Supply Chain by the Numbers for Week of Sept. 2, 2011

Supply Chain by the Numbers

- Sept. 2 , 2011

Rare Earth's Stratospheric Prices; Software Maintenance Fees Drive Revenues; Bulk Shipping Rate Collapse; $1.6 Billion in Solar Investment Gone Overnight - Including $500 Million from Taxpayers



$110,000
The approximate current global market cost per metric ton of cerium oxide, a compound made of a rare earth metal that cost just $3100 per ton a few years ago. Rare earth metals, small but critical components in such products as cell phones, green energy technologies, defense systems and more, have come under tremendous cost pressure as China, which currently has a near monopoly in rare earth production right now, continues to reduce export quotas, and is using its situation to force global firms to move production there. See China Continues to Flex Rare Earth Metals Muscle, as Companies Moving Factories there to Avoid Shortages and Brutal Prices Increases in Global Markets.

50%

The amount of company revenue that SAP generated from maintenance fees in 2010, or $8.2 billion. That according to an article in the Wall Street Journal this week noting SAP rival Oracle is suing Rimini Street, a software services firm that is angling in on Oracle's maintenance stream as a so-called "third party maintenance" provider - which would be a real threat to any large software firm. Oracle says Rimini misappropriated its software.



	1537
The level this week at one point of the Baltic Dry Index, which measures the prices of chartering dry-bulk ships primarily used to haul commodities across the globe. Astonishingly, that is down about 80% percent from the 7000 or so level reached at the peak in 2008, as added capacity has well overshot demand. The dramatic fall is causing controversy, and shippers look to renegotiate existing contracts.




$1.6 Billion
The approximate investment that had been poured into California solar panel firm Solyndra to date - including $535 million of US government money - before the firm announced it was filing for bankruptcy protection this week and suddenly laid off all 1100 of its workers. Chinese investments and subsidies to its solar industry certainly played a role here, though how much is unclear. According to a company spokesman, Solyndra's cost of production was roughly $2 per watt. Some Chinese companies have production costs of roughly $1.20 to $1.25 per watt.