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Severe Congestion and Paralysis Among U.S. West Coast Ports- Supply Chain Matters Update Four

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In last week’s Update Three commentary regarding the current crisis involving the near paralysis among the U.S. West Coast ports of Los Angeles and Long Beach, Supply Chain Matters highlighted that conditions on the ground were not showing any signs of improvement.  As this week draws to a close, the situation appears to be deteriorating even more, and now involves clear impacts and continued disruption for both U.S. exports as well as imports. Last week, the National Retail Federation (NRF) published an editorial with the statement: “The sudden change in tone is alarming and suggests that a shutdown of the ports — either from a walkout by labor or a lockout by management — is imminent.” The NRF has since been joined by other industry associations  including the National Association of Manufacturers (NAM) the U.S. Chamber of Commerce, and 60 other organizations representing agricultural growers. Agricultural exports such as apples, […]


Added Visibility to the Challenges of an Apple Supplier- The Increased Importance of New Product Information Integration

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Supply Chain Matters has featured a number of commentaries regarding the perils and pitfalls for being an Apple supplier.  Our commentary in early October reflected on challenges at Foxconn and the sudden bankruptcy filing of sapphire glass supplier GT Advanced Technologies. Subsequent information has come to light from the unsealing of information filed in relation to GT Advanced Technology’s bankruptcy. Embedded in these reports are important insights on the increased importance of more timely integration of new product introduction information across the extended supply chain business network. This week, The Wall Street Journal Digits blog (paid subscription or free metered view) featured its own commentary regarding the lessons of being an Apple supplier. The WSJ was successful in gathering specific responses from other Apple suppliers including Pegatron and Wintek. Regardless of the significant customer demands, suppliers do not turn away from Apple’s business because it provides scale, volume and the […]


Significant Announcements from SAP

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There has been some noteworthy news regarding enterprise technology provider SAP. Yesterday, the business software provider made a significant announcement regarding its marketing leadership.  SAP appointed Maggie Chan Jones, a former Level 3 Communications and Microsoft marketing executive as Chief Marketing Officer (CMO). The news release cites her extensive cloud technology marketing experience as important for the renewed emphasis of SAP’s marketing efforts. Ms. Jones will be based in SAP’s Global Marketing office in New York City. Former CMO Jonathan Becher has been appointed to the new role of Chief Digital Officer.  Becher will lead a new business unit to expand entry into new areas of digital content and data.  With this change, SAP will combine its existing online stores into one SAP Store where prospective buyers can discover, buy, download or upgrade software, services and content. By our Supply Chain Matters lens, these moves indicate a far more aggressive […]


Boeing Initiates Multi-Billion Long-Term Supply Agreement for Carbon Fiber Composite

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Multi-year supplier contracts often are associated with the need for strategic direct materials. For large enterprises that have the financial resources, they can well provide a source of industry competiveness or edge in supply. A prime example is provided in aerospace industry as Boeing has just announced a memorandum of agreement with Japan’s Toray Industries for long-term supply of carbon fiber composite material. Once finalized, this contract extension will take effect in 2015.  According to one syndicated report, the contract is estimated to have a value of $8.6B. This ten year supply agreement represents by Boeing’s words, a significant increase in material provided by Toray. It includes expanded material supply for Boeing’s ongoing 787 Dreamliner production program along with provisions to supply wing structures for the new 777x aircraft development and production program. According to the announcement, the wingspan of the planned 777x measures 22.8 feet longer than the span […]


Severe Congestion at U.S. West Coast Ports- Supply Chain Matters Update Three

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We are a mere two weeks before the Black Friday holiday shopping kick-off, and a mere six weeks before the actual Christmas holiday and the severe congestion that is crippling U.S. west coast ports essentially remains the same. In last week’s Supply Chain Matters commentary we described what many are calling the “perfect storm” of supply chain disruption. Another week later, the crisis is cascading across industry and transportation channels, affecting both imports as well as time-sensitive exports.  An NBC News broadcast  in the U.S. notes that as of yesterday, 13 ships are anchored off the coast waiting to be unloaded and describes container shipping at “full stop”. While that may be a bit of journalistic sensationalism, it is descriptive. The on-the-ground realities seem little changed from last week’s situation. Public finger-pointing among the ILWU labor union and the Pacific Maritime Association (PMA) has become a public spectacle vs. any […]


Maersk Reports Stronger Earnings but Continued Industry Warnings

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This week, AP Moller-Maersk, parent of global leading ocean container shipping line Maersk reported rather positive Q3 financial results. For the third quarter, the shipping concern reported an overall net earnings increase of 25 percent on flat revenues. However, Maersk did take the opportunity to once again warn its investors of a continuing slowdown in global trade. Financial highlights for the Maersk Line unit included revenues of $7.1B and profits of $554M. Return on invested capital was 13.5 percent compared with 10.9 percent a year earlier. Volumes increased by 3.7 percent, average rate increased by 0.9 percent while unit costs decreased by 0.9 percent. Fuel costs decreased 2.4 percent from the year earlier period. According to reporting from the Financial Times (paid subscription or free metered view), aggressive cost cutting and lower use of fuel has made Maersk Line the most profitable in the industry. The publication notes that current […]


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