Supply Chain by the Numbers for Week of Sept. 14, 2012
P&G Sees "Beautiful" Results with Inventory Optimization; Truck Drivers Going AWOL; US Becoming Advantaged in Manufacturing; Sun Shining Bright on US Solar Installations
Amount by which the US was "advantaged" in terms of total supply chain costs for manufacturing products in the US versus China for sales into the US in the steel products sector (tubes, piping, etc.), according to just released analysis from PWC. That was versus a disadvantage of 3.6% in 2006. This scenario is being seen in other sectors as well, PWC says, though not all. Surprisingly, it is not rising Chinese labor costs driving this change, as most others cited relative to "reshoring," but a variety of other factors, ranging from transportation costs to more skilled labor to costs of capital.
Level of inventory reduction consumer products giant Procter & Gamble has been able to achieve in its cosmetic business through use of Inventory Optimization technology, according to P&G's Bill Tarlton, at the Logility software user conference in New Orleans this week. Interestingly, 7% came from "tactical" improvements - better managing inventories across echelons within the current network. The other 4%, Tarlton said, came from "strategic" network changes facilitated by the IO software’s support for "what if" modeling to see the impact on inventories from various new network designs. Reductions overall are in the 3-11% range, depending on the business unit.
Number of megawatts worth of solar energy panels expected to be installed in the US this year, as much solar power as was installed in all of 2001-2010, according to an article last week in the Wall Street Journal. That is the equivalent of more than two nuclear-power plants. Better technology and lower costs for panels is fueling the spike, though hardly any are being made in the US. That as Chinese manufacturers, far too many for the market arising from government subsidies, are having severe financial problems due to rock bottom prices.
Level of driver turnover in Q2 among larger truckload carriers with revenues over $30 million annually, according to just released data from the American Trucking Associations (ATA). That puts the closely watched figure over 100% for the first time in more than four years. That was up from about 88% in Q1. The number isn't quite as bad as some make it – the vast majority of the turnover is in newly hired drivers who decide they don't like the job – but with predictions for a major driver shortage over the next few years out there, this number is not a good sign. It was as low as about 50% in Q3 2010.