or Search by TOPIC
Search Supply Chain Videocasts
  Sign-Up Free Newsletter
Supply Chain by the Numbers

- August 19 , 2011


Supply Chain by the Numbers for Week of August 19, 2011


US Factory Utilization Jumps; American Axle Shutting Two Factories over Failed Union Contracts; FMSCA Says EOBRs will Drive Big Savings for Carriers; Ocean Carriers Costs Rising in 2011



The rate of factory utilization in the US in July, as reported this week by the Commerce Dept., an increase of 2.2 points over July 2010, delivering some good news for the US economy as the capacity utilization number continues to climb from the record lows seen in June 2009 during the nadir of the recession. That said, the utilization number is still 2.9 percentage points below its long-run (1972-2010) average.



172 Million

The number of hours US freight carriers spend each filling out paper forms relative to hours of service rules that could be eliminated by a complete move to electronic on-board recorders (EOBRs) to track hours of service data, according to an estimate this week by the Federal Motor Carrier Safety Administration (FMCSA). The FMCSA is considering new rules that would require EOBRs for freight carriers and school bus drivers in the US, now accepting public comments.


Increase in operating costs this year for ocean carriers, depending on the type of ship, according to a new report this week from the analysts at Drewry Shipping Consultants. Factors include an increase in fuel prices, which is pushing up bunker fuel costs and lube, repair and maintenance costs, as well as much higher premiums to cover the risk of vessel hijacking. Labor rates are also rising a bit, says Drewry Those costs will ultimately show up in higher rates.



The number of manufacturing jobs that will be lost after auto parts supplier American Axle has been unable to reach agreements with unions in two of its factories. This week, the company announced it would close a plant near Buffalo after its current labor contract expires in February of 2012. Last month, the company announced it was closing a plant in Detroit that will affect some 300 workers after also not reaching an agreement with the union there. In the Buffalo plant, American Axle says its final offer did not reduce hourly wages, but did include changes to factory work rules and attendance policies.


Oct. 3, 2008

There are valid reasons for both the DC and DSD distribution models, but neither should determine the store assortment, which depends on the consumer.

The Distribution Center model makes sense when you have many prepackaged products which are continuously replenished and require little in-store servicing. With the facility justified, you can also add seasonal and holiday 'in and out' products which can share the distribution network.

The key is to manage the time supply of inventory in the warehouse and distribute it efficiently.

The Direct Store Delivery model can be implemented purely as a distribution method or also allow the manufacturer to manage some of the in-store merchandizing.

I do not see any advantage of using DSD simply to deliver merchandise. Although it may help the 'mom and pops' that are on the same route as a large retailer, the DSD model must be more expensive. Once the big drops are removed, it will become more costly to reach the independent retailers but the larger retailer must benefit.

If DSD is used to support in-store merchandising, then you have a different story. The manufacturer's representative can give their products the individual attention that increases their sales. The bad thing is that they can also load up the store with inventory if no one is watching.

Bill Bittner
BWH Consulting


Supply Chain Digest Home | Contact Us | Advertise With Us | Sitemap | Privacy Policy
© 2006-2014 Supply Chain Digest - All Rights Reserved