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Supply Chain Matters 2013 Predictions- Honarable Mentions

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Today we completed all seven parts of our deep dives into our Supply Chain Matters ten predictions for global supply chains in 2013.  We trust that our readers will gain benefit and insights from reviewing each of the predictions.  As noted, we will monitor each of these predictions in the coming year.

Every year that we develop and assimilate annual predictions brings certain amounts that do not make it to the final cut.  These are predictions that merit a brief, honorable mention, which we address in this posting.

The following 2013 predictions were also on our mind:

Prediction: Another significant and costly earthquake event originating from Asia’s “Ring of Fire” disrupts global supply chains.

We read a mid-December commentary published in the Guardian Express  which notes that geologists believe that a 7.9 magnitude earthquake could hit the “Ring of Fire” sometime next year.  The “Ring of Fire” is an arc stretching from New Zealand, along the eastern edge of Asia, north across the Aleutian Islands of Alaska, and south along the coast of North and South America. The Ring of Fire is composed over 75% of the world’s active and dormant volcanoes and earthquakes. In its commentary, the Guardian Express noted that the U.S. Geological Survey had detected 176 earthquake events that occurred in just a four day period from December 15-18, while a 6.1 magnitude earthquake impacted Indonesia and a 7.3 magnitude earthquake impacted Japan in a single day.

We should also note that while we do not want to be depicted as alarmists, it is important for supply chain teams to be aware for potentially more major disruption in 2013.

 

Prediction: Additive and 3D Printing Manufacturing techniques gather even more momentum in 2013

The term “3D printing” was coined in 1995 but it was not until 2011 that interest started to pick up and 2012 was the year that ‘additive manufacturing’ really captured the imagination of manufacturing teams. 2012 was also the year that 3D printing became ‘affordable’ as serious attempts were made to simplify the design and printing process. A recent article featured on ExtremeTech notes that 3D printing to fabricate metal parts is now coming into the fold. The real breakthrough that has enabled 3D printing for the masses has been the laser, which can cut metal more readily. It also reports that NASA recently used a technique called selective metal melting (SLM) with great success to build rocket motor components out of steel. “NASA’s engineers have been able to produce parts with complex geometry only previously imagined, and with dimensional accuracy beyond that possible with traditional fabrication methods.

Increased adoption of additive manufacturing techniques brings true “mass customization” to manufacturing and supply chains, and 2013 may well be the year where more momentum gathers across multi-industry supply chains.

Prediction: Continued deep economic worries across the Eurozone countries cause more tough times and further needs for re-structuring among Europe’s automotive supply chains.

The entire automotive industry across Europe suffered from overcapacity before the onslaught of the current recession that is gripping Europe. The Wall Street Journal recently noted that the European Automotive Manufacturers Association recorded a 7.6 percent decline in Europe’s auto sales in 2012 while Moody’s Investor Service predicts a further 3 percent decline in 2013. Now the situation has worsened, European OEM’s will be forced to deal with realities. The situation is more complicated because various European governments have been resistant to mass layoffs and/or re-structuring, opting for economic stimulus to affected OEM’s.

Supply Chain Matters has already commented on Ford’s announcement to shutter European plants which was followed by General Motors Europe. France’s Peugeot has been hemorrhaging losses but the French government has resisted any further layoffs and restructuring. Fiat has taken a different track, cutting a quarter of its workforce in Poland while refitting some of its Italian based production plants to export more cars outside of Europe.  All eyes are focused on Europe’s largest automaker, Volkswagen.

There will no doubt that the upcoming year be another challenging year for Europe’s auto makers.

 

Prediction: Much needed and overdue consolidation occurs among global ocean container carriers in 2013.

The first signs of pending consolidation came just a few weeks ago with reports that two of Germany’s largest ocean container shipping companies, Hapag-Lloyd and Hamburg Sud, are engaged in talks over a possible merger of the two lines.  Supply Chain Matters, as well as other industry watchers are of the belief that the ocean container industry is currently anchored in way too much capacity and arrogance toward shipper needs. Hundreds of ocean container vessels lie idle without cargoes, as newer ships have subsumed current operating routes. With continued severe economic contraction occurring in Europe resulting in consequent slowdowns in China’s manufacturing export volumes, the writing is on the wall for industry consolidation to occur.   The open question is what impact such consolidation will have on shippers.  We believe, when the dust settles, there will be an overall positive impact for shippers.

We wish all of our Supply Chain Matters readers best wishes in 2013 and a Happy New Year.

Bob Ferrari

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