Purchasing articles from February 2007

Purchasing archives from February 2007

Procter & Gamble puts a new spin on global chemicals sourcing.
February 15, 2007... By David Hannon Consumer products giant investigates new chemicals supply markets in an era of high energy costs. Global sourcing strategies for chemicals have taken a dramatic turn in the past two years as spiraling energy costs in...

Aromatics prices stay high despite big declines in crude oil.
February 15, 2007... By Gordon Graff Even though crude oil prices are down steeply from their mid-2006 highs, tags of petroleum-derived aromatic chemicals have dropped only marginally (see chart). One reason that aromatics have stayed high is that substantial...

Business Intelligence.(price hikes for inorganic chemicals predicted)(Survey)(Brief article)
February 15, 2007... By Staff 25% Buyers reporting price hikes for inorganic chemicals Source: www.purchasingdata.com WHAT THIS MEANS: That's a 4-point decline from Purchasing's survey a month earlier, indicating that inorganic prices are...

Cheaper gasoline drives down fuel-grade ethanol prices.
February 15, 2007... By Gordon Graff Ethanol prices have continued on a downward course since reaching record highs in the middle of 2006 (see chart) as demand continues to boom in the U.S. Analysts attribute the price trend largely to falling gasoline...

Purchasing drives success for Con-way.(Mitch Plaat appointed at Con-Way Logistics)
February 15, 2007... By Nancy Hitchcock Mitch Plaat tells of challenges, opportunities and successes he's experienced in his first year at the helm of the purchasing operation at logistics giant Con-way. It's been one year since Con-way, the freight...

Buyers look for value from electronics distributors.
February 15, 2007... By James Carbone Electronics buyers who purchase components from distributors, but don't insist on services such as distributor managed inventory, tape and reeling, special packaging and labeling are leaving money on the table. ...

Business Intelligence.(Survey)(Brief article)
February 15, 2007... By Staff 35% Electronics purchasers who say business is improving Source: www.purchasingdata.com WHAT THIS MEANS: The percentage of buyers reporting improving business is shrinking, indicating weak first quarter demand. ...

More chip production outsourced.(Brief article)
February 15, 2007... By Staff OEMs are buying more integrated circuits from fabless semiconductor suppliers, according to a new report by researcher IC Insights. Fabless IC suppliers accounted for 20% of worldwide IC sales in 2006, an increase from just...

Look for DSP tags to fall.(digital signal processors )
February 15, 2007... By Staff Buyers can expect digital signal processors (DSP) prices to fall by about 4% this year as more chip production has moved to 65nm process technology resulting in more chips per wafer and greater availability. Prices will fall...

Excess chip inventory rises.(Brief article)(Statistical data)
February 15, 2007... By Staff Surplus semiconductor inventories in the global electronics supply chain rose again in the fourth quarter of 2006, but the excess stockpiles should not crimp growth in 2007, according to researcher iSuppli. Total excess chip...

APT is on the rise.(ammonium paratungstate )(Brief article)
February 15, 2007... By Staff China's new licensing system for exports of ferroalloys has boosted prices of ammonium paratungstate to the U.S. by 15% to $260 per short ton unit. China supplies more than half of APT, the tungsten raw material, to the U.S.

Bar fees brighten.(Niagara LaSalle Corp.)(Brief article)
February 15, 2007... By Staff After falling by more than $140/ton in the second half of last year, scrap surcharges on specialty carbon "bright bars" produced by Niagara LaSalle are up $17/ton for January deliveries. Bright bars are manganese-molybdenum carbon...

Silver prices up.(Brief article)
February 15, 2007... By Staff Investors rather than buyers pushed world silver prices up 59% in 2006 to $11.55/troy ounce from $7.28 in 2005. Analysts worldwide polled by the Reuters see investors continuing their love affair with silver this year, pushing the...

OSB is cheap.(oriented strand board )(Brief article)
February 15, 2007... By Staff Purchasing of oriented strand board (OSB) is extremely soft. That's why OSB sold in January in the North Central U.S. at $154/1,000 sq ft, as compared with the peak of $411 in October 2005. Market analyses of key supply regions...

Platinum prices may drop.(Brief article)
February 15, 2007... By Staff Platinum will be slightly cheaper in 2007 than it was last year, based on the latest Reuters poll of 42 analysts worldwide. The analysts polled predict a 1% drop to $1,125/troy ounce from $1,138 last year.

CHIP ASPS decline.(Brief article)
February 15, 2007... By Staff In 2006, the market for microprocessors shrank to $33.4 billion from $35 billion in 2005, even as chipmakers sold 10% more units, according to data from IC Insights. The average selling prices for chips fell more than $10 to...

Gold bugs are here.(Brief article)
February 15, 2007... By Staff Merrill Lynch & Co. predicts the gold price will average $675/oz in 2007, up from $644 in 2006. Meanwhile, London-based research house GFMS predicts gold will range from $600 to $680 in the first half of this year--and wouldn't be...

Magnesium price rises.(Brief article)
February 15, 2007... By Staff Die casters that buy secondary magnesium in the spot market are complaining about lengthening leadtimes and rising prices. Magnesium-alloy prices have increased by about a dime lately to around $1.40/lb.

PVC prices slip.(polyvinyl chloride )(Brief article)
February 15, 2007... By Staff Downward adjustments for polyvinyl chloride (PVC) to 60Ao/lb (for general purpose grade) were prompted mainly by seasonal lackluster demand and the slipping feedstock costs. Buyers also say they been staying away from the market...

Inflation may rise.(Brief article)
February 15, 2007... By Staff Look for a slight easing of inflation this year, say economists polled by the Kiplinger Letter, an economic newsletter. The mavens see a 2.2% rise in the Consumer Price Index, measuring from December to December, vs. 2.5% in the...

DSP tags set to fall.(digital signal processors)(Brief article)
February 15, 2007... By Staff Look for prices of digital signal processors to slip by about 4% this year. DSP makers are switching production to 65 nanometer process technology resultingin more chips per wafer. Researcher Forward Concepts sees the average...

STB rules on fuel surcharges.(surface transportation board)(Brief article)
February 15, 2007... By Staff The surface transportation Board issued a final rule in January, saying it was unreasonable for railroads to calculate fuel surcharges as a percentage of base rate. The ruling also put down the practice of Cydouble dipping,' or...

Newsprint contracts extended.(Brief article)
February 15, 2007... By Staff Six-month fixed-price deals have replaced monthly newsprint purchases for one-third of the market, reports analyst Kevin Mason at Equity Research Associates. He forecasts that 45% of newsprint buys in the U.S. and Canada soon will...

Aluminum price uncertain.(Brief article)
February 15, 2007... By Staff Analysts and mill executives put the 2007 price outlook in a range from 95Ao/lb to $1.35, indicating analysts predict anywhere from a roughly 17% drop to a 20% gain from last year's average price of $1.16. The bears point to...

Foundries to see 1Q price dip.(Brief article)
February 15, 2007... By Staff Contract chipmakers in Asia including UMC and Chartered Semiconductor may see a drop in first-quarter prices, according to one industry analyst. "In general, foundry makers will suffer from slow demand and lower ASP (average...

Transportation, energy costs are top buyer concerns.
February 15, 2007... By Staff (Buyers' 90-day price expectations) [TABLE OMITTED]

GDP to grow, sort of.(Brief article)
February 15, 2007... By Staff The economic outlook is positive, says Deputy Treasury Secretary Robert Kimmitt--who pins this forecast on projected improved construction and creation and expected moderate inflation. Still, seeing that manufacturing activity is...

Flash plant delayed.(Brief article)
February 15, 2007... By Staff Toshiba Corp. may postpone constructing a new flash memory plant until 2008 or later because of a deteriorating market environment and excess supply, reports the Nikkei News Service in Japan. Construction had been scheduled to...

PC sales grow 9.5%.(Brief article)
February 15, 2007... By Staff World sales of personal computers increased 9.5% to 239 million units in 2006, fueled primarily by a boom in Asia. According to Gartner Inc., domestic PC shipments grew a mere 1.2% to 61.1 million units because of market...

DRAM sales may dip.(dynamic random access memory )(Brief article)
February 15, 2007... By Staff The global dynamic random access memory (DRAM) semiconductor industry could keep dropping through the second quarter, says Elpida Memory's president, Yukio Sakamoto. He blames the slow start-up of the Windows Vista operating...

Cat sees slippage.(Caterpillar Inc.)(Brief article)
February 15, 2007... By Staff CEO Jim Owens says heavy equipment maker Caterpillar expects a sales slowdown for its machinery and on-highway truck engines in North America. This outlook matches that of analyst John Kearney at Morningstar, who believes a...

RFID growth strong.(radio frequency identification)(Industry overview)(Brief article)
February 15, 2007... By Staff Global market for RFID (radio frequency identification) systems exceeded $2.3 billion in 2006, with hardware accounting for 59% of the total market, reports researcher Venture Development Corp. VDC anticipates nearly 35% growth...

Alumina threatened.(Brief article)
February 15, 2007... By Staff A strike in the republic of Guinea could erase a global glut of alumina needed to make aluminum. Guinea mines 15 million metric tons of bauxite annually that is refined in the U.S., Canada, Australia and Western Europe into eight...

Durables on the rise.(Brief article)
February 15, 2007... By Staff New durable goods orders in 2006 rose 7% over 2005, marking the third straight annual gain. Shipments for the full year increased 5.6%, also the third straight annual gain. Orders for these items intended to last three years or...

Construction plateaus.(Brief article)
February 15, 2007... By Staff New construction starts in 2006 were "essentially the same dollar amount as 2005," says McGraw-Hill Construction. This marks a change from the double-digit growth of 2004 and 2005, when the value of new construction starts rose by...

Housing has tanked.(Brief article)
February 15, 2007... By Staff New home sales fell in 2006 by the largest amount in 16 years at 1.06 million units, down 17.3% from 2005. That marks the biggest decline since a 17.8% plunge in the housing downturn of 1990. Meanwhile, the National Association of...

Hafnium replacing silicon.(Brief article)
February 15, 2007... By Staff Intel and IBM plan to use a substance called hafnium to replace silicon in several key parts of semiconductors. Researchers said the competing breakthroughs from the two firms should, at least for several years, silence doubts...

Chip stockpiles rise.(Brief article)
February 15, 2007... By Staff Excess semiconductor inventories closed 2006 at $4.3 billion, up 4.9% from $4.1 billion at the end of the third quarter. According to researcher iSuppli, chip suppliers have experienced slowing orders for semiconductors for 3G...

GE buys long term.(GE Aviation )(Brief article)
February 15, 2007... By Staff Allegheny Technologies' Allvac unit will supply GE Aviation with $2 billion worth of premium titanium, nickel-based superalloys and vacuum-melted specialty alloys under a new long-term sourcing agreement for the period 2007 to...

Cell phones healthy.(Brief article)
February 15, 2007... By Staff Global sales of mobile telephones are expected to grow by as much as 20% to 1.2 billion units in 2007, up from about 1 billion units sold last year. "We are optimistic on the growth momentum of low-priced mobile phones," forecasts...

Fabricated metals purchasing is perking up.
February 15, 2007... By Staff (Buyers' near-term buying plans) [TABLE OMITTED]

Leadtimes stretch.(Brief article)
February 15, 2007... By Staff Leadtimes for 37 of 41 electronic components tracked monthly by Purchasing stretched in January. For instance, multilayer printed circuit delivery times went out from 6.5 weeks in December to 10.6 weeks in January...

LTL demand dip impacts rates as carriers focus on operations.
February 15, 2007... By David Hannon Demand for less-than-truckload (LTL) service saw a definite decline in late 2006, leading carriers to focus on streamlining operations to keep costs low while buyers are taking the opportunity to negotiate better rates with...

Business intelligence.(Brief article)
February 15, 2007... By Staff 1.2% Increase in U.S. rail carloads in 2006 Source: Association of American Railroads WHAT THIS MEANS: It was a record year in 2006 for rail carriers, with U.S. railroads carrying more carloads than ever before....

Detours.(Ocean Carriers Inc. predicts market demand to increase)(Zebra Technologies Corp. acquires WhereNet Corp.)
February 15, 2007... By Staff Freight futures trading on the upswing Staff A recent story in the Wall Street Journal pointed out that trading of ocean freight derivatives or futures is increasing dramatically as freight rates become more volatile....

Disagreement reigns on steel price, supply.
February 15, 2007... By Tom Stundza Mills predict price hikes soon. Buyers reject that view, saying that weak demand won't recover for some months to come. Steel producers in the fourth quarter wrestled with falling prices, high supply levels and weaker...

Advantage: Buyers. But, for how long remains uncertain.
February 15, 2007... By Tom Stundza With double-digit growth in purchasing for all of 2005 and most of last year, steel rod and bar was a seller's market--until last October, when buyers stopped buying because of reduced fourth quarter construction and...

Steel output increases 9% in 2006 to new high.(Brief article)(Statistical data)
February 15, 2007... By Staff World crude steel output reached 1.24 billion metric tons in 2006, an increase of 8.8% over 2005, according to the Brussels-based International Iron and Steel Institute (IISI). The 2006 total represents the highest level of crude...

Timken and Daido to develop special bar plant.(Daido Steel Company Ltd.)(Brief article)
February 15, 2007... By Staff High-performance alloy steel maker Timken will spend $60 million and team up with Daido Steel of Japan to increase its capacity to produce high-tolerance SBQ (special bar quality) mill products for the auto market, including...

Business Iintelligence.(prices for copper, aluminium and gold forecasted)(Brief article)
February 15, 2007... By Staff $3.75/lb New aluminum premium Source: Platt's Metals Week WHAT THIS MEANS: The new primary aluminum premium has risen by half a cent to 3.75¢/lb (which is added to the London Metal Exchange cash price) to...

Metals Chips.(International Aluminum of Monterey)(Genstar Capital)(Brief article)
February 15, 2007... By Staff Aluminum extruder International Aluminum of Monterey Park, Calif., is being acquired by San Francisco-based Genstar Capital, a private equity firm. The Alro Metals steel and nonferrous service center chain in Jackson, Mich.,...

Copper prices will slip, but not collapse in 2007.
February 15, 2007... By Staff Two-thirds of the buyers polled in January by Purchasing projected flat-to-down copper pricing ahead, and a group of analysts and economists agree that prices will slide this year off the peaks of 2006. The mavens believe that...

Alcoa execs see strong mill demand in 2007.
February 15, 2007... By Staff Overall demand for aluminum should stay strong in 2007, pushed ahead by the aerospace purchasing, according to executives at Alcoa, the world's biggest aluminum producer. Alcoa's CFO, Chuck McLane, told analysts on a conference...

Together suppliers generate success for ITC Transmission.(Company overview)
February 15, 2007... By Susan Avery ITC Transmission knows it can count on its suppliers. When a strong thunderstorm knocked down 16 85-ft. wooden poles in one of the regions in southeastern Michigan where it transmits high-voltage electricity, ITC...

Business Intelligence.(Brief article)
February 15, 2007... By Staff $11,976 Difference in salary between average buyers and those with MRO responsibility Source: Purchasing 's 2006 salary survey WHAT THIS MEANS: As the MRO buy becomes more important to a company strategically,...

New website features exclusive salary data for MRO purchasing professionals.(maintenance, repair and operations)(Brief article)
February 15, 2007... By Staff Purchasing and 3M MRO have launched a new website for buyers who source maintenance, repair and operations (MRO) goods and services called MRO Solutions Zone (http://www.purchasing/msz.com .) The website features articles...

PLM breaks down silos. That"s why you need it.(product lifecycle management)(Editorial)
February 15, 2007... By Paul Teague, Editor in Chief You've heard of ERP (enterprise resource management), SCM (supply chain management) and SRM (supplier relationship management). Here is another set of letters that you need to know and use: PLM (product...

Dow leverages vendor-managed inventory for office supplies.
February 15, 2007... By Maria Varmazis Stick with what works, says Tary Schumacher, global supply manager, shared services purchasing at Midland, Mich.-based Dow Chemical. And when it comes to buying office supplies at Dow Chemical, supplier-managed inventory...

Business Intelligence.
February 15, 2007... By Staff $10B Office product market in India Source: Staples WHAT THIS MEANS: Staples' just-announced partnership with Mumbai, India-based Pantaloon Retail officially enters the Framingham, Mass.-based retailer into the...

Office product briefs.(Brief article)
February 15, 2007... By Staff In early January, Canon announced the release of the DR-4010C scanner (pictured), which can scan up to 84 images per minute and 42 pages per minute. The company anticipates further growth in the popularity of document scanners,...

Polaris points to purchasing for design help.(Polaris Industries Inc.)(Company overview)
February 15, 2007... By Susan Avery At Polaris, purchasing collaborates with engineering and suppliers on product teams. They're looking for ways to build better products. Purchasing, engineering and suppliers are working more closely together at Polaris...

China RoHS demands more from buyers.(Restriction of Hazardous Substances)
February 15, 2007... By James Carbone China's Restriction of Hazardous Substances law will require suppliers to provide accurate test results of components and materials to buyers to ensure compliance. Electronics buyers who think their companies' products...

Technology firm minimizes supplier risk in global sourcing.(Company overview)
February 15, 2007... By David Hannon For a long time, scientific instrumentation firm Waters Corp. in Milford, Mass. kept its supply chain short--as much under one roof as possible, in fact. For many years, the company did its own manufacturing including...

Coors Brewing continues on procurement transformation path.
February 15, 2007... By William Atkinson Through the 1990s, Coors Brewing Co. of Golden, Colo., like so many other consumer packaged goods companies, hadn't placed a lot of focus on procurement and supply management as a key business driver. Companies were...

Business Intelligence.
February 15, 2007... By Staff 53% Buyers expecting to increase purchases in next quarter Source: www.purchasingdata.com WHAT THIS MEANS: That's an increase from the 45% that planned to increase buying in the previous month, indicating that...

Newmont Mining digs up master plan for global procurement overhaul.
February 15, 2007... By William Aktinson These days, it's a tight supply market in the mining business. Mines are being strained to capacity because of burgeoning demands for raw materials around the world, especially from China and India. The mining supply...

Business in Vietnam defies misconceptions.
February 15, 2007... By David Hannon WTO acceptance is the latest stride towards Vietnam's becoming a major Asian supply source. Whatever you think you know about business in Vietnam, forget it. The economic and business environment in today's Vietnam...

Outsourcing report gets reaction.(Letter to the editor)
February 15, 2007... By Staff Firing back on outsourcing Regarding "Billions to be saved by off-shoring procurement" (Purchasing , December 14, 2006, p. 21), Have you ever called customer service at Dell Computers? Their customer service function is...