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Supply Chain by the Numbers

- Nov. 8, 2013

  Supply Chain by the Numbers for Week of Nov.8 , 2013

Hours of Service Impact Starts to be Quantified; Kellogg  Says Supply Chain Transformation Tastes Great; Apple Offshore Labor Abuses far from Over; Aging Manufacturing Labor Force a Big Concern



The reduction in revenue per truck mile in Q3 at truckload carrier Werner attributable to the changes in Hours of Service rules, which went into effect on July 1 at the start of the quarter. That puts the impact on productivity at the very low end of the estimates prior to the HOS effective date, which were mostly in the mid-single digits and sometimes in the upper single digits. Our analysis finds the impact can in fact be at the upper end of specific long-haul routes, but is much less so on most shorter truckload moves. Those are still the majority of loads, so the average impact is relative modest - but not inconsequential for carriers. Look for rates increases on the lanes most impacted.



$1.4 Billion

Amount investment food giant Kellogg said this week it will spend through 2017 to optimize its global manufacturing network and turn a variety of regional services into centralized shared services. All told, the moves are expected save the company almost $500 million annually by 2018. Beyond the manufacturing changes, the "Project K" program plans other supply chain efficiency changes. Kellogg is just the latest in a slew of food and consumer packaged goods companies that are rationalizing manufacturing networks and transforming their supply chains, including a recent major transformation plan detailed at Kraft spin-off Mondelez.



Percent of US manufacturing workers that are older than 55, according to recent analysis from Thomas.Net. Fewer than 25% of factory employees are under age 30, in part as the youngest generation of workers has little interest in manufacturing jobs. Yet, even as unemployment rates remain high, almost 300,000 manufacturing jobs remain open - though most of those are for more skilled positions. The combination of a rapidly aging workforce and a shortage of skilled workers could really hold back US manufacturing growth over the next decade, a new article in Forbes says.



The number of workers contract manufacturer Flextronics urgently needed to staff a production facility in Malaysia in late 2012 to make cameras that would go into the new iPhone 5, according to a new article on Bloomberg's BusinessWeek. To meet that need, labor brokers went to Nepal to find the bodies needed to man the manufacturing lines. Many of those transplant workers were ultimately mistreated, sometimes excessively so, according to the article. That abuse included brokers charging the workers fees for the jobs at a level they simply could not overcome, and holding their passports so that they could not even return home, making them virtual slaves. Despite all of Apple's efforts, the offshore labor issues continue on.

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