SCDigest Editorial Staff

World Ports’ U.S. Sites are Sold – to an Insurance Company?

Dubai Ports World announced this week that it was selling the six U.S. port operations it acquired as a result of its acquisition of UK's Peninsular & Oriental Steam Navigation Company (P&O) in February of this year to insurance giant AIG.

That acquisition of course generated a firestorm of criticism and concern over the prospects of a company based in the Middle East having control of U.S. port operations, due to security and terrorism worries.

The U.S. House of Representatives quickly voted to block the deal, and World Ports agreed it would dispose of the U.S. assets, which include ports at New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia, and smaller operations at 16 other U.S. ports.

Why is AIG interested in running ports? The company said its AIG Global Investment Group has a track record of investments in various infrastructure businesses, including power, waste and water operations. Port operations are a new avenue for infrastructure investment. With global trade expansion, port operations should continue to be a growth business, and a deep-pocket company like AIG should be capable of funding the billions needed in automation and infrastructure improvement…

Supply Chain Council Announces New Education and Certification Program

The Supply Chain Council, most noteworthy for the development and on-going improvement of the Supply Chain Operations Reference (SCOR) model, is the latest organization to jump on the increasingly crowded field of training and certification with the announcement this week of a new Supply Chain University.

According to the Council, it has deepened its supply chain educational offerings to include six new courses with a planned roll-out of a certification program. The University will administer and develop its training courses worldwide, and over the next 18 months the council plans to present more than 150 courses globally. Each will focus on driving business value through the use of Supply-Chain Council Reference Models. These include the use of the DCOR™ model for design, CCOR™ for improving customer interaction, and SCOR for supply chain modeling and business benefit.

The details are expected soon on the Council web site, but at press time were not yet available. Check back soon. The thirst for supply chain training and knowledge is huge and growing.

Watch Who You’re Hiring – Meat Packer Swift Gets Raided for Big-Time Illegals

Federal officials raided six plants of Colorado-based meat packer Swift & Co. this week, looking for illegal aliens suspected of acquiring fraudulent IDs and social security numbers, enabling them to be hired by the company.

Reports are that nearly 1,000 agents from the Immigrations and Customs Enforcement bureau swarmed the six plants, mostly in Midwest and Southwestern states. Several hundred workers at minimum were arrested on both minor and more serious immigration violations.

The raid culminated a 10-month investigation of the plants’ workers and alleged system for a form of identity theft.

Swift said it was not part of any wrongdoing, and had no knowledge of the illegal status of any of its workers or the identity fraud.

Work was temporarily stopped at most of the plants. It is unclear how much and for how long this issue will disrupt the company’s production…

European Union’s New Regulations on Chemicals Expected to Cause Supply Chain Turbulence

The European Union is on the verge of greatly expanding regulation over a huge number of chemicals in an effort to reduce pollution and other environmental impacts, but the rules will have a huge supply chain cost and are creating havoc with company planning efforts.

The legislation, which will impact European business activities directly and have a secondary impact world wide, is called REACH, an acronym for Registration, Evaluation and Authorization of Chemicals. It will at minimum likely require vast and onerous new documentation requirements for manufacturers and importers on how thousands of chemicals are used, with additional regulation and restriction on many of those chemicals likely to come later.

The impact is expected to be mostly on the original chemicals manufacturer and some importers, not on companies using the chemicals in businesses such as plastics, automotive, high tech and others – but all that is at this point unclear. The rules may in fact take almost a decade to play out.

The Wall Street Journal says German chemical giant BASF is budgeting hundreds of millions of dollars to meet the compliance requirements and help customers deal with the rules.

The costs for compliance are a huge concern, but even more so may be the uncertainty. Both chemical manufacturers and their customers will find it difficult to plan their products and supply chains without a more clear understanding of the cost impact of the rules, and potentially even the restriction of many current uses of these chemicals…

Toyota Exec Says Quality Issues May be Result of Get-to-Market Pressure- and Will Modestly Scales Back Expansion as a Result

An executive from automotive quality leader Toyota says a rush to get products to market may have led to some increasing quality problems with some of its vehicles.

The comments came from company president Katsuaki Watanabe, following a two-month long internal review, stemming from mounting quality issues and product recalls. Watanabe cited get-to-market pressures as resulting in some steps normally taken to ensure quality being reduced or circumvented.

Watanabe said engineers, for example, in some cases were not building prototypes of components, and that engineering outsourcing may also have played a role.

"We found out through the study that we outsourced engineering perhaps more than we should have, and we relied on computer-aided engineering and other computer analysis and didn't conduct as many quality checks as we should have," Mr. Watanabe said.

With ambitious goals to become the world’s largest automotive company, the quality issues will cause Toyota to delay by perhaps six months the introduction of some new models. The delays may hold back a bit its overall growth trajectory, but not really crimp sales or profits…

Do you have any comments on this week’s supply chain news bites? What types of news is of most interest to you. Let us know your thoughts.