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Supply
Chain by the Numbers |
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- June 18, 2020 -
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Procurement Compensation Up Modestly in 2019; Rolls Royce Aviation Tells Suppliers to Cut Prices; Walmart Testing Stores with No Cashiers; US Manufacturing Down not Out |
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$123,226 |
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That was the average compensation for procurement professionals in 2019, according to the recently released annual salary report from the Institute for Supply Management, based on a survey earlier this year of 2700+ supply managers. That was up 3.3% from 2018, and includes annual pay and any bonuses or stock options. The numbers look somewhat different when viewed from median (half above, half below) versus average compensation. The median compensation in 2019 increased 3.6% to $106,000 - quite a bit lower than the average of $123,000 - up from $102,352 in 2018. Those at the top do very well, as always. The average compensation for chief procurement officers (CPOs) and EVPs was about $251,000 last year, and $229,000 for regular procurement vice presidents. “Emerging practitioners” pulled in almost $79,000 annually, while managers about averaged over $116,000 and directors about $161,000. However, continuing a trend found from the start of the annual survey, at all levels men make substantially more than women - about $65,000 less at the CPO levels.
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That's how many cashiers Walmart will have manning point-of-sales lanes at one of its stores in its headquarters city of Fayetteville, AR, under a test run currently in progress. While cutting costs is certainly a factor in the concept, Walmart says it is an attempt to see if checkout times are faster while limiting human interaction in the age of the coronavirus, in what SCDigest believes will be just one of many moves by companies using the virus threat as the reason for automating. Walmart of course has already been pushing self-checkout in many stores, with just a few checkout lines open much of the time. The program will expand to other stores if the test results are positive. However, Walmart says helpers will be available who will actually scan products for customers if they want at the self-checkout stations. Walmart recently launched a touch-free payment system also aimed at helping mitigate the spread of the coronavirus. |
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87.2 |
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That was the ugly level of the US manufacturing output index for May, in data released this week as every month by the Federal Reserve Bank. That means US manufacturing output was about 13% below baseline 2012 levels – though some pundits thought the number would be worse – and it certainly was much worse in some sectors. The index level was also 16.5% below the level in May 2019, though the number was a bit better than the 84.0 level seen in April. Surprisingly, US factory utilization came in at 75.4%, up nicely from 63.7% in April, and not all that much lower than the long run average of 78.2%. All told, the data show a wounded manufacturing sector for sure, but one perhaps not so weakened that it can't recover quickly if the virus threat is reduced. |
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That is how much aircraft engine maker Rolls-Royce is asking some parts suppliers to reduce their prices to the company for materials and components. That as the travel industry is in deep recession due to the virus outbreak, with aircraft orders plummeting and therefor also sales of new engines. Rolls-Royce is threatening to withdraw “support” from suppliers unless they agree to price cuts of up to 15%, according to the Financial Times newspaper in the UK. A letter has been written to many of Rolls-Royce's 700 global aerospace suppliers to demand price cuts of between 5% and 15%. “Now more than ever we need a n competitive supply chain,” Warrick Matthews, Rolls-Royce's chief procurement officer for the civil aerospace division, said in the letter, adding that “We will reward those who will work with us to help us take cost down with more business.” Some in the industry warned many suppliers, already seeing a great reduction in demand, would not survive price cuts added to the mix as well. But Rolls-Royce said the letters had not been sent to their biggest suppliers or those deemed to be most at risk. In early May, Rolls-Royce engine rival GE Aviation announced it was laying of some 13,000 workers, with plans to cut its total workforce by 25% globally by the end of the year in the face of a ugly order book.
