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Supply Chain by the Numbers
   
 

- June 8, 2017 -

   
  Supply Chain by the Numbers for Week of June 8, 2017
   
 

 How Much Do Procurement Professional Earn? US Warehouse Market Remains Red Hot; Will Investors be Interested in US Infrastructure Deals? Retail Execs Don't Expect to to See Shipping Revenue

   
 
 
 

$259,000

That is how much chief procurement officers (CPOs) or equivalent titles made on average in salary last year, according to the always interesting compensation study done now for 12 years by the Institute for Supply Management. That's up from $241,340 in 2015. The analysis was based on survey responses from more than 3000 practitioners, so the numbers have some validity. At the director level, the average salary was about $153,000, and at the manager level, about $109,000 - interestingly both numbers about flat with last year's report. For new ("emerging") procurement professionals, the average was a still fairly healthy $83,000. How do you measure up? As usual, however, average compensation in procurement varies greatly by what business sector a company is in. For example, average salaries were above $151,000 in information-related companies like publishing and entertainment, versus just $86,000 in the agriculture sector. Manufacturing saw an average of almost $117,000 in salaries, with nearly $125,000 in the retail sector, and $104,000 in wholesale companies. You can find our full report summary, including several nice Charts from the report, here: Purchasing and Procurement Professionals - How Does Your Salary Measure Up in 2017?
 
 


 
 
 

10

That's for how many years a typical private equity fund has its investors' money locked up - and that's a problem for President Trump's plan to utilize public-private partnerships to fund US infrastructure development. Why? Because the timeline of many infrastructure projects exceeds 10 years, sometimes substantially, meaning many funds won't or in some cases can't participate in a project. Low returns are also an issue, with many infrastructure projects paying off below what funds normally expect from their investments. Trump has proposed spending $200 billion over 10 years on programs to incentivize greater use of financing from private investors. The administration said that funding will be able to create a total expenditure of $1 trillion to fix and build roads, bridges, dams and broadband lines. This effort to shift to private funding reflects the difficulty of coming up with taxpayer dollars in an era of highly constrained budgeting at all levels of government. The administration hopes to cut lead times to get projects from the planning stage to construction by reducing permitting requirements and thus reduce the political risk that has deterred some private investment. It also plans to encourage cities and towns to raise fees - such as roadway tolls or water-usage charges - that will provide the revenue streams for private-equity investors. The Trump plan is high risk - but what is the alternative?

 
 
 
 
 

5.3%

That was the vacancy rate at the end of Q1 for US industrial space - mostly warehouse and distribution facilities - the lowest such level since 2000, according to the new Q1 Outlook report from JLL (formerly Jones Lange LaSalle), as the market remains red hot. That despite a lukewarm overall US economy, with Q1 real GDP growth of just 1.2%. However, rapidly rising demand for efulfillment space is in part fueling the growth. A key message from the report was that for companies looking to renew a lease almost everywhere, get ready for the landlord to come back with much higher prices. "For cost-sensitive occupiers that need larger warehouse spaces, limited options of existing spaces are available on the market and they are likely to experience sticker-shock when renewing their rents," JLL says. All that said, rates vary dramatically by different markets. Rents are still just $3.79 per square foot in the Atlanta market and similar in Dallas. Compare that to the rates in the East Bay area of San Francisco ($7.99), Los Angles ($9.12), Orange County, CA ($9.24), parts of San Francisco proper ($13.91), and Seattle ($9.70).

 
 
 
 

60%

That's about what percent of retail supply chain executives believe it is not possible to fully recover efulfillment costs, while even more - 70% - agree that the cost of fulfilling and delivering on-line orders erodes gross margins, according to the Seventh Annual State of the Retail Supply Chain report from the Retail Industry Leaders Association, released this week. On the last point about free shipping eroding margins, SCDigest says "No kidding." The report says there is a growing sense that "fast or free" delivery has given way to "fast and free" - not a good financial situation for retailers, according to the report, a joint project of Auburn University's Center for Supply Chain Innovation and RILA. "Ultimately, the marketplace is going to decide what you can monetize and what you can't," one executive told RILA. "I think the best case for us is to have the capability to monetize value-added services," without detailing what those might be. But it appears fast shipping isn't one of them.

 
 
 
 
 
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