Supply Chain by the Numbers
   
 

- March 4, 2016 -
   
  Supply Chain by the Numbers for Week of March 4, 2016
   
 

US Manufacturing Continues to Slow, but New Orders are Bullish; Lots of Robots Coming, IDC Predicts; Target Tries New Approach to Reducing Out-of-Stocks; China Dealing with its Own Rust Belt Issues
   
 
 
 

5

That's how many consecutive months of US manufacturing decline we've now seen, after the Institute for Supply Management released its Purchasing Managers Index for February this week, showing a score of 49.5, once again below the 50 mark that's separates expansion from contraction. This new negative streak comes after 35 consecutive months of expansion that ended in August. The modestly good news is that the rate of contraction slowed last month, with the score up 1.3 percentage points from the January score of 48.2. And in still better news, the New Orders Index registered 51.5, showing modest expansion, matching the same reading as in January. The prices paid index was up five percentage points, but is still registering at very low levels, coming in at 38.5, meaning input costs continue to fall, good for most companies but also a sign of global economic weakness.
 
 


 
 
 

17%

That's the annual rate of growth in worldwide robotic spending we'll see in through 2019, according to new estimates from the analysts at International Data Corporation (IDC). That growth will take the total spend from $71 billion in 2015 to $135.4 billion in 2019, almost double the total from last year. That's a lot of robots. "Such broad-based growth in robotic adoption is being driven by increasing labor costs, shortage of skilled labor, and an increasing emphasis on repeatable quality in conjunction with a reduction in prices of robotic systems and strategic national initiatives," said Dr. Jing Bing Zhang, who is in charge of robotics research at IDC Manufacturing Insights. What will be the impact on humans from deployment of all those robots? That's what we don't really know.
 
 
 
 
 
18

That's how many units of one type of peanut butter the shelf at Target stores can hold. The problem? The vendor ships in cases of 24, meaning Target always has to take a partial case from the backroom to the floor. Hoping to reduce labor costs and reduce out-of-stocks, Target managers are pouring over many categories of products it sells to see how many different formats and pack sizes of products like bottled water or soap it really needs to stock in its stores - and reduce complexity in store logistics as the same time. Another step Target is taking includes putting more product on the sales floor rather than the stockroom by redesigning shelves. As it cuts back SKUs in many product categories, Target is going to test the new merchandising plans at one store to gauge customer response.
 
 
 
 

1.8 Million

That's how many jobs are likely to be lost in the Chinese steel an coal industries alone over the next few years, the government there says, as it continues efforts to reduce severe overcapacity in most of its manufacturing sectors. China is beginning the delicate process of culling the ranks of "zombie" factories because the country's bloated industrial sector is a weight on the domestic economy and raising hackles with trade partners concerned about being flooded with cheap steel and other industrial goods. But some experts question China’s commitment to what's sure to be a socially fraught undertaking at a time when growth is slowing.  Meanwhile, Bloomberg is already talking about vast areas of Chinese "rust belts," where hundreds or thousands of state-owned factories are falling into a steady state of decline.
 
 
 
 
 
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