Purchasing articles from June 2008

Purchasing archives from June 2008

Spring price gives bounce to cost-cutting effort.
June 12, 2008... By 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 . In an effort to improve a...

Katrina: A tough teacher for the chemicals supply chain.
June 12, 2008... By Alan R. Earls When Hurricane Katrina devastated much of the Gulf Coast in 2005, supplies of chemicals, especially petrochemicals, coming out of the region ground to a halt. Fortunately, in the ensuing years, some lessons have been...

Buyers, manufacturers look for new ways to offset higher rubber costs.
June 12, 2008... By Gordon Graff Like gasoline at the pump and oil in the barrels, natural and synthetic rubber prices keep breaking through historic barriers. And most market experts say the trend will continue for the short-term, as some grades of...

Business Intelligence.
June 12, 2008... By Staff 60% Buyers expecting higher chemical prices this quarter Source: www.purchasingdata.com WHAT IT MEANS: Not surprisingly, buying plans for inorganic and organic chemicals are low, with only 18% and 15% of buyers...

Chemical buying conference comes to Boston.(Brief article)
June 12, 2008... By Staff Information to help chemical buyers and supply chain managers prepare for the 2009-2010 global economy, energy feedstocks and key chemical families will be presented at the Chemical Purchasing Summit in Boston on Sept. 17-18 at...

Correction.(Correction notice)
June 12, 2008... By Staff The annual sales for Chem One was incorrectly reported on our Top 100 Chemical Distributors list for 2008 in our May issue. The correct figure is $38.8 million.

More distributors will focus on LED lighting.
June 12, 2008... By James Carbone The economic slowdown, emerging customer segments such as solid-state lighting and the need for distributors to take a proactive role in assuring quality in the supply chain were some of the topics of discussion at this...

Suppliers to increase capacitor production.
June 12, 2008... By Gina Roos Buyers can expect relatively stable prices for capacitors despite rising materials price. Prices for commodity multilayer ceramic capacitors (MLCCs) are expected to be flat or down by about 2% in 2008 and tags will remain...

Expect lower prices, smaller packages for standard logic.
June 12, 2008... By James Carbone Buyers can expect stable to slightly declining prices for standard logic through the rest of the year as the overall economic slowdown in the semiconductor industry limits demand for standard logic. Global standard...

Business Intelligence.
June 12, 2008... By James Carbone 5% Electronics purchasers who say passive component prices are falling Source: www.purchasingdata.com WHAT IT MEANS: Higher raw materials prices are resulting in fewer price reductions for passives. 36%...

Converge seeks quality certifications worldwide.(Brief article)
June 12, 2008... By James Carbone Independent distributor Converge says it has begun a comprehensive initiative to achieve Independent Distributors of Electronics Association (IDEA) quality certifications for all its electronics distribution centers...

Electronics Briefs.(Mouser Electronics Inc. increasing its offering of PowerCon AC connectors)(Brief article)
June 12, 2008... By James Carbone Mouser Electronics has announced it is increasing its offering of PowerCon AC connectors from Neutrik, a provider of professional entertainment connector systems. In addition to the 20 amp PowerCon Connectors, Mouser...

SIA fights against bogus parts.(Semiconductor Industry Association)
June 12, 2008... By James Carbone The Semiconductor Industry Association (SIA) has released a directory of authorized distributors to help combat the growing problem of counterfeit components entering the supply chain. The directory is part of a larger...

DRAM market hits bottom; analysts predict prices will rise.(Dram Electronics)(Financial report)
June 12, 2008... By James Carbone The global DRAM market appears to have bottomed out as revenue declined 7.4% to $5.9 billion in the first quarter from $6.4 billion in the fourth quarter, according to researcher iSuppli. In addition, DRAM revenue was down...

EMS industry grew 17% in 2007.(electronic manufacturing services)(Brief article)
June 12, 2008... By James Carbone Global revenue for electronic manufacturing services (EMS) providers increased 17% to $268.1 billion, according to a new study by researcher IDC. The two largest product segments for EMS providers are computers and...

Prices.
June 12, 2008... Staff Freight, energy and metals remain the major concerns (National, recent price trends) -------------------------------------------- UP DOWN SAME INDEX Transportation 91% 1% 8% 95.4...

Copper will be Higher this Year.(Brief article)
June 12, 2008... Staff Credit Suisse raised its 2008 copper price forecast to $4/lb from $3.60 saying strikes in Chile, which account for about 40% of the global copper supply, could drive copper prices even higher this year.

Freight Costs to Rise.(Brief article)
June 12, 2008... Staff Freight rates will go up in the next five years, predicted analyst Jon Langenfeld of Robert W. Baird & Co. According to Logistics Management , Langenfeld told attendees at the National Shippers Strategic Transportation Council's...

Tin Prices Pass $11/lb.
June 12, 2008... Staff Tin prices on the London metal exchange passed $11/lb for the first time in May, driven up by production concerns in Asian markets.

Aluminum May Slip.(Brief article)
June 12, 2008... Staff Global aluminum prices are poised for a decline, suggests UBS Bank analyst John Reade. He says prices are being propped up around $1.30/lb in mid-May by speculative investment activity and the possibility of production disruptions.

Bulk Freight Rates Spike.(Brief article)
June 12, 2008... Staff Dry bulk ocean freight rates spiked to hit a new high on the Baltic Exchange's Drybulk Freight Index in late May, topping the previous high set in November. Peter Norfolk, an analyst with shipbroker Simpson, Spence & Young told...

Economy + Supply.
June 12, 2008... Staff Short-term buying plans slip even further (National, buying plans, 30-days) -------------------------------------------- UP DOWN SAME INDEX Transportation 26% 18% 56% 54.1 Energy ...

ISM Poll: Growth to come.(Institute for Supply Management forecasting about growth in manufacturing revenue)(Financial report)(Brief article)
June 12, 2008... Staff ISM's 2008 semiannual economic forecast released in May showed that 42% of the purchasing executives polled feel manufacturing revenue will grow about 9.2% this year, but nearly a third of the respondents expect a 9.3% drop in...

1Q Chip Sales Increased.(semiconductor industry)(Financial report)(Brief article)
June 12, 2008... Staff Worldwide sales of semiconductors increased 3.8% in the first quarter from the first quarter of 2007, the Semiconductor Industry Associations (SIA) reports. Chip revenue increased from $61.1 billion in the first quarter of 2007 to...

Cray to Use Intel Processors.(Cray Computer Corp.)(Brief article)
June 12, 2008... Staff Super computer manufacturer Cray will use Intel processors in its new supercomputers under a new multiyear deal. The two companies plan to explore future supercomputer component designs such as multicore processing and advanced...

Ethanol Debate Rages.(Brief article)
June 12, 2008... Staff With food prices driven up by costly corn and grain (see p. 19), some politicians have called for ethanol production to be curbed to lower corn prices. But some market participants feel politics is playing too big a role in ethanol's...

Credit Suisse: $120 Oil in '08.
June 12, 2008... Staff Credit Suisse increased its 2008 oil price forecast to $120/barrel in May, a giant leap from its previous forecast of $91, but down slightly from the $127 price it was trading at in May. Societe General also raised its price forecast...

Buyers: Business Sputtering.
June 12, 2008... Staff Buyers answering Purchasing's monthly survey say overall business is barely growing at a reading of 53.2 on an index where expansion requires a reading of 50.0. This brings the five-month 2008 business conditions index average to a...

Samsung Sees DRAM Demand.(Brief article)
June 12, 2008... Staff Samsung said it expects more than 100% growth in shipments for its dynamic random access memory (DRAM) chips this year and more than 130% growth for NAND. "The DRAM market continues to look difficult for now. We may raise prices [in...

Big Four Dominate Chipmaking.(Brief article)
June 12, 2008... Staff The big four semiconductor foundries now account for more than two-thirds of outsourced semiconductor production, according to a recent report from market researcher IC Insights. The big four include Taiwan Semiconductor...

Diesel Prices Drive Refineries.(Brief article)
June 12, 2008... Staff With demand for gasoline expected to decline and diesel prices at all-time highs, more U.S. oil refiners are increasing diesel production capacity rather than gasoline. U.S. refiners will add about 800,000 barrels of crude...

SMIC Exits DRAM Business.(Semiconductor Manufacturing International Corp. ceasing production of DRAMs )(Brief article)
June 12, 2008... Staff Semiconductor Manufacturing International Corp. (SMIC), China's biggest chip foundry by capacity, has ceased producing DRAMs and is converting its DRAM production lines to logic chip production for use in mobile phones and digital...

Gold Demand Down in 1Q.(Brief article)
June 12, 2008... Staff Global demand for gold by volume declined 16% in the first quarter, according to the World Gold Council. Demand for gold for use in jewelry fell 21% to 445.4 metric tons, the lowest quarterly level since the early 1990s. Despite the...

Potash Supply to Stay Tight.(Brief article)
June 12, 2008... Staff The head of the world's largest fertilizer producer said the already-constrained supply of potash on the global market will remain tight for the next five years. Bill Doyle, CEO of Canadian firm Potash Corp. told shareholders at the...

Auto Plants Hit the Skids.
June 12, 2008... Staff Toyota has delayed plans for a new plant in Mississippi because of the slumping U.S. economy. Originally slated to open in 2009, the plant near Tupelo now will not open until 2010. General Motors said it will close a transmission...

Zinc Prices will Shoot Up.(Brief article)
June 12, 2008... Staff World zinc prices may rebound by 50% in the next five years to $1.50/lb in 2013 as slowing growth in mine supply leads to a global shortage of refined metal used to galvanize steel. That's the view of Jim Lennon, a London-based...

Steel Up on BRICs.(Brief article)
June 12, 2008... Staff The surge in steel prices since year-end 2007 "has been driven by voracious BRIC country demand, raw materials escalation, a tight supply chain and Chinese tax changes designed to retain metal," wrote Citigroup analyst John Hill in a...

Toyota Agrees to 30% Steel.(Brief article)
June 12, 2008... Staff Even a major Japanese carmaker like Toyota can't negotiate its way out of the massive steel price increases hitting the market. According to media outlets in Japan, Toyota settled for a 30% steel price increase from its closest...

Coal Stays Up.(Brief article)
June 12, 2008... Staff World demand and tight supplies of both steam and metallurgical grades of coal have pushed prices to record-high levels, says Consol Energy's President and CEO Brett Harvey. Massey Energy said average coal prices were up more than...

DRAM Tags Fall in 1Q.(Dram Electronics)(Brief article)
June 12, 2008... Staff DRAM prices continued to fall in the first quarter despite healthy growth in bit demand. The Semiconductor Industry Association says DRAM sales declined by 37.4% year-on-year despite a 30.6% increase in unit shipments. DRAM prices...

NAND Prices Fall.(NAND flash memory)(Financial report)(Brief article)
June 12, 2008... Staff Expect prices for NAND flash memory to fall. Micron Technology says prices in March for 8Gb NAND were down 70% last year. Sales of NAND flash memory revenue grew by 45.9% in the first quarter as unit shipments that increased almost...

Hynix Pushes DRAM in 2Q.(Hynix Semiconductor Inc.)(Brief article)
June 12, 2008... Staff Chipmaker Hynix reported declines in its average prices for the first quarter but made a big push to offset them in April and May. Hynix said DRAM prices fell 16% in the quarter while NAND prices plunged 39%. As a result, Hynix...

Purchasing hot spots: Where the jobs are.
June 12, 2008... By Maria Varmazis As more companies focus on procurement as a profit driver, they look to hire purchasing pros with diverse skills and backgrounds. Here's what you need to know to land your next job. Despite the economic cool down,...

Purchasing takes a new look at distribution.
June 12, 2008... By Susan Avery As MRO purchasing responsibilities grow and change, so too does the role of the industrial distributor. Buyers now ask those suppliers for even more help with keeping costs down. Industrial distributors see it too: The...

Vesuvius makes the most of its 3PL implementation.
June 12, 2008... By David Hannon When $1.5 billion ceramics and refractory products maker Vesuvius received the results of a consultant's review of its company, there were two steps recommended specifically for the logistics organization: One, bring in a...

Business Intelligence.(transportation price increases)(fuel surcharge for air shipmen)(Brief article)
June 12, 2008... By David Hannon 91% Buyers reporting transportation price increases in May Source: www.purchasingdata.com WHAT IT MEANS: The transportation services price index hit a record high in April and again in May, driven by increased...

Railroads maintain pricing power despite lower volumes.(Report)(Brief article)
June 12, 2008... By David Hannon U.S. railroads continue to report increased pricing power despite an ever-slowing U.S. market and declining freight volumes. Kansas City Southern reported a 9.6% increase in first-quarter revenue attributable to "a...

Freight buyers renegotiate as truckers see demand slump continuing.
June 12, 2008... By David Hannon Trucking carriers reported continued weak demand and said more freight buyers are renegotiating their contracts. For example, Covenant Transportation says in its first-quarter earnings report: "Trucking capacity...

Purchasing slows as durables stall.
June 12, 2008... By Tom Stundza Lack of demand growth by manufacturing industries brings a drop in shipments of forgings and castings. But prices are still high. The crawl in capital goods manufacturing growth this year has stunted the purchasing of...

With scrap costs setting records, buyers say price spike isn't over.
June 12, 2008... By Tom Stundza The heavy steel arena is operating under a new paradigm: Demand is strong, supply is tight, costs of energy and scrap break records monthly, current transaction prices are higher than ever before and future prices could be...

Business Intelligence.(gold price increases in Toronto)(aluminum demand increases)(refined copper demand increases reports suggests)(Report)(Brief article)
June 12, 2008... By Tom Stundza $925 Realized price for gold per ounce Source: Barrick Mining WHAT IT MEANS: The world's largest gold miner in Toronto says first-quarter gold price surged (from the 2007 full-year average of $695) because...

Nippon Steel introduces new wide-flange beam to U.S.(Brief article)
June 12, 2008... By Tom Stundza Japan's Nippon Steel hopes a new type of wide-flange beam being made available in the U.S. for the first time will prove popular in the competitive North American sections market. Nippon unveiled the new Hyper Beam to...

Mill execs see 2008 as another strong year for suppliers.
June 12, 2008... By Tom Stundza The U.S. steel industry is on track to ship about 110 million net tons of steel products this year, up from almost 106 million tons in 2007. That's the word from Andrew G. Sharkey, outgoing president of the American Iron and...

LME prices are expected to ease, but full-year averages will be high.(London Metal Exchange Ltd.)
June 12, 2008... By Tom Stundza Slower demand should reduce supply worries over the balance of the year and push copper prices down around $3.29/lb late in the year from the $3.66 average through mid-May, suggests BNP Paribas analyst David Thurtell at a...

U.S. Geo Survey says the last large deposit is in Afghanistan.(Brief article)
June 12, 2008... By Tom Stundza Besides the African Copperbelt and Mongolia, the next big untapped copper deposits may be in Afghanistan, according to the U.S. Geological Survey. Based on airborne geophysical photographic surveys, sediment-hosted...

Metals Chips.(ArcelorMittal and Nippon Steel doubling production capacity)(Olympic Steel constructing a new processing-distribution facility)(Novelis expanding in sheet rolling, annealing and lacquering line)
June 12, 2008... By Tom Stundza ArcelorMittal and Nippon Steel will spend $240 million to more than double production capacity to 930,000 net tons of hot-dipped galvanized steel at the I/N Kote joint venture plant in New Carlisle, Ind. Construction of the...

World surplus expected to grow to 85,000 metric tons.
June 12, 2008... By Tom Stundza The world copper market is forecast to move into a surplus this year, and should expand in 2009, as refined copper output grows and copper demand growth rises at a slower pace, the International Copper Study Group says in a...

Alcoa gets 40% share of Vietnamese joint venture.
June 12, 2008... By Tom Stundza Vietnamese Prime Minister Nguyen Tan Dung has allowed Vinacomin, the Southeast Asian country's largest mining firm, to sell Alcoa of the U.S. a 40% stake in a joint venture to produce 600,000 metric tons of alumina a year...

Business Intelligence.
June 12, 2008... By Susan Avery $80K Median annual salary for a distribution professional Source: www.inddist.com/compensation2008 WHAT IT MEANS: The execs got a 5% raise. To compare, purchasing pros earned $84,611 on average last year,...

The spotlight is on teamwork at Stanley Supply & Services event.(Stanley Works)
June 12, 2008... By Susan Avery It's not every day that an MRO commodity manager has a chance to speak with the entire sales team of a strategic supplier. But Steve DeFord of Rockwell Collins had the opportunity recently. He was keynote speaker at the...

New p-card program provides clear picture of indirect spend.(purchasing card program)
June 12, 2008... By Susan Avery A successful product launch needs a good marketing campaign. So too does a new purchasing card program. That's the tack Tom Hardesty, vice president of procurement at The Estee Lauder Companies in New York, is taking as...

MRO Briefs.(Motion Industries getting premier supplier award from Eaton Corp.)(MSC Industrial Direct Co. launching an eco-friendly initiative, including a new line of janitorial products)(Hisco appointing Henkel as Supplier of the Year)(Brief article)
June 12, 2008... By Susan Avery Motion Industries has earned a 2007 premier supplier award from Eaton Corp. The distributor was one of 42 suppliers to receive the award based on differentiated performance and superior productivity. Eaton won Purchasing's...

The view from the top: Insight on life in the C-suite.
June 12, 2008... By Paul Teague, Editor in Chief For the four years when he was vice president of supply chain management at Cleveland-based Eaton Corp., Rick Jacobs occupied an office with a spectacular view of Lake Erie. Since last fall, he has been...

Corporate Express grows Green strategies.(Corporate Express Ltd.)
June 12, 2008... By Maria Varmazis When Green products first entered the office supply lexicon, one of the easiest changes office suppliers made was to offer recycled paper products. After all, this was something that office buyers used in large quantities...

Business Intelligence.
June 12, 2008... By Maria Varmazis $748B The amount of global IT services revenue in 2007 Source: Gartner Research WHAT IT MEANS: Despite the economic slowdown in the U.S., demand for IT services continues to grow both domestically and...

Trim the fat on IT costs.(Brief article)
June 12, 2008... By Maria Varmazis Gartner Research just published a series of reports called Cost Cutting in IT, which provides several tips for management staff to best approach IT cost savings. In light of a possible recession not just in the U.S. but...

Ten tips to preventing p-card fraud.(purchasing card )
June 12, 2008... By Maria Varmazis In late May, financial services firm JPMorgan released a new best practices report for monitoring purchasing card (or p-card) purchases for fraud. Here it is: Identify who on senior management will champion the...

RoHS cost: $32 billion and counting.(Restriction of Hazardous Substances )
June 12, 2008... By James Carbone It's not easy (or cheap) being Green. Just ask buyers at electronics companies who had to switch parts--and, sometimes suppliers--to comply with the European Union directive. When the European Union (EU) announced it...

Suppliers take center stage.(Intel Corp., Sun Microsystems Inc. and Texas Instruments Inc. recieves quality awards)
June 12, 2008... By John Day OEMs and other companies shine a spotlight on their best suppliers. The goal: recognize the best and motivate the rest. Praising suppliers for their "world-class performance" and "sustained exceptional" commitment, Intel...

EMS provider partners with distributors.(Microboard Processing Inc.)(Company overview)
June 12, 2008... By James Carbone - Microboard Processing Inc. Size: $30 million - Business: Electronics manufacturing services provider offering board assembly, prototype builds, systems assembly - Employees: 165 CEO Craig Hoekenga has bold plans...

Your role in balanced supplier relationships.
June 12, 2008... By Karen Weinstein-Millson Balanced business relationships-- those made between progressive supply management professionals and high performing suppliers-- will help build a strong foundation for the long-term success of both...

Welcome to the C-suite.(chemicals)
June 12, 2008... By David Hannon Procurement is gaining greater access to the highest levels of companies, and is making the most of it. When Tim King left the CEO's office after a quick meeting in early 2007, he wasn't sure what to think. It certainly...

Corporate-card data is a powerful tool when negotiating with travel suppliers.
June 12, 2008... By Susan Avery Travel buyers agree: Mandating that employees use a corporate card to pay for air travel, hotel rooms and rental cars is a best practice. Not only does the use of a corporate card make payment easier for employees, it also...

Business Intelligence.
June 12, 2008... By Staff 55.8 Reading for Purchasing's buying plans index in May Source: www.purchasingdata.com WHAT IT MEANS: That's a slight uptick from the 51.2 in April but still down from January levels of 59.3. Buyers are cautiously...

10 tips to better China sourcing.
June 12, 2008... By William Atkinson Everyone in the supply chain seems to have a "China story" these days. Either they found dramatic savings and saved their company a boatload of cash, or they got burned by a fly-by-night supplier and vow never to source...

Airlines increase surcharges, cut the perks.(Brief article)
June 12, 2008... By Staff As airlines continue to face skyrocketing fuel costs, many are continuing to create new surcharges or increase existing ones, while also cutting many of the perks or extras that business travelers are accustomed to. In May,...

Food buyers have trouble swallowing rising costs.
June 12, 2008... By Tom Stundza Food buyers and buyers at food-producing companies are navigating the choppy confluence of several major trends that have driven up the prices of nearly every food material and finished food product in the U.S. and around...