Supply Chain by the Numbers

- May 11, 2018 -

  Supply Chain by the Numbers for Week of May 11, 2018

New US Drone Test Projects Unveiled by DOT; Oil Prices to Head Still Higher; New APICS Study on Salaries for Supply Chain Pros; Apple Keeps Auditing More Suppliers



That is how many state and local governments – along with specific technology partners – were selected by the US Department of Transportation this week for testing commercial drones, in what is generally agreed is testing that will push the edge of the envelope in drone flights. The tests range from evaluating people's tolerance for delivery devices hovering over their rooftops to ensuring farmers' drones won't hit crop dusters. The governments hosting the pilot projects are San Diego; North Carolina; Topeka, Kansas; Reno; Fairbanks, Alaska; the Choctaw Nation in Oklahoma; Virginia; North Dakota; Memphis; and Lee County Mosquito Control District in Florida. The program was pushed by President Donald Trump's White House as a way to speed approvals of more far-ranging unmanned flight operations. Notably, Fedex, units of General Electric, and Intel are participating in a team led by the Memphis airport that proposes flying beyond line of sight, at night and over people. They will deliver small aircraft parts in a designated area of the airport, inspect aircraft and provide emergency response. Also notable: Google and Uber are in – and Amazon is out of this round of testing.



That is where the price per barrel of oil is likely to reach in the first half of 2019, according to new estimates from Bank of America Merrill Lynch analysts. They also said it will not take much to push the price over $100. For this year, they forecast an average price of $70 for West Texas Crude, about where it is right now – though that is at multi-year highs, pushing gasoline and diesel prices way up, with gas prices back over $4.00 in California. There are a number of worries, Bank of America says, such as falling output in chaotic Venezuela, and the potential reduction in production from Iran as a result of new sanctions with the US withdrawal from the nuclear agreement. That while demand is increasing. World oil consumption should grow by 1.5 million barrels a day this year and 1.4 million barrels a day next year, Bank of America forecasts, the result of strong economic growth in most parts of the world. Interestingly, other reports note that US and foreign oil sources are reluctant to invest in more production despite currently high prices over fears the growing move to electric cars globally will soon depress demand.



That was the average salary for US supply chain professionals in 2017. That according to the APICS organization's inaugural annual study, based on surveys from 2600 supply chain pros. In addition, 90% of respondents received an average salary increase of at least 3% in 2017, and nearly all reported they are happy and likely to remain in the supply chain field. 96% of those surveyed reported high levels of satisfaction, with the average rating as 8.4 on a scale of 0-10. Strangely, possibly due to the current demand for recent supply chain graduates, the average salary for recent graduates is slightly higher than the salary level for those with one to three years of tenure – that we'll note, can lead to some HR issues. And this being APICS, the study of course found those who hold just one certification reported a median salary that was 19% higher than those who are not certified. Moreover, those with 2 or 3 certifications reported median salaries of 39% higher and 50% higher, respectively.



That is how many on-site supplier assessments Apple conducted worldwide in 2017 – using third party auditors – up from 705 in 2016. That according to Apple's recently released Supplier Responsibility Progress Report, summarized last week on our web site. Each assessed facility is ranked on a 100-point scale based on its performance relative to Apple's supplier Code of Conduct. A score of 90 to 100 is representative of a high performer. A score less than or equal to 59 is representative of a low performer. A score of 60 to 89 is representative of a medium performer. It seems to be working, as Apple says it increased the number of high-performing suppliers by 35% last year, while low-performers decreased by 71%, with much progress over time. After auditing those 756 facilities with nearly 1.3 million workers, Apple uncovered just two cases of underage labor. This is the 12th such report, but it was really seven years ago, after Apple received a lot of criticism for how workers were being treated at some of its suppliers such as contract manufacturing giant Foxconn, that Apple really upped its compliance game and the depth of the report, which set a standard of sorts for how this reporting should be done.