Supply Chain by the Numbers

- Feb. 2, 2012


Supply Chain by the Numbers for Week of Feb. 2, 2012


Truck Weight Bill Measure Delayed; China's Huge Labor Resource Advantage; Shirtmaker Making Polos in US, Despite Much Higher Costs; Truck Drivers are High Growth Job Category -But Where will they Come from?



Vote in the US House Transportation and Infrastructure Committee Thursday to eliminate the inclusion of a new law that would have increased the federal truck weight limit to 97,000 pounds from the current 80,000, adding substantially to truck productivity, from the new Highway Surface Transportation bill. Instead, the Committee sent the issue back for further study. The Safe and Efficient Transportation Act (SETA) had not long ago looked likely to be passed as part of that larger highway bill, but hard lobbying by rail interests, and related Committee concerns about job losses due to greater truck efficiency (despite current driver shortages) and damage to roads and bridges from heavier trucks (despite the net damage would be lower due to taking trucks off the road) carried the day.




Number of days it took contract manufacturing giant Foxconn to come up with the 8700 industrial engineers needed to supervisor production of the then new Apple iPad in 2007 at its giant factory in what is now called Foxconn City in China. That according to a new article from the New York Times that looked at both the growing advantages of Chinese manufactures beyond pure labor costs, and the challenges Apple has to drive better working conditions in its supply base. An unnamed Apple executive said it would have taken at least nine months to find and hire that many IE's in the US. See Under a Microscope, Apple's Supply Chain Shows both Progress and Problems with Regard to Working Conditions in Asia - and the Challenges for Western Manufacturing.


What is costs start up shirt maker KP MacLane to produce its high end polo shirts in the US (Brooklyn, NY), versus the $1-2.00 they were quoted to have the shirts made in China - though those prices would have used a somewhat lower quality fabric. The China costs also represent unit costs alone before shipping costs and any costs associated with the longer supply chain (inventory holding costs, lost sales from being out-of-stock, markdowns, etc.). Of note: one New York City manufacturer refused to bid, saying it feared the KP MacLane founders would take its manufacturing design from the samples and simply bid it out to China, while other factories simply weren't interested in the relatively low volumes MacLane could initially promise. China factories were happy to bid. The nice looking shirts retail for $155.00, BTW.



The projected gain in jobs for truck drivers in the US by 2020, according to brand new projections from the Bureau of Labor Statistics, which says truck driving positions will increase by some 330,000 in that time. That puts truck driving as the number 8 fastest growing job category in absolute terms by the end of the decade. There's just one problem: we have a driver shortage right now of some 150,000 drivers, and while the BLS may be dead on in terms of the potential jobs available, it will take substantial wage increases to actually attract that many new drivers into the career. Costs, and therefore rates, are heading higher. BTW, warehouse type workers were number 9 on the list, expected to grow 15.4% to 319,000 new positions - and this is also an increasingly difficult position to fill.