Randall Manufacturing
Archive | Printer Friendly Version | Send to a Friend | www.mhi.org | MHI Solutions magazine July 31, 2013
Georgia Tech Supply Chain & Logistics Institute
The ability of companies to generate cash from operations deteriorated in 2012, as the opportunity for working capital improvement at 1000 of the largest U.S. public companies rose dramatically, topping $1 trillion for the first time, according to the 15th annual working capital survey from REL Consultancy, a division of The Hackett Group, Inc. and CFO Magazine.
The research, which examines the ability of companies to collect from customers, manage inventory, and pay suppliers, found that as revenue grew by 5 percent in 2012, profitability -- as measured by EBIT margin -- decreased. At the same time, working capital levels increased by 6 percent, to levels 25 percent higher than three years ago. Actual Days Working Capital remained flat. But cash conversion efficiency deteriorated for the second year in a row, indicating that companies are taking longer to convert sales into cash. In addition, free cash flow -- which is a key indicator of the health of corporate cash flows and represents the cash companies are able to generate after laying out money to maintain or expand their asset base -- fell by 14 percent year over year, indicating poor cash flow management.
Air Cargo World
Prolonged weakness continues in June for the Asia Pacific air cargo markets, according to preliminary traffic figures from the Association of Asia Pacific Airlines.
Asia Pacific airlines carried more international passengers, but international air cargo demand, expressed in freight tonne kilometers, was 2.2 percent lower year over year, reflecting continued weakness in key export markets.
Offered freight capacity increased marginally, by 0.3 percent, leading to a 1.7 percentage point fall in the average international air cargo load factor to 66.2 percent.
Material Handling & Logistics
While most executives in the wholesale distribution industry are optimistic about their business’ growth prospects in the coming year, they are still concerned about government regulation—particularly where healthcare reform is concerned. That’s the key takeaway of the 2013 McGladrey/NAW Institute Distribution Monitor survey, sponsored by McGladrey LLP, a tax consultancy, and the NAW Institute for Distribution Excellence, the long‐range research arm of the National Association of Wholesaler‐Distributors(NAW).
According to this year’s survey results, 87 percent of the respondents reported optimism about their own business’ growth prospects and 75 percent said they were optimistic for the wholesale distribution industry in general. Sixty‐three percent of executives also said they expect to add jobs in the next 12 months, with an average expected increase of 4.4 percent.
Industry Week
When a manufacturing company controls the entire supply chain of its products from growing and processing the raw material to manufacturing the products and then delivering through direct and indirect sales, the supply chain takes center stage in determining factory location.
Consumer products manufacturer Amway, whose parent company, Alticor Inc., pulled in sales of $11.3 billion for 2012 and has seen with sales increases 12 out of the past 13 years, has made plans to accommodate its growth. Already underway is a $375 million investment in manufacturing and R&D expansion, including four facilities in the U.S., a new manufacturing facility in India and additional sites in both China and Vietnam.
Emerging markets have been identified as the primary business growth area for the next century, and organizations with strong demand planning capabilities and segmented supply strategies are better positioned to mitigate risks and capitalize on market opportunities, according to a new report by Gartner, Inc.
"Emerging markets present huge opportunities but come with unique characteristics and challenges due to the constant thrust for business growth, volatile demand and low maturity of supply chain processes," said Mike Burkett, research vice president at Gartner. "The ability to plan demand better is a tremendous advantage, as accurate demand plans help supply chain leaders align end-to-end supply chains correctly, and forecast predictable outcomes and profitable responses to demand."
The Raymond Corporation
Modern Materials Handling
Optimism for the nation’s economic outlook among U.S. business leaders rose to a net balance of 55% in second quarter 2013 from 31% in the previous quarter. This is the highest level recorded since 2005, according to the latest data from the Grant Thornton International Business Report (IBR), a survey of 3,200 business leaders in 44 countries.
In a recent interview, Dominic King, global research manager for Grant Thornton and head of the IBR, said manufacturing businesses also reported optimism significantly above the U.S. all-business average.
Ann Drake, CEO of DSC Logistics and one of the few female chief executives in the logistics industry, discusses the supply chain as a career path for women and the goals of AWESOME (Achieving Womens’ Excellence in Supply Chain Operations, Management and Education), a new organization that she founded.
There never has been a better time for women to enter the field of logistics and supply chain management, says Drake. "The kind of talent that is needed in the industry today is that of orchestrator – people who are able to pull together different pieces and teams to work across organizations and silos," she says. "This is something that most women naturally do quite well."
Retail Industry Leaders Association
In the midst of a slow U.S. recovery, the prospects for expanding roles, widespread employment opportunities, and solid salary growth seems incomprehensible in most fields.
Yet, this is the reality for today’s supply chain professionals. Peruse relevant industry reports and you will learn that supply chain management (SCM) is on an upward trajectory as a career field:
On the face of it, bringing electronics manufacturing jobs back to the US from more affordable foreign locations is all the rage. At EBN, though, the debate remains evenly split.
In our recent poll (and it's not too late to weigh in here), our readers remain pretty evenly divided on the question of whether electronics OEMs will bring jobs back to the US. In fact, the "yes" votes and the "no" votes have each drawn 38 percent of respondents.
Another 24 percent, nearly one quarter, are taking more of a wait-and-see approach. Still others wished we had offered an "It depends" option. "With increasing logistics costs, onshore manufacturing becomes a better option for heavy and bulky items (cars are an example)," commented EBN blogger Ken Bradley. "For smaller lighter items, offshore still wins."
Food Engineering
According to OSHA, "manual material handling is the principle source of compensable injuries" in the goods producing industry. And when workplace injuries occur, workers aren’t all that is hurt—so are profits. It is estimated $250 billion is lost due to workplace injuries and illnesses every year. Processors know workplace injuries and illnesses are counterproductive to the bottom line, but may be hesitant to adopt new technologies without proof of sufficient return on investment (ROI).
Ideally, hazards would be engineered out of the process, but that isn’t always possible. However, use of a pneumatic conveying system can reduce fall hazards and back injuries as well as control fugitive dust.
Material Handling & Logistics
Although the automotive industry is the biggest consumer of robotics for production applications, other industries are increasing their use—resulting in higher sales numbers. North American robotics companies have set new sales records through June of 2013, according to new statistics released from Robotic Industries Association (RIA), the industry’s trade group.
A total of 10,854 robots valued at $679.3 million were ordered from North American robotics companies in the first six months of 2013, an increase of 1.9% in units over the same period in 2012 and 1.3% above the previous first-half record set in 2005.
Modern Material Handling
As the market continues to move to a buy anywhere/ship from anywhere/deliver to anywhere model, distribution is one of the fastest-changing processes in the world of logistics.
With the number of online and mobile orders on the rise, manufacturers and distributors are grappling with how to best control their costs while serving customers across multiple channels of distribution.
Industry Week
The proliferation of counterfeit electronic parts into the manufacturing supply chain costs the U.S. government and its contractors billions each year.
But the problem is not just limited to those who supply government agencies. Recent reports show consumer and industrial businesses are losing approximately $250 billion each year because of counterfeit components.
Naylor, LLC


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