Purchasing articles from December 2008

Purchasing archives from December 2008

How to ensure supply meets demand.
December 11, 2008... Staff Purchasing's smartest negotiators move from conflict to collaboration fast. Match your wits against these pros. Guess their strategy. Then, read what they really did at purchasing.com/negotiations . Among the possibilities:...

Supplier management fuels growth for Cessna.(Cessna Aircraft Co.)
December 11, 2008... By Susan Avery Cessna Aircraft Co.'s supply initiatives won the company Purchasing's Medal of Excellence in 2003. Here is a look at where those initiatives are taking the company five years later. Since receiving Purchasing 's Medal of...

Storm clouds block chemical buyers' view of the horizon.
December 11, 2008... By Rich Weissman Deteriorating economic conditions and market volatility create challenges in chemical price forecasting. When discussing their always changing weather conditions, New Englanders often say "If you don't like the weather...

Sulfuric acid price bubble bursts as demand softens.
December 11, 2008... By Gordon Graff Sulfuric acid buyers can expect declining prices in the months ahead, but also some regional tightness due to plant outages. Sulfuric acid prices that rocketed to historic highs this year have topped out and are expected to...

Business Intelligence.
December 11, 2008... Staff $660 Price (per ton) of ammonia in October Source: www.purchasingdata.com WHAT IT MEANS: That's more than double the price at the start of this year. Ammonia prices have been at record highs most of the year, but...

CMAI: Middle East capacity will push PE market to oversupply.(Polyethylene)(Brief article)
December 11, 2008... By David Hannon According to a recent analysis by CMAI, the next wave of polyethylene capacity expected to come on-stream in the Middle East and Asia between 2009 and 2012 will create global oversupply conditions. "Between 2008 and...

VeraSun files bankruptcy.(VeraSun Energy Corp.)(Brief article)
December 11, 2008... By David Hannon Call it a collision of all the worst economic trends in a single company. The second-largest ethanol producer in the U.S., VerasSun Energy Corp., filed for bankruptcy in November citing a lack of available capital due to...

ConocoPhillips delays Saudi refinery plans.
December 11, 2008... By David Hannon With so much uncertainty in global economic markets, even projects that seemed like a sure thing only a few months ago are being shelved or cancelled altogether. In early November, oil giant ConocoPhillips announced it was...

Catalog distributors enhance online offerings for buyers.
December 11, 2008... Staff Catalog electronics distributors have increased their product lines in recent years to attract new buyers and to increase business with OEMs that already purchase from them. At the same time, catalog distributors are enhancing the...

More consumer OEMs consider outsourcing electronics manufacturing.
December 11, 2008... By James Carbone Less than 15% of consumer electronics equipment is built by contract manufacturers, but that will change as consumer electronics companies look to reduce cost. Buyers involved in outsourcing decisions at consumer...

Microcontroller prices will fall despite strong demand.
December 11, 2008... By James Carbone Electronics buyers can expect prices for microcontrollers to fall about 9% over the next year, despite double-digit unit demand growth. Unit shipment growth will average about 10% per year over the next five years....

Business Intelligence.
December 11, 2008... By James Carbone 56% Buyers who say business is down compared to last month Source: www.purchasingdata.com WHAT IT MEANS: Comments from electronics buyers in Purchasing's monthly survey indicate the electronics industry is...

Electronics Briefs.(Mouser Electronics launching catalog )(distribution agreement between Avnet Inc. and ON Semiconductor)(Brief article)
December 11, 2008... By James Carbone Mouser launches European catalog Distributor Mouser Electronics announced it launched its first European catalog at the recent Electronica show in Germany. The 980-page catalogue will initially be available in English...

Fed exec tells NEDA conference economy will recover in 2009.
December 11, 2008... By James Carbone The U.S. economy suffered negative growth in the third quarter and won't recover until the second half of next year because cutbacks in consumer spending and a declining housing market, according to the vice president and...

Leadtimes for variable resistors may stretch.
December 11, 2008... By Gina Ross Buyers can expect stable pricing for variable resistors as many suppliers cut back on production capacity due to lower demand. But those cutbacks and further inventory reductions could extend leadtimes for variable resisters...

Prices.(Statistical table)(Brief article)
December 11, 2008... Staff Nearly all commodity groups take price plun- ge (National, recent price trend) -------------------------------------------- UP DOWN SAME INDEX Paper 39% 10% 51% 64.5...

EIA Cuts '09 Forecasts.(Energy Information Administration)(Brief article)
December 11, 2008... Staff Energy Information Administration has cut price forecasts for crude oil in 2009, citing lower demand in a sluggish economy. EIA sees crude oil averaging $63.50/barrel, down from $101.45 this year. Private economists are more bearish:...

Platinum Prices Plunge.(Brief article)
December 11, 2008... Staff According to a report from Johnson Matthey, platinum prices will continue to decline to $700 and $1,400 in the next six months. Macquarie Group recently cut its 2009 platinum-price forecast by 40% saying it will average $925/oz next...

Macquire Cuts Commodities.(Macquarie Bank Ltd.)(Brief article)
December 11, 2008... Staff Investment bank Macquarie cut its 2009 forecasts for a variety of commodities in November to reflect the deteriorating global economic outlook. Here's a review of the forecasts: Commodity Revised forecast...

Valve Inflation Seen.(Brief article)
December 11, 2008... Staff Industrial valve price increases will remain robust into next year despite a slowdown in global economic activity, forecasts economist Paul Robinson at Global Insight. He now expects prices to increase 6.6% in 2008 and another 5.6%...

No Rise in Corrugated.(container)(Brief article)
December 11, 2008... Staff "With demand in decline, it will be difficult to get price increases through for corrugated shipping containers for the remainder of this year and early 2009," says market analyst Tom Runiewicz at Global Insight. His view: Look for...

Lumber Has Splintered.(Brief article)
December 11, 2008... Staff After peaking around $310/1,000 cubic feet in August, prices for Western softwood 2x4 lumber have receded in recent months to less than $200. And Scotiabank economist Patricia Mohr predicts no major increase in demand from...

Economy + Supply.(Statistical table)(Brief article)
December 11, 2008... Staff Demand slump spreads to metals and equipment (Buyer's 30-day buying plans) -------------------------------------------- UP DOWN SAME INDEX Energy 14% 31% 55% 41.2 Inorganic...

Business Conditions Dive.(Brief article)
December 11, 2008... Staff Purchasing's monthly business conditions index dropped to an all-time low of 25.6 in November on an index where 50.0 and above shows growth. That's even lower than the previous low 33.0 reading during the March-November 2001...

OECD: Recession is Here.(Organization for Economic Cooperation and Development)(Brief article)
December 11, 2008... Staff The world's developed countries, hard hit by the financial crisis, have tipped into a recession that will last at least through the first half of 2009, according to the 30-nation Organization for Economic Cooperation and Development....

China's Production Slows.(Brief article)
December 11, 2008... Staff China's industrial production growth slowed sharply in October, touching a seven-year low of 8.2%. China also posted its first decline in monthly electricity output in four years. All this confirms economists' fears that the...

Producer Prices Plummet.(Brief article)
December 11, 2008... Staff The U.S. Labor Department's monthly Producer Price Index plummeted 2.8% in October, the largest monthly drop ever recorded, mostly due to the massive declines in oil and fuel prices. The core index, which measures all commodities...

Chip Demand to Fall.(Brief article)
December 11, 2008... Staff Global sales of semiconductors are likely to fall 2.2% in 2009 due to weak demand for electronics, says World Semiconductor Trade Statistics. In May it forecast growth for chipmakers of 5.8%. WSTS also forecasts sales to grow 2.5% in...

Cell Phone Sales Drop.
December 11, 2008... Staff Nokia says weak global consumer spending will weigh on cell phone demand through 2009. The world's largest mobile-phone maker expects 1.24 billion cell phones to be sold worldwide in 2008, but for 2009 it expects volumes to be below...

LCD Makers Plead Guilty.(Chunghwa Picture Tubes Ltd.)(LG Electronics Inc.)(Sharp Electronics Corp.)(Brief article)
December 11, 2008... Staff LG Display, Chunghwa Picture Tubes and Sharp will plead guilty and pay $585 million in criminal fines for conspiring to fix prices from 2001 to 2006 of LCD screens used in computers, TVs, cell phones and other electronic devices. All...

Titanium Demand Down.(Brief article)
December 11, 2008... Staff Delays in the next-generation airliner programs at Boeing and Airbus will translate into the first reduced-shipments year in 2009 for domestic titanium mills since 2003. John Mothersole at Global Insight sees domestic titanium...

Bayer Back Online in Texas.(Bayer MaterialScience L.L.C.)(Brief article)
December 11, 2008... Staff Bayer MaterialScience has lifted its force majeure at its Baytown, Texas plant. According to a statement, "there are no longer any restrictions on the company's ability to supply diphenylmethane diisocyanate (MDI) and isophorone...

Paper Makers Cut Capacity.
December 11, 2008... Staff Producers of paper products announced major capacity reductions in the fourth quarter. Boise cut pulp production at its St. Helens, Ore. plant, International Paper shut down a paper production machine at its mill in Franklin, Va.,...

Sun Sees Demand Slump.(Sun Microsystems Inc.)(Brief article)
December 11, 2008... Staff With demand for high-end servers slumping, Sun Microsystems says it will slash up to 6,000 jobs, or 18% of the global workforce. The Santa Clara, Calif.-based company plans to align its business with the global economic climate and...

IEA: New Oilfields Needed.(International Energy Agency)(Brief article)
December 11, 2008... Staff Declining production from aging oilfields poses a much greater threat to world oil supply than rising demand, according to the International Energy Agency. The IEA says "a sea change is underway (as) international oil companies are...

PC Demand Down.(personal computers)(Brief article)
December 11, 2008... Staff Personal computer firms will experience a slowdown in demand next year so they may be forced to lower average selling prices, according to analysts. Citigroup analyst Richard Gardner now expects U.S. PC sales to shrink by 10% and...

U.S. Steel Starts Layoffs.(United States Steel Corp.)(Brief article)
December 11, 2008... Staff With steel buyers on strike and demand collapsing across North America, U.S. Steel has laid off about 3% of its unionized production workers. The global economic slowdown has cut deeply into demand for the company's sheet steel used...

Copper Supply Cuts Price.(Brief article)
December 11, 2008... Staff Inventoried copper has more than doubled in the past six months, so prices have tumbled by more than half. "Fresh metal coming into warehouses because of falling demand has been pushing the price down," says analyst Patrick Chidley...

Paper Prices Down in '09.(Brief article)
December 11, 2008... Staff Goldman Sachs analyst Richard Skidmore expects demand declines across the printing-writing paper grades to continue given a further slowdown. "Although the industry has shown it will close capacity, we see the recent demand declines...

Polysilicon Prices Plunge.(Brief article)
December 11, 2008... Staff Prices for polysilicon used to create photovoltaic (PV) cells are expected to drop in 2009 says researcher iSuppli. Polysilicon prices peaked earlier this year at $500/Kg. However, the average spot market price for polysilicon is...

UBS: Commodities Down.(forecast about commodity prices by UBS AG)(Brief article)
December 11, 2008... Staff A recent report from UBS says commodity prices will be down for the next 18 months. "We find it difficult to envision that the contraction in credit availability and associated demand correction will be a short-lived process," said...

Base Metals Near Bottom.(Brief article)
December 11, 2008... Staff Basemetals.com analyst William Adams believes the nonferrous metals price slide could find a bottom early next year. But he also expects first-half 2009 demand "to remain choppy" with no clear indication of an upward movement until...

Express Shipping Rates Up.(Brief article)
December 11, 2008... Staff With the departure of DHL from the U.S. express shipping market, the annual rate hikes from the remaining providers have more bite. For the first time, the U.S. Postal Service is increasing its shipping service rates on a different...

CITI: Iron Ore to Drop 20%.(Brief article)
December 11, 2008... Staff Citigroup commodity strategists, who see a 4% decline in global steel demand in 2009, now see a 20% reduction in the price of iron ore in annual contracts. Citigroup analysts Alan Heap and Alex Tonks say in a report that "a...

Business Intelligence.
December 11, 2008... By David Hannon 3.4% Decline in UPS' 3Q domestic package volumes Source: UPS WHAT IT MEANS: According to Big Brown, air products declined 6.4% and ground volume decreased 2.8%. "Based on economic forecasts, we anticipate a...

Honeywell sees broad benefits from logistics contract management tool.
December 11, 2008... By David Hannon In many companies, the sales team and the procurement team are considered opposite ends of the supply chain with very little in common except the end goal of improving the company's bottom line. So it may be somewhat...

TomTom leverages outsourcing partners to meet increasing demand.
December 11, 2008... By David Hannon Consumer electronics upstart TomTom is in a unique position. As one of the primary players in a market--the personal navigation device market--that saw 400% growth in 2007, TomTom reported a sales increase of 579% in 2007....

UPS, FedEx issue rate increases for 2009.(Brief article)
December 11, 2008... By David Hannon Logistics giants UPS and FedEx issued their 2009 rates increases just as their market went into transition with DHL's announcement it would pull out of the U.S. express market (see story, p. 13). UPS' rates include an...

Boeing predicts long-term air freight growth after short-term turbulence.
December 11, 2008... By David Hannon Despite the current slowdown in freight demand around the world, aircraft maker Boeing's long-term forecast for the air cargo market shows continued increases in demand for the next two decades. "We've seen market...

Carriers revamp networks amid continuing trucking demand slump.
December 11, 2008... By David Hannon Call it a sign of the times: Con-way Freight, the Ann Arbor, Mich.-based less-than-truckload division of Con-way, announced in November it will close 40 service centers around the country as part of a network improvement...

Credit crunch sinks ocean freight.(Brief article)
December 11, 2008... By David Hannon Extremely low shipping rates are not very useful if shippers can't secure the lines of credit to purchase the materials and have them shipped. By mid-November, the Baltic Dry Index, which tracks dry bulk shipping...

TSA: Container cargo may drop 8% by year-end as global trade slows.(Transpacific Stabilization Agreement)
December 11, 2008... By David Hannon Just how much has demand for goods shipping in containers from Asia decreased this year? According to the Transpacific Stabilization Agreement, which represents 15 ocean carriers in the Pacific, Asia to U.S. container...

Steel bargains could be coming from Mexico.
December 11, 2008... By Tom Stundza Collapsed demand and lower prices at home at a time when supply has expanded will make more steel mill products from Mexico available for buyers in the U.S. and Canada. Steel trade between the U.S. and Mexico typically...

Prices at five-year low as demand from stainless mills collapses.
December 11, 2008... By Tom Stundza There's plenty of cheap nickel available to buyers and no sign that trend will change anytime soon. Economists now suggest that the freefall in the nickel price to $5.26/lb in early November will continue next year, with...

Business Intelligence.(Brief article)
December 11, 2008... By Tom Stundza 60% Two-month drop in ferromolybdenum prices Source: Credit Suisse WHAT IT MEANS: Steelmaking worldwide fell 30% in the third quarter, reducing purchases of iron ore, scrap and alloying materials. "The...

Metals Chips.(Russel Metals Inc. acquires Norton Metal Products Inc.)(United States Steel Corp. opens new $450 million coke plant in Sumter County)(Timken Co. opened its new $60 million small-bar steel mill in Canton, Ohio)
December 11, 2008... By Tom Stundza Russel Metals of Mississauga, Ontario, has bought Norton Metal Products , a family-owned metals service center in Fort Worth, Texas, which sells $70 million annually of merchant bars and plate to industrial manufacturing and...

RTI delays expansion as 2009 demand outlook has softened.(RTI International Metals )(Financial report)
December 11, 2008... By Tom Stundza RTI International Metals is delaying a major expansion project "in light of the current economic uncertainties and the overall short-term softening in demand for titanium." The suburban Pittsburgh-based firm initially had...

A winning MRO sourcing strategy requires communication, teamwork.
December 11, 2008... By Susan Avery At $78,542, buyers who source maintenance, repair and operations (MRO) goods and services earn about $10,000 less than the average for all respondents to Purchasing's 28th annual salary survey. The figure is low,...

Business Intelligence.
December 11, 2008... By Susan Avery $78,542 Annual salary of MRO buyers Source: Purchasing's 28th annual salary survey WHAT IT MEANS: Purchasing professionals with responsibility for sourcing such other commodities as chemicals ($96,713), metals...

MRO briefs.(NAPP 2009 annual conference for purchasing professionals)(Brief article)
December 11, 2008... By Susan Avery David Natoff, head of global supplier sourcing at Google, is among purchasing professionals presenting at the NAPP 2009 annual conference Feb. 8-11 in New Orleans. NAPP stands for purchasing and payables professionals. The...

For improvements in MRO spending, buyers need to set challenging goals.(material repair and overhaul)(Brief article)
December 11, 2008... By Susan Avery Most companies have no specific objectives for the MRO buy, says Joel Roth, president of Fulton Supply Co. in Atlanta and author of the book The 20% Solution: A Practical Guide to Dramatic Cost Reduction in MROP Procurement...

Another profitable year for purchasing professionals.(Editorial)
December 11, 2008... By Paul Teague, Editor in Chief Congratulations, readers! On average, you, as a group, have received higher raises in the last year than many of your peers in other professions. In tough economic times, executive management has recognized...

Steel manufacturer streamlines document management.
December 11, 2008... By Maria Varmazis The advent of Sarbanes-Oxley made a strong case for document management. Companies quickly learned they need to have documents ready at hand in the event of an audit. Still the entire concept of document management to...

Business Intelligence.
December 11, 2008... By Maria Varmazis 54% Medium-sized businesses surveyed that are considering an MFP Source: InfoTrends WHAT IT MEANS: Compared to large and small businesses, MFPs seem to have found their niche with medium-sized businesses...

Commoditization of print buy means easier spend consolidation.(Brief article)
December 11, 2008... By Maria Varmazis Procurement is often told to not interfere with the important day-to-day operations of print-heavy and brand-dependent departments like marketing or legal. The problem with that mentality, says Eric Belcher, president of...

Pfizer's 12 tips for reverse auction success.
December 11, 2008... By William Atkinson Pharmaceutical giant provides best practice recommendations for e-sourcing users at all levels. When it comes to online reverse auctions, some users may think their success depends solely on the technology. But not...

Purchasing raises beat the averages.(Survey)
December 11, 2008... By Susan Avery Compensation is up again. It's another strong indication of the growing importance of the purchasing profession. Companies are paying top dollar to purchasing professionals who can impact the business--even in a...

Make business leaders strategic-sourcing partners.
December 11, 2008... By Lara Nichols What comes to mind when you think about your company's approach to strategic sourcing? Spend analysis? Tools? Processes? Savings targets? Who comes to mind when you think about the development of your company's strategic...

Procurement takes lead at setting sourcing strategy for marketing events at Microsoft.
December 11, 2008... By Susan Avery Marketing events for more than 10,000 people are not unusual at a company the size of Microsoft Corp. Think Tech-Ed. The software giant also holds events of this scale for employees, the biggest being Microsoft Global...

The ground transportation spend provides procurement more opportunity to reduce costs.
December 11, 2008... By Susan Avery With the slower economy and cutbacks in capacity by the airlines, demand for rental cars and black car limo service is starting to fall. At the same time, suppliers are coping with higher operating costs (such as trying to...

Sonoco leverages SRM techniques to build procurement team.(Sonoco Products Co.)(supplier relationship management)
December 11, 2008... By William Atkinson One of the most important functions of a supply management organization is to develop long-term, productive relationships with suppliers. For Marc Ensign, director of strategic sourcing, international procurement and...

Business Intelligence.
December 11, 2008... Staff 10% Buyers that said business was better in November than October Source: www.purchasingdata.com WHAT IT MEANS: Business conditions do not look good for the first quarter of 2009. And buyers are likely going to be front...

Banks tighten credit evenfurther in 3Q.(Survey)(Brief article)
December 11, 2008... By David Hannon A tight credit market got much tighter in the third quarter, according to a quarterly survey from the Federal Reserve. The Fed's quarterly survey of 55 banks' lending practices, conducted in the first two weeks of...

DHL to exit U.S. express shipping market.(DHL Corp.)
December 11, 2008... By David Hannon Logistics buyers take note: the small parcel market just got a lot less competitive. Logistics provider DHL announced in November it plans to exit the ground and air express markets in the U.S. and focus its remaining U.S....

Domestic air fares hit record highs in 2Q.(Bureau of Transportation Statistics)(Report)(Brief article)
December 11, 2008... By David Hannon If you think that business trip in June cost more than it normally should, you're probably right. Data from the Bureau of Transportation Statistics (BTS) released in October shows that domestic air fares in the second...

Government program provides Lean and Green supplier assessments.
December 11, 2008... By William Atkinson For years, manufacturers have been trying to get their suppliers to operate more Lean, in order to achieve cost savings and efficiency improvements from which all parties could benefit. More recently, the effort has...

Logistics merger activity slows in 3Q.(Brief article)
December 11, 2008... Staff The level of mergers and acquisitions in the logistics industry slowed in the third-quarter and with credit markets tightening even further, the fourth-quarter is not expected to see as many. According to a quarterly report...