Procure IQ

Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.) In our last post we discussed the undervaluation of the yuan, introduced the Purchasing Power Parity (PPP) rate as a measure of the relative valuation of a currency, and reviewed the background behind the PPP rate. In this post, we’ll cover the determination of PPP rates, the calculations necessary to determine value against the US dollar, and list some countries with large differences between the PPP rate and the actual rate. …

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Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.) The value of the Chinese currency, the renminbi is getting a lot of attention. The renminbi is commonly called the yuan, and I’ll use that term here. Economists, lobbyists, legislators and others are all saying the yuan is undervalued. I agree with them. But undervalued compared to what? Often the answer is “compared to what it should be”. That’s really vague and circular. There is one common point of comparison, though. …

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Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.) Indranil Mukherjee / AFP-Getty Images from MSNBC Photoblog Best reader comment: “Sh@#$% ! My Porsche was in that container, I suppose I’m not going to get it by Friday ” Full story on MSNBC. Fortunately for the environment and the supply chain, this doesn’t happen often. Thanks, Dick! …

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Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.) In my last post I wrote about the loosening of the controls on the value of the yuan. Since then, the yuan has weakened about 1%. That’s one of two developments affecting China sourcing. The other, which I think will have more immediate effect, is new labor militancy among the employees of export related industries. They are realizing they are in a very strong bargaining position, because they are working for first tier …

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Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.) China announced last week that they will no longer peg the yuan to the US dollar. Instead, they are going to control the currency against a market basket of the currencies of countries they trade with. This is what Singapore did a decade or two ago. This is at best a stop gap measure. It complicates the task of the Chinese government in …

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Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.) Your supplier’s employees are committing suicide. News articles are showing up mentioning your company’s name as a major customer. Your actions are being tracked carefully. (Apple and Dell investigate Foxconn plant) Headlines like: Foxconn Makes Employees Promise Not to Kill Themselves, Plenty of Foxconn shame to go around, and Foxconn suicides: capitalism and Marxism treat men like animals cover articles that name Apple, HP, Nokia and Dell as key customers. The …

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A while back, Dick Locke, who has an entire state on his side, wrote a great post on the importance of plain English in contracts that I’m betting many of you didn’t take seriously enough. To help you understand why this is very important, here’s a short video from The Temp Life that describes what might happen if you don’t follow his advice: …

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A recent article in the April 17th Edition of The Economist in the special report on innovation in emerging markets noted how Li & Fung, a Hong Kong-based company, has long been a pioneer, working closely with a network of about 12,000 companies operating in more than 40 countries. It puts together customized supply chains from its vast network of associates and keeps an eye on quality and order fulfillment. Similarly, Dachangjian, a motocycle-maker in China’s Guangdong province, works with hundreds of parts suppliers. Specifically, it noted how these post-modern guanxi have several powerful qualities. …

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Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.) Here’s a headline supply managers don’t want to see about their own company: Alcatel Blames Parts Shortage for Steep Loss …

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Last year, David Jacoby wrote in The Economist Guide to Supply Chain Management: How getting it right boosts corporate performance that China’s high supply chain costs are limiting its growth. Noting that, as per a recent study by the US Chamber of Commerce, China’s logistics costs are the second highest in the world at 22% (compared to the global average of 13%), China is choked by the high cost of inbound logistics. With the rising cost of production in China (as more and more middle class workers demand higher salaries in their quest to maintain a middle class …

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