As the transportation industry braces its self for the start of a new year, the railroad industry seems to be in an excellent position to thrive quickly. Even though The Association of American Railroads stated that mid-December intermodal traffic continues to be down year-over-year, volumes seems to be stabilizing and even seeing a few increases. [...]
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Office equipment is expected to remain a buyer’s market for the next few quarters as a result of macroeconomic conditions, which are reducing the demand for devices such as printers, copiers, fax machines, and multi-functional devices (MFDs). These conditions have caused office equipment sales to deteriorate throughout 2008 and 2009, with no upturn anticipated [...]
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As many of you know, the Category Managers who contribute to Supply Excellence also create a quarterly report called SupplyWatch. The Q1 issue is up and includes detailed category breakdowns for…
Metals
Plastics, Rubber & Raw Materials
Transportation
Electronics, Electrical & IT Hardware
Paper & Packaging
Services & Capital Goods, Construction & Engineering
In addition, there is a feature article on Cutting [...]
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The media buying market is has moved into unfamiliar territory lately. So unfamiliar that even the granddaddy of advertising itself, The Super Bowl, has had to resort to lowering prices. The market has softened so much that for only the second time in the history of the Super Bowl, advertisers are getting a [...]
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Today the Institute for Supply Management (ISM) released their report on manufacturing activity in November. A few of the highlights:
Overall, I see these numbers as a relatively positive sign that the recovery in the manufacturing sector is continuing. Most analysts had expected the overall index (PMI) to come in around 55, but I was expecting a number closer to 50 due to the expiration of some government incentive programs such as cash for clunkers. 53.6 still indicates that the market is expanding, so people should not over-react to the drop from October to November. Furthermore, the increase in the New Orders Index and the drop in Inventories indicates that production should increase in December. I expect that December will have another index reading in excess of 53, marking the 5th consecutive month of expansion.
The one area of concern is the employment numbers. The drop to 50.8 indicates that manufacturing managers are being extremely cautious on hiring, waiting to insure that the recovery has firmly taken hold. Again, the growth in bookings should result in an increase in production in December, which should result in an improved employment picture. Look for the employment index to tick back up in December.
The Services Sector numbers are due out on Thursday, so we will report back then. The next big piece of data we are watching for manufacturing is the Fed’s report on Industrial Production and Utilization, which is due out in a few weeks.
Pat Furey is a Senior Category Manager in Ariba’s Global Sourcing Organization. Pat leads the team of global category managers covering direct materials and indirect goods and services.
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Following on the heels of his analysis of ISM’s October numbers, Pat Furey shared his team’s insights into the current state of the sourcing/procurement/category market. Pat also discussed some of the potentials risks and challenges that procurement departments are likely to encounter in the next 12 months.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
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Senior Category Manager and SupplyExcellence contributor Pat Furey shared his analysis of the October ISM data for manufacturing and services.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
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Although there are many moving parts in the equation (especially around the health care reform package making its way through the US Congress currently), health insurance premiums, which doubled in the last decade, are on track to repeat that feat over the next ten years. From 1999 to 2008, premiums increased by a reported 119%. The average employer-sponsored insurance premium in 2008 was approximately $12,300, however based on current growth rates this figure is expected to be almost $24,000 by 2020. Some experts are forecasting even steeper growth, predicting an increase in excess of 150% over the next decade. If this growth continues at its current and/or projected pace, it will place an increasingly large burden on both families and employers. Employers have traditionally paid the majority of the premiums and will face tough decisions as to whether they are willing to primarily carry the load.
With the projection of increased insurance premiums, companies will have to make tough decisions in terms of the portion of the premiums they are paying, and how much of the increases they will pass on to their employees. Based on current growth rates, it is expected that most companies will switch a larger portion of cost to employees. As these costs continue to rise, large companies will focus more closely on their benefits administration and management services.
Prudent buyers should work with their current providers to develop creative solutions and work to reduce costs, while maintaining employee satisfaction with the overall benefit program. This can either be done through sourcing efforts or direct collaboration initiatives with incumbents.
Endre Støgård is a Category Manager for Services in Ariba’s Global Services Organization (GSO). In this role he provides commodity knowledge and strategic sourcing direction for a wide range of categories within the corporate services area, including Finance, Human Resources and Travel.
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The long-awaited report from the Department of Transportation on the safety of Mexican trucks crossing the US-Mexico border stated that the Mexican trucks’ out-of-service rates were similar to those of the United States’ trucks. The report found that in 2008, 21.2% of inspections of Mexican trucks resulted in taking trucks out of service, while 21.8% of inspections of US trucks resulted in trucks being taken out of service. During those inspections, 1.2% of Mexican drivers were taken out of service, while 6.9% of US drivers were taken out of service.
One item that was highlighted in the report was the lack of consistency in reporting of traffic convictions incurred by Mexican truck drivers. Although the inspections were done in the same manner in which Canadian drivers are compared to US drivers, some groups have questioned the validity of the inspection process, since the inspections mainly took place in US-Mexico commercial zones instead of randomly throughout the US.
Earlier this year, Congress chose to end a Bush Administration sponsored test of long haul trucking between Mexico and the US. Many argued that the program needed to be ended due to safety concerns, yet this recent report would indicate that Mexican truckers are at least as safe as domestic truck drivers. This report does make one ponder the true reason for the cessation of the program…
Was it because of job protectionism? Was it due to the recession? Were there safety issues that this report doesn’t reflect?
No matter what the true reason was, it’s hard to deny the results of the DOT’s report, and the industry should be eager to see what type of program the Obama Administration intends to promote.
Rachel Rutkoski is a Senior Indirect Services Category Manager for North America in Ariba’s Global Services Organization. Rachel is recognized by the Institute for Supply Management as a Certified Professional in Supply Management (C.P.S.M.) and has several years experience as a supply chain and transportation analyst in Fortune 500 companies.
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SupplyExcellence is happy to welcome guest blogger Michael Lamoureux (aka “the doctor”), editor of the Sourcing Innovation blog,
In these tight economic times, two thoughts are are at the forefront of every buyer’s mind: Cost Reduction and Supply Assurance. Considering that the very foundations of SupplyExcellence are Cost Avoidance and Uninterrupted Supply, this is a [...]
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