Supply Chain by the Numbers for Week of Aug. 30, 2012
US Trade Deficit with China Grows and Grows; Diesel Prices Again on the March; Medtronic Scopes Lower Inventory Levels; Including Customers in the Forecast
The percent by which China imports of goods to the US now exceed US exports to the country, according to a new report from MAPI - The Manufacturing Alliance on 1H 2012 trade statistics. Amazingly, the US trade imbalance with China now accounts for 71% of the total US trade deficit. Through the end of June, US imports of goods from China were up another 9%, while US exports back to China rose only 3%, with this year's trade imbalance with China expected to exceed last year’s record $296 billion. This trajectory is unsustainable, the MAPI report says.
Average cost for on the road diesel fuel, as the price continues to climb for a variety of reasons, the U.S. Energy Information Administration said earlier this week. Diesel prices rose 6.3 cents last week on average, marking the fifth time in six weeks that there has been a rise of at least 5 cents. Right now, US prices are up 26.9 cents from a year ago, an increase of around 7% year over year, pounding logistics budgets.
The low percentage of companies that forecast at the stock keeping unit (SKU), location and customer planning level, according to new research study from the analysts at Gartner released this week. Gartner says that given that a primary driver of demand volatility is increased customer requirements, its analysts found it surprising that companies do not measure demand error down to the customer level as a means to better understand the sources of forecast error, so that process and accountabilities can be improved.
That's what medical device manufacturer Medtronic expects to take out of its finished goods inventory over the next few years as it finishes deployment of inventory optimization software across its seven major business units. That according to Tom Boos, Sr. Director of Project Management at the company during an excellent Videocast this week on our Supply Chain Television Channel. Boos says Medtronic plans to next move its use of the tool to component inventories. To view the broadcast, go here: Inventory Optimization Success at Medtronic