk of supplier bankruptcies, disruptions and quality issues in the coming 12 months as the recession takes hold. The question is: Which suppliers are most at risk. How can you find out whether your suppliers are really at risk of financial ruin? What are the tools available to you?


  • Audit the financial, operational, and balance of trade exposure of your most strategic or critical suppliers.
  • Look for early warning signs. Drops in quality or shipment delays can be indications that the supplier has cut into its operations. Requests for early payment or changes in support personnel should also raise a red flag.
  • Increase the frequency of supplier performance reviews. Do regular performance reviews with suppliers. In the face of highly volatile markets where credit is tight, you should step up these reviews to at least quarterly with your most strategic suppliers and semi-annually with your next tier of suppliers.
  • Pay close attention to the balance of trade and the underlying market for the materials that comprise inputs into your suppliers’ products. These reviews serve as an opportunity to identify additional cost and waste.
  • Automate your supplier management process. Do this by leveraging supplier management tools that combine self-service portal for suppliers to publish and manage their own profile information ; score carding and performance KPI’s, such can improve visibility and control of risk and enable you to extend supplier management to a broader portion of your supply base.

Tuesday, January 13, 2009

Key Atributes to an Effective Sypply Chain

This may be of interest to individuals who are not sure just what is required to have an effective supply chain:

Transparency - Supply chain processes and procedures should be transparent to all stakeholders. The higher the visibility, the easier it is to identify problems in the system.

Speed – Determine the speed of each process and procedure in the supply chain and assess how to improve on it. Benchmarking can play an important role here.

Collaboration - Sharing of information and key learning's among supply chain partners can drastically improve your supply chain.

Trust - Sharing of information and knowledge will lead to improved partnerships and trust.

Consumer orientated - The needs of the consumer should always be the focus point of any supply chain system.

Flexibility - A rigid supply chain system can not respond to market changes.

Variability - A one size fits all solution is highly unlikely to work for all channels and customers segments.

Ongoing assessment - Supply chains are not static. Trends need to be evaluated regularly.

Patience - Newly implemented systems require a patient approach as changes are unlikely to yield immediate results.

Risk. - We must understand what WILL . happen if we have a broken link and decide BEFOR what our course of action will be>

Thursday, January 8, 2009

LEAN Manufacturing

What Does It Mean?

Lean manufacturing is simply about removing wastes, those activities and processes that don't add to a product's value. In practice, as businesses find the next better way to do things, helping them to improve profitability or reduce prices, what they are actually finding are ways to remove wastes.

It seems to us that increasing numbers of businesses are understanding and enthusiastically embracing the tools and techniques of Lean manufacturing. More importantly, they're making it work for them and their customers. Some may risk having to play Lean catch-up just to stay in business.

Lean manufacturing is underpinned by 5 principles:

- Specify what creates value from the customers perspective
- Identify all the steps along the process chain
- Make those processes flow
- Make only what is pulled by the customer
- Strive for perfection by continually removing wastes

The main driver for Lean is to compress the time period from customer order to payment.

The way that this is achieved is by identifying and eliminating waste. In a conventional supply chain and in individual businesses, there are potentially huge amounts of different wastes, known as The 7 Wastes: