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Earthquakes in Northern Italy- Supply Chain Matters Update Four

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Supply Chain Matters provides our fourth update concerning the series of strong earthquakes that impacted the Emilia Romagna region of Northern Italy in late May. Sadly, twenty-three persons lost their lives and an estimated €4 billion euros in damage was incurred by a series of severe earthquakes. In our previous update penned in early June, we highlighted that the impacted region included a biomedical production supplies district in Medolla and in nearby Mirandola where 90 factories that produce disposable medical items along with equipment for transfusions and dialysis. Reports indicated that the majority of these facilities suffered some form of damage. Published reports in both the Financial Times and London Telegraph indicate that Baxter Healthcare has warned hospitals and healthcare providers that potential supply disruptions stemming from the earthquake will limit some supplies of the sterile plastic tubes utilized in that company’s intensive dialysis treatment machines. The shortage will affect […]

A Changing Collection of Supply Chain Business Challenges for Ford Motor Company

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The following commentary is the author’s weekly guest blog appearing on the Supply Chain Expert Community web site. Experienced senior executives should know that given today’s more dynamic clock speed of business, the fortunes of any business and the consequent effects on that company’s supply chain can change rather unexpectedly. Thus are the current challenges facing Ford Motor whose stock closed yesterday at a level last seen two years ago. This proud, family legacy, automotive OEM was the only U.S. big-three automotive manufacturer avoiding bankruptcy and bailout in 2008-2009, and consequently was viewed as the success story of the U.S. automotive industry. Ford now finds itself dealing with some increasing high profile challenges in both business and product dimensions. Last week on the product front, Ford had to recall about 11,500 of its brand new 2013 Ford Escape SUV vehicles equipped with the 1.6 liter engine because of a serious […]

Separate Boeing 787 Dreamliner Engine Incidents Add Potential Supply Chain Concerns

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Potential supply chain related problems associated with the Boeing 787 Dreamliner production program gained much higher visibility today with the announcement of two separate incidents involving this aircraft’s powered engines, provided by two different engine suppliers. Today’s headline is that Boeing and U.S. safety officials are investigating an incident of an inflight engine failure on Saturday of a 787 being final tested for Air India. The incident sparked a subsequent grass fire at the Charleston International Airport which is adjacent to Boeing’s North Charleston final assembly facility. The engines of this aircraft were supplied by General Electric.  According to a published report in The Wall Street Journal (paid subscription or free metered view), the focus of scrutiny is on the rear components of the GEnx engine’s turbine sections. A GE spokesperson confirmed that debris exited the rear of the engine and was contained by the casing that surrounds the engine’s […]

UPS Reports Earnings- Confirms Structural Shipping Changes Underway

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In a Supply Chain Matters commentary posted about a month ago, we again pointed to both UPS and FedEx business predictions as good indicators of what we can anticipate in global supply chain activity in the coming months.  Both have staffed themselves with very talented economists and forecasters of business and supply chain activity with lots of reliable data gathered over the years. In June, FedEx CEO Fred Smith predicted that a fundamental change in global freight business is underway and could well change assumptions regarding transportation lead times and service levels.  In essence FedEx indicated that the airport-to-airport transport model is in decline, that suppliers, manufacturers and retailers are opting for less costly methods of transportation for movement of components and finished goods. Meanwhile, the explosion of online commerce is driving increased B2C activity for carriers. Earlier this week, UPS formally reported its fiscal second quarter earnings and UPS […]

Fiscal Third Quarter Results from Apple- What Does it Portend?

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If you are a close follower of Apple, or even if you are not, one cannot avoid this week’s large-scale coverage related to the announcement of the company’s latest fiscal June ending quarterly earnings. The business media bylines are numerous: “Only the second time in 39 quarters the company reported results that missed analyst’s profit and revenue expectations”- The Wall Street Journal “Apple is the world’s most valuable company, and the earnings miss was only the second time in 10 years.”- The Associated Press “Today’s Apple Earnings are All About the iPhone” – Bloomberg Businessweek Beneath the many bylines are results that many a company will envy these days, but unfortunately contrasted to previous spectacular results: Over a 22 percent increase in total quarterly revenues to $35 billion, with 62 percent originating from international sales. (down 59 percent from previous quarter) Profits up over 20 percent to $8.8 billion (down […]

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