Purchasing articles from March 2009

Purchasing archives from March 2009

How to get more value from a machine builder.
March 12, 2009... 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. A major metal forming company...

Reverse auctions provide good chemistry for Shell.
March 12, 2009... By Alan R. Earls At Royal Dutch Shell, reverse auctions are a key tool in managing the commodity chemicals spend. Over the past decade, online reverse auctions have been tested and, for many organizations, have proven their value. For...

Caustic soda prices set to retreat as chlorine prices bottom out.
March 12, 2009... By Gordon Graff In terms of caustic soda prices, last year was one for the record books, with average caustic prices roughly doubling in 2008 due to robust demand and tight supply. But over the past few months, demand for caustic has...

Business Intelligence.
March 12, 2009... By Staff 2% Buyers planning to build chemical inventories this month Source: www.purchasingdata.com WHAT IT MEANS: While that percentage indicates demand for new chemicals buying activity is extremely low, it's not just...

Expert favors ROAs over reverse auctions.(reverse options auctions)(Brief article)
March 12, 2009... By Alan Earls While some chemical firms have embraced reverse auctions (see "Reverse auctions provide good chemistry for Shell "), there are certainly those who question their value. David Field, managing director of Ascendant Consulting...

Soda ash prices spike.
March 12, 2009... By David Hannon Soda ash prices spiked nearly $30/ton in January, as its demand increases for its use as a less expensive substitute for caustic soda during contract negotiation time. According to Purchasingdata.com, soda ash prices...

Sagging ethanol prices to firm up as producer shakeout continues.
March 12, 2009... By Gordon Graff The ethanol industry, plagued by slow demand, depressed pricing and negative margins, may be in for a modest revival this year, bringing price increases and supply tightness. That's the outlook from market watchers, who say...

Agriculture Department to help suffering ethanol suppliers.(Brief article)
March 12, 2009... By David Hannon While suppliers in a variety of markets struggle, ethanol producers have perhaps been harder hit than most--hit by volatile corn prices wreaking havoc on balance sheets, hit by declining ethanol and gasoline prices, hit by...

9 hidden costs of global sourcing.
March 12, 2009... By David Hannon Global sourcing is cheap, but it isn't free. Make sure you factor these costs into your total cost analysis to ensure a fast and accurate ROI. Devising and executing a successful global sourcing strategy may be the...

OEMs look for distributor design help.(original equipment manufacturer)
March 12, 2009... By James Carbone The Mantra of show business is the show must go on. The same thinking can be applied to the electronics industry where the belief is new product introduction must continue even during a recession. While many...

News flash: Cost isn't always Number One.(Cisco Systems Inc.)
March 12, 2009... By James Carbone Sometimes, especially with a new product to serve new markets, buyers used to focusing closely on price find they are analyzing other supplier attributes. That was the case with Cisco Systems' $340,000 TelePresence meeting...

Switch prices will fall; leadtimes remain stable.
March 12, 2009... By Gina Roos The economic slowdown has had a resounding impact on the entire electronics industry and the switch market is no exception. For switch buyers, this means stable to slightly lower prices along with short leadtimes in the range...

Business Intelligence.
March 12, 2009... By James Carbone 71% Buyers who say business is down compared to last month Source: www.purchasingdata.com WHAT IT MEANS: The high percentage of electronics buyers saying business is down indicates the recession is impacting...

Distribution Briefs.(Mouser Electronics Inc. becoming first distributor to stock the latest single-board computers)(Digi-Key Corp. new distrubution agreement with Measurement Specialities)(Brief article)
March 12, 2009... By James Carbone Mouser stocks new single board computer Mouser Electronics has announced it is the first distributor to stock the latest single-board computers (SBC) from Rabbit, a provider of high-performance microprocessors and...

SRAM prices to decline as demand declines and market shrinks.(Static random access memory)
March 12, 2009... By James Carbone Buyers can expect static random access memory (SRAM) prices to fall by about 9% a year through 2013 as unit shipments decline by about 6%, according to researcher IC Insights. The average price for an SRAM will drop...

Top 10 OEMs buy fewer chips but still account for 35% of overall IC market.(Integrated circuits)
March 12, 2009... By James Carbone The 10 biggest original equipment manufacturers bought about $91.6 billion of semiconductors in 2008 or about 35% of all semiconductors purchased by companies, according to researcher Gartner. However, the amount of...

Microprocessor market sees weaker demand in 2008.(Brief article)(Statistical data)
March 12, 2009... By James Carbone The global PC microprocessor market saw an increase of just 0.9% in 2008 as unit shipments and revenue plunged in the fourth quarter, according to researcher IDC. In the fourth quarter, worldwide PC processor unit...

Electronics outsourcing revenue to fall 9.9% as EMS demand slips.(Electronics manufacturing services)(Brief article)
March 12, 2009... By James Carbone The recession is taking its toll on the electronics contract manufacturing industry as electronics outsourcing revenue will fall nearly 10% in 2009, according to researcher iSuppli. Global contract manufacturing...

Buyers still see no commodity inflation in near future.(Brief article)(Statistical data)
March 12, 2009... Staff (National, 90-day price expecations) UP DOWN SAME INDEX Organic chemicals 22% 35% 43% 43.6 Inorganic chemicals 18% 32% 50% 43.0 Energy 21% 36% 43% 42.9 Tooling...

SRAM Prices to Fall.(Brief article)
March 12, 2009... Staff Buyers can expect prices for SRAM to fall about 10% in 2009, because of sluggish demand due to the economic downturn and because more SRAM functionality is embedded on other chips. Prices also fell 10% in 2008 as suppliers competed...

Cobalt Prices Off 52%.(Brief article)
March 12, 2009... Staff The cobalt market remains weak with sales virtually nonexistent and U.S. prices 52% off their cyclical peak; in fact, they are closing in on the $12/lb spot average in Europe. The month-to-date average in the U.S. is $14.83/lb,...

Platinum Projections Up.(Brief article)(Statistical data)
March 12, 2009... Staff Goldman Sachs JBWere raised its platinum price forecast for this year by 24% saying platinum prices may average $1,050/oz in 2009 and rise to $1,250 in 2012, compared with earlier estimates of $847 and $942 respectively. UBS says...

Iron Ore Prices to Dive?(Brief article)
March 12, 2009... Staff A median estimate of eight analysts surveyed by Bloomberg News found that contract iron ore prices could drop 30% this year as steel production has dropped in a variety of markets. Iron ore for shipment to Chinese ports was at...

Rebar Prices Cracked.(Brief article)
March 12, 2009... Staff At $520/net ton, steel rebar prices are less expensive than at any time since February of 2007. That's good news for construction-materials buyers, who will need a lot of rebar for bridges, highways and other infrastructure projects....

No buying surge seen but signs of a pickup are evident.(Statistical table)
March 12, 2009... Staff (Buyers' 30-day buying plans) UP DOWN SAME INDEX Organic chemicals 11% 42% 47% 34.1 Steel 16% 50% 34% 32.9 Tooling 13% 48% 39% 32.0 Energy ...

Purchasing Indices Tick Up.(consumer price indexes)(Brief article)
March 12, 2009... Staff Several buyer indices trended up in the first quarter. Purchasingdata.com's Business Conditions Index has trended up for two months to 26.2 in January and 27.9 in February. Purchasingdata.com's Buying Plans Index has also risen...

Fewer Firms Eye Layoffs.(Report)(Brief article)
March 12, 2009... Staff The share of companies planning staff cuts fell to 13% in February from 23% in December, according to figures issued by Watson Wyatt Worldwide, an Arlington, Va.-based workforce consulting firm. "With over half of companies reporting...

Recovery Could Start Soon.(Survey)(Brief article)
March 12, 2009... Staff Economic activity could ramp up in the second half of 2009, according to the latest survey of members by the National Association for Business Economics. Still, NABE members say "a meaningful recovery is not expected to take hold...

Jobs, Banks Critical Factors.
March 12, 2009... Staff RBS Greenwich capital's Michele Girard says the financial system is trapped in a "feedback loop" in which banks--which started the housing problem and hurt the economy--can't recover because the economy is hurting. She says jobs must...

Lumber Prices Build.(Brief article)
March 12, 2009... Staff Lumber prices have been depressed but futures are going higher, spurred by investor fears that further production cuts will artificially tighten supply. Brokers say May contracts are on the way up toward $158 per 1,000 board feet...

Coal Production to Drop.(Brief article)
March 12, 2009... Staff Hal Quinn, president of the National Mining Association, tells the West Virginia Coal Association that coal production nationally will drop 4%, while demand for electricity, one of the major coal drivers, will decline only 1% this...

Cliffs Cuts Iron Ore.(Cliffs Natural Resources)(Brief article)
March 12, 2009... Staff Cliffs Natural Resources, the biggest iron-ore producer in North America, has gone ahead with plans to cut output of the steelmaking ingredient at its six U.S. and Canadian mines. In response to falling demand and prices, output will...

Firm to Buy Novachem.(International Petroleum Investment Co.)(Nova Chemicals Corp.)(Brief article)
March 12, 2009... Staff Struggling Nova Chemicals has agreed to a takeover offer from International Petroleum Investment Company (IPIC), a state-owned investment firm based in United Arab Emirate state of Abu Dhabi.

Green Energy Needs Money.
March 12, 2009... Staff Clean technology start-ups desperately need the $83 billion that President Obama promised the sector in the federal stimulus plan, according to a new report from accounting firm PricewaterhouseCoopers. Since last fall, when the...

Goodyear Cuts Back.(Goodyear Tire & Rubber Co. Chemical Div.)(Brief article)
March 12, 2009... Staff The rapid decline in automotive demand around the globe is forcing tire maker Goodyear to drastically reduce its production. Darren R. Wells, the firm's executive vice president, says demand for original equipment tires was down 22%...

Base Metals Surplus Shrinks.(Brief article)
March 12, 2009... Staff The base metal supply surplus in 2008 will shrink this year, according to a forecast released by the World Bureau of Metal Statistics. WBMS data shows that in 2008 the copper surplus almost doubled to 329,000 metric tons from a...

Industrial Output Down.(Brief article)
March 12, 2009... Staff The federal reserve reported that industrial production in January fell 1.8%. Production in the manufacturing sector dropped 2.5% in January. Since August, materials output has dropped 9.4%, while manufacturing output has dropped...

Arcelormittal Shuts Bar Mill.(Brief article)
March 12, 2009... Staff The No. 4 steel bar mill at ArcelorMittal's Indiana Harbor East plant in East Chicago, Ind. was shut in late February through early March. The bar plant makes steel in an electric furnace from scrap steel, and the 12-inch bar mill...

Toshiba Buys HDD Business.(Fujitsu America Inc.)(Brief article)
March 12, 2009... Staff Toshiba will buy the hard disk drive (HDD) operations of Fujitsu. Fujitsu will consolidate its HDD-related businesses and functions together in a new company. Toshiba will acquire about an 80% stake in the company and make it a...

IBM Gets Foundry Deal.(Brief article)
March 12, 2009... Staff IBM Microelectronics will build ferroelectric random access memory (FRAM) chips for Ramtron at IBM's Burlington, Vt. wafer manufacturing facility under a new foundry agreement. IBM will become Ramtron's third foundry supplier for its...

OCTG Prices Decline.(oil country tubular goods)(Brief article)(Statistical data)
March 12, 2009... Staff According to data from Pipe Logix, the "average market basket" of OCTG (oil country tubular goods) prices fell 6.9% in February to $2,234/ton from January's $2,400/ton. The latest decline puts prices down 28.1% from September's...

IEA Cuts World Oil Outlook.(International Energy Agency)(Brief article)(Statistical data)
March 12, 2009... Staff The key forecast for global oil demand has been revised down by 570,000 barrels/day to 84.7 million barrels/day for 2009 by the International Energy Agency (IEA) following a downward full-year world economic growth forecast to 0.5%...

PPI, CPI Tick Up.( Producer Price Index )(Brief article)
March 12, 2009... Staff Both the Producer Price Index and the Consumer Price Index from the U.S. Labor Department ticked up slightly in January after extended declines, but market watchers consider it a one-month blip, forecasting wholesale prices to...

Pulp Prices Crash.(Brief article)
March 12, 2009... Staff In North America, the list price for Northern bleached softwood kraft (NBSK) has slipped to $675/metric ton but the spot-market sales price is an even lower $605, down from $705 in January. The transaction price for Northern bleached...

Sheet-Steel Prices Down.(Brief article)
March 12, 2009... Staff Hot-rolled sheet steel in coil is forecasted to be down this year from the $843/net ton average in 2008, by several leading sources. Buyers tell purchasingdata.com that they paid $509 per net ton for hot-rolled sheet steel in...

BNSF Fined $345M on Rates.(Burlington Northern Santa Fe Corp.)(Brief article)
March 12, 2009... Staff Burlington Northern Santa Fe became the latest railroad to be fined by the U.S. Department of Transportation's Surface Transportation Board for charging unrealistically high rates to a "captive shipper" under a new program. Western...

Benzene Prices Increase.(Brief article)
March 12, 2009... Staff Spot benzene prices increased to $1.25/gal in February from a cyclical low of $1.03 but market experts say the increase came from increased demand from Latin American export markets and domestic U.S. demand is not strong enough to...

DRAM Prices Down 40%.(Brief article)
March 12, 2009... Staff Spot market and contract prices for DRAM fell by about 40% in the fourth quarter because of the global economic slowdown, according to researcher DRAMeXchange. The contract price of a DDR2 GB module dropped from about $13.50 in early...

Grayling marries 3PL, software to create streamlined inventory model.
March 12, 2009... By David Hannon There were just too many black holes. That, in a nutshell, was the problem with Grayling Industries' inventory model two years ago. It wasn't that Grayling's supply chain was too complicated. The Alpharetta, Ga.-based...

Business Intelligence.
March 12, 2009... By David Hannon 11.1% Decline in ATA's truck tonnage index in December Source: American Trucking Associations WHAT IT MEANS: While truckers have been reporting volume declines, the index's December plunge shows just how much...

Consolidation expected as truckload rates continue down.(Survey)
March 12, 2009... By David Hannon With demand and rates heading down, truckload carriers are struggling with their bottom lines and freight buyers and shippers need to continue to maintain their communication with carriers to ensure timely shipments. In...

Carriers continue to report low demand, rate declines.(Financial report)
March 12, 2009... By David Hannon The fourth-quarter financial reports from a variety of less-than-truckload carriers showed steep volume declines at the end of 2008 continuing into early 2009, putting some carriers at risk. Most carriers said demand...

U.S. port cargo traffic forecast to sink in 2009.(Financial report)(Brief article)
March 12, 2009... By David Hannon After dropping 7.9% last year, cargo volume at the major retail container ports in the U.S. is expected to drop almost 12% in the first half of 2009, as global trade continues to dry up. The latest version of the...

Buyers learn from their distributors.
March 12, 2009... By Susan Avery Distributors do more than move products around. Their expertise at logistics can be invaluable to MRO buyers working to improve efficiency, reduce costs and ultimately improve the bottom line. Supply chains for...

Enter the buyers' market.
March 12, 2009... By Tom Stundza The commodity stainless steel market remains weak, driven by downturns in such consumer-oriented markets as automotive and appliances. Prices, therefore, are softening. Stainless steel purchasing has been falling...

Metals buyers should enjoy 2009; beware of prices, supply in 2010.
March 12, 2009... By Tom Stundza "The outlook for supply, demand and pricing of alloying and plating metals is incredibly cloudy," says analyst Edward Meir at the MF Global commodities desk in New York. "It is almost as if someone flipped a switch back in...

Business Intelligence.
March 12, 2009... By Tom Stundza 53% Eight-month drop in price for hot-rolled sheet Source: www.purchasingdata.com WHAT IT MEANS: Hot-rolled sheet was averaging $500/net ton in mid-February, a drop of 53% from the cyclical peak of $1,068 last...

Metals Chips.(Sandmeyer Steel installing cutting tool)(Nucor Corp delaying start of a new plant)(Precoat Metals Inc. closing its plant)
March 12, 2009... By Tom Stundza Sandmeyer Steel has installed the fourth abrasive waterjet cutter at its Philadelphia stainless steel and nickel alloy plate processing center. The four machines have seven cutting heads capable of producing near net-shapes...

Nonferrous metals markets have gone from deficit to surplus.(Brief article)
March 12, 2009... By Tom Stundza The world refined zinc market showed a 134,000 metric tons surplus at the end of November 2008, compared with an 11,000 metric ton deficit in the same 11-month period of 2007, according to statistics from the International...

Vale, Baosteel cancel Brazil steel mill.(mining giant Vale canceled plans to build a steel mill )(Brief article)
March 12, 2009... By Tom Stundza Brazilian mining giant Vale has canceled plans to build a steel mill with Baosteel Group, China's largest steelmaker, because of a slump in global steel demand and reductions in steel production at existing mills. The two...

MAPI economist: steel market will recover in '12.(Brief article)
March 12, 2009... By Tom Stundza The domestic steel market may stabilize next year but won't show solid improvement until 2012, suggests Daniel Meckstroth, chief economist for the Manufacturers Alliance/MAPI business research group. He told the Steel...

Honeywell Specialty Materials automates buying worldwide.
March 12, 2009... By Susan Avery Having a vision for procurement and not wavering from it is how Honeywell Specialty Materials is achieving a goal of standardizing and automating its buying processes all over the world. Benefits the company realizes...

Business Intelligence.
March 12, 2009... By Susan Avery 40,000 Items added to the 2009 MSC safety products catalog Source: www.mscdirect.com WHAT IT MEANS: The distributor expanded its line based on feedback from customers in metalworking and manufacturing...

Procurement vision.(Honeywell Specialty Materials )(Brief article)
March 12, 2009... By Susan Avery Procurement at Honeywell Specialty Materials developed a vision and never wavered from it. The vision entails: Proper controls in place, meaning that only procurement personnel have a delegation of authority to purchase...

Your growing role in risk management.(Editorial)
March 12, 2009... By Paul Teague, Editor in Chief Imagine yourself in this position: A key supplier calls you out of the blue--from his lawyer's office. He asks you to meet him there. Today. And he says, in essence, to bring the company checkbook. When you...

The risk disconnect.
March 12, 2009... By Paul E. Teague Analyzing the supply base is a critical part of risk management. But purchasing can do much more--like serve as a bridge to connect departments and question basic assumptions about company operations. You've heard the...

Supplier communication is key at Humphrey Products.
March 12, 2009... By John Day - Humphrey Products Company Location: Kalamazoo, Mich. - Size: 300 employees - Business: Fluid/mechanical/electrical control modules for material handling, healthcare, transportation, and microelectronics applications ...

11 tools for managing contracts.
March 12, 2009... Staff After the strategic sourcing, after the supplier analysis, after the negotiations, there's the contract. It documents everything you've agreed on with your suppliers and is the guide on how you'll work with them and what they can...

Leverage your data to find ways to save.
March 12, 2009... By Ritu Jain Globally extended supply chains. Shrinking product lifecycles. Ever-changing customer demands. And, to top it off, a global recession and associated credit crunch. Those are the ingredients of a perfect storm. So what can...

Compliance to policy, preferred suppliers provides savings opportunities for buyers.
March 12, 2009... By Susan Avery As purchasing professionals responsible for managing indirect sourcing know, an agreement with a preferred supplier won't result in bottom-line savings for the company unless employees are aware of the agreement and use it....

IFF is ahead of the curve in low-cost country sourcing.(International Flavors and Fragrances)
March 12, 2009... By William Atkinson When it comes to low-cost country sourcing, New York-based International Flavors and Fragrances (IFF) was ahead of the curve--50 years ahead of the curve. While low-cost country sourcing is a relatively new concept...

Recession may drive re-thinking of some outsourcing deals.
March 12, 2009... By David Hannon Outsourcing of various services and functions within companies will continue during the ongoing global recession, but for U.S. companies, the rate of outsourcing may slow slightly and more companies may take a closer look...

IBM offers new Green logistics consulting service.
March 12, 2009... Staff IBM in January introduced its Supply Chain Network Optimization Workbench, a consulting offering help companies make more cost-effective and Greener logistics decisions. According to a corporate statement, Supply Chain Network...

Survey finds cost savings potential in meetings spend.(Brief article)
March 12, 2009... By Susan Avery Although meetings and events represent 35% or more of many companies' travel spending, less than half of companies polled have established meetings policies in place to manage that spend area. Comparatively, 95% have a...

Business Intelligence.(briefs)(chief procurement officers)(Survey)(Brief article)
March 12, 2009... Staff 85% Companies cutting inventories as a way to reduce costs Source: Deloitte report WHAT IT MEANS: Deloitte says, "many companies may find out that significant inventory cuts have an adverse effect on customer service...

Social responsibility in low-cost country sourcing.(Brief article)
March 12, 2009... Staff There is no shortage of talk about corporate social responsibility lately, especially as it applies to working with low-cost and emerging country suppliers. "We are a socially-responsible company, so we encourage our suppliers...

Purchasing professionals still in demand, but hiring slows.
March 12, 2009... By Susan Avery While it appears that more purchasing professionals are looking for a job these days, there's still a need for strong sourcing experience and leadership. Kevin Rohan, director of procurement recruiting at J.P. Canon...

U.S.-China trade volumes plunge in early 2009.(Brief article)
March 12, 2009... By David Hannon If trade between the U.S. and China is an indicator of the global economy's health, then the global economy is very, very sick. After posting a 2.8% year over year decline in December, China's exports declined 17.5% in...

CPOs report budget cuts, cost pressures in current market.(chief procurement officers)(Brief article)
March 12, 2009... By David Hannon If you feel like your management team is asking your procurement organization to increase its cost savings while working with a smaller budget, you're not alone. According to a new survey of CPOs from Accenture, more than...

Halliburton pushes Lean Six Sigma to its supply base.(Halliburton Co.)
March 12, 2009... By William Atkinson A lot of companies begin looking at Lean, Six Sigma and other efficiency improvement strategies when business tightens, as a way to reduce excess costs. But Halliburton took the opposite approach and implemented Lean...

Natural gas prices forecast to stay low.(Brief article)
March 12, 2009... By David Hannon The U.S. energy Department is forecasting that natural gas prices in the U.S. will remain low this year as inventories continue to build during the recession. According to figures released February 10, the Henry Hub...

Get energy news in a Flash.
March 12, 2009... Staff Energy prices and supply are an ever more critical aspect of the strategic sourcing process. Buyers looking for more in-depth news on the energy market and energy prices can get a detailed analysis in the Energy Flash Report from...