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Supply Chain by the Numbers

- June 11, 2015 -

  Supply Chain by the Numbers for Week of June 11, 2015

China Rolling Out Factory Robot Army; Patagonia Trying to Wipe Out Modern Slavery; Are Longer Truck Limits Coming? Amazing US Ascendance in Oil and Gas Production



That is the percent of factory work that contract manufacturing giant Foxconn plans to automate in the next three years, according to a new article from the New Your Times. It already has a near fully robotic factory in Chengdu. Meanwhile, Midea, a leading manufacturer of home appliances in the province of Guangdong, plans to replace 6,000 workers in its residential air-conditioning division, about a fifth of the work force, with robotic automation by the end of the year. "Chinese factory jobs may thus be poised to evaporate at an even faster pace than has been the case in the United States and other developed countries," the article said. We are seeing a sea change in robotics right before our eyes.




That's how much money foreign workers sometimes had to pay so-called "labor brokers" to land jobs at apparel shops in Taiwan making clothes for Patagonia, according to the company this week. It could take as long as two years for the workers to pay off that fee, leaving them in a form of indentured servitude and "modern slavery," according to the company. It hopes to end the practice with a new set of supplier standards, effective June 1, which for example mandates that no workers must be made to pay recruitment fees, and that if there are such costs the factories have to pay them fpr the workers. The priority will be for the suppliers to directly hire their own employees, rather than go through brokers, the company also said. "It turns out this is an issue plaguing manufacturers of all kinds in many industries, and for Patagonia, it became an urgent priority to fix it," said a company spokesperson.


That would be the new allowed length of twin truck trailers on Federal highways, up from 28-feet, in a new bill passed in the House this week that funds transportation spending for just one year. However, a similar provision that would allow heavier trucks - up to 97,000 pounds with an additional sixth axel/brake - did not make it in. This after just last week the US Dept. of Transportation said in a Congressionally-mandated study that there was not enough data to really judge the safety and other impacts from longer and/or heavier trucks, and so no changes should be made. Looks like the House didn't take that advice when it comes to length, at least. The Senate still needs to approve similar language and President Obama has to sign it for the bill to become law. The House bill also again extends the suspension of the 34-hour restart rule in the latest FMCSA hours of service regulation, pending more study.



Somewhat astoundingly, the percent of US energy consumed in 2014 that was produced here, according the just released BP Statistical Review of World Energy 2015. That's up substantially from just a few years ago, as the fracking revolution in oil and gas continues on. Along the same lines, the BP report says that last year the US overtook Russia as the world's largest producer of oil and gas combined. That move included raising oil production by an impressive 1.6 million barrels per day, the third consecutive year that the level of growth in the metric was 1 million of more barrels per day. US production had the major impact in dramatically falling energy prices in the last half of 2014 the report says, though US production is said to have been cooling so far in 2015 as a result of the price declines.

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