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Supply Chain Apocalypse? I can't even spell the word!

January 5, 2009

Did you know this is Armageddon Week on the History Channel? Every night there’s going to be a program on how close we are to the end of the world. They kicked the week off yesterday with a marathon of shows on “The Seven Deadly Sins.” Greed and Pride were highlighted as the basis for our current business woes. Then they had a special on Nostradamus and his prediction that the world as we know it would end in December of 2012. What a great way to cap off the holiday season!

 

Well, December 2008 wasn’t too jolly for the manufacturing sector. All industries posted declines in manufacturing activity, according to the latest Report on Business from the Institute for Supply Management. That marks the fifth consecutive month in which economic activity was stagnant. The overall economy contracted for the third consecutive month, the report added.

 

Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee reported that new orders have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948. He added that manufacturers are reducing inventories and shutting down capacity to offset the slower rate of activity. The Inventories Index registered 38.8 percent, which is 0.3 percentage point lower than the 39.1 percent reported in November.

 

I don’t know if all that’s enough to prove that Armageddon is around the corner, but how about this: a recent report from Bloomberg News said that Toyota Motor Corp. is rethinking its “Just-In-Time” philosophy in order to rescue suppliers from bankruptcy—and to save itself from supply chain disruptions. The report says Toyota may even work with more parts makers and increase inventories to further protect itself from collapses among suppliers—which also supply Detroit automakers. Toyota fattening up its inventory?

 

Maybe the end IS near.

Posted by Frank on January 5, 2009 | Comments (6)

March 22, 2009
In response to: Supply Chain Apocalypse? I can't even spell the word!
Rufor commented:

Greatings, www.mmh.com - da best. Keep it going! Thanks Rufor


March 22, 2009
In response to: Supply Chain Apocalypse? I can't even spell the word!
Rufor commented:

Greatings, www.mmh.com - da best. Keep it going! Thanks Rufor


January 20, 2009
In response to: Supply Chain Apocalypse? I can't even spell the word!
Asha commented:

I believe that even though the manufacturing sector is choosing to store less in inventory, I can't belive that they won't be interested in getting the inventory there efficiently. At Boston Rack, we carry all the equipment that helps manufacturing do a better job with their inventory. I can't believe that other material handling suppliers are not doing the same.


January 20, 2009
In response to: Supply Chain Apocalypse? I can't even spell the word!
Asha commented:

I believe that even though the manufacturing sector is choosing to store less in inventory, I can't belive that they won't be interested in getting the inventory there efficiently. At Boston Rack, we carry all the equipment that helps manufacturing do a better job with their inventory. I can't believe that other material handling suppliers are not doing the same.


January 7, 2009
In response to: Supply Chain Apocalypse? I can't even spell the word!
Gary E Haffer commented:

Just in Time inventory is the practise of keeping minimal inventory on hand. In bad economic times if the suppliers who you work with go out of business you can't build your widget. A problem. So, perhaps a better way is to work in parallel with many suppliers building the same parts. This method builds competition and sometimes even drives the price down because they are all the supplier. Of course the down side is that companies like Toyota must eat the cost of keeping inventory on hand. It is a strategy for tough economic times.


January 7, 2009
In response to: Supply Chain Apocalypse? I can't even spell the word!
Gary E Haffer commented:

Just in Time inventory is the practise of keeping minimal inventory on hand. In bad economic times if the suppliers who you work with go out of business you can't build your widget. A problem. So, perhaps a better way is to work in parallel with many suppliers building the same parts. This method builds competition and sometimes even drives the price down because they are all the supplier. Of course the down side is that companies like Toyota must eat the cost of keeping inventory on hand. It is a strategy for tough economic times.

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