Supply Chain by the Numbers

- May 24, 2013

  Supply Chain by the Numbers for Week of May 24, 2013

Fastest Growing US Manufacturing Metro Areas; Rail Rates Keep Rolling Along; Now, Apparel Tragedies in Cambodia; GM Invests in Production Logistics



Number of manufacturing jobs that Houston has created since 2009. That was among the factors that led Forbes magazine to pick Houston as the top US metro area for manufacturing resurgence in the US, factoring in recent, mid-term, and long-term increases in manufacturing employment. The rest of the list in order is: Louisville, Seattle, Oklahoma City, Nashville, the Virginia Beach and Norkfolk area, surprisingly the Detroit metro area (no doubt driven by a revival of the US auto industry), Fort Worth, and Salt Lake City. Experts of course say each new manufacturing job creates 6 or 7 other jobs at suppliers and service providers to support the manufacturing operations and employees.




Level of rate increase that the large rail carriers were able to achieve in Q1, according to several of the four major US providers in recent earnings calls for the quarter. That 4% range is down a bit from the 5%+ level seen over the past couple of years in many quarters, but is still a healthy jump versus must other modes of transport. Those rates increases in part helped most of the rail carriers enjoy healthy Q1 bottom lines, with profits for the group up about 10% in aggregates despite a very soft market in terms of volumes. Union Pacific says continued rate increases plus further network efficiencies will enable it to drive in operating ratio down below 65% by 2017 - amazing.


Number of people injured at yet another apparel factory in Asia, as a rest area outside a factory in Cambodia owned by Hong Kong’s Top World Garment collapsed and fell into a pond. That followed three workers being killed at another Cambodian apparel factory accident a few days before. Notably, the factory where the rest area collapsed was doing work – perhaps on an unknown sub-contract basis - for Swedish retailer H&M, which just the week before had led the charge to create a new legally binding according among many Euro retailers and brands relative to safety in Bangladesh apparel sites. But as we commented at the time, that accord as well as Walmart own announced plan applied only to Bangladesh. This isn't over.


$44.5 Million

Amount GM announced this week that it will spend on a new logistics support facility at its Lansing Grand River Assembly plant in Michigan. The investment will be used to build a 400,000-square-foot building adjacent to the plant to sequence and assemble parts to make manufacturing more flexible at the site. "We’ve developed an innovative material strategy that increases efficiency and improves quality to benefit our customers, employees and the bottom line," a company executive said. We're curious to learn more, as these services were usually done by 3PLs for automakers in the past.