Logistics

Minority-owned suppliers are important in the economic recover in the US and this belief is also shared by a number of large companies. Chrysler has announced that they are focused on encouraging dealer purchasing from minority vendors. In Southern California, Chrysler are match-making 40 Chrysler dealers with 67 minority-owned suppliers from across the state. The minority-owned vendors can supply dealers with a whole range of products from office equipment to information technology, construction, and training services.

Last month Sam's Club hosted a supplier fair for minority-owned vendors. The event was an opportunity to engage potential suppliers, strengthen relationships with diverse suppliers and identify product offerings relevant to club members. AT&T launched their Operation Hand Salute (OHS) program designed to mentor and develop Service Disabled Veteran Owned Business Enterprises (SDVOBE). AT&T spent $12 billion with certified diverse businesses which is 23 percent of the company's total spend. In the coming year AT&T has a goal to spend 1.5 percent of its total spend with SDVOBE's,

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Many companies are being pushed, or pulled, by their customers to improve the environmental impact of their supply chain. Large global retailers are under pressure from consumers and in turn they are demanding their suppliers abide by more stringent green requirements. The environmental news website mnn.com gives business owners some ideas how make their supply chains greener.

• Reduce Energy Usage - How many businesses leave lights on unnecessarily, or have ill fitting warehouse doors? By switching off items not being used, even small items, the energy savings can be significant in a large facility.
• Alternative Fuels - Businesses can reduce their carbon footprint by using hybrid or alternative fuels as well as save money. Warehouse forklifts and short haul delivery vehicles can be compressed natural gas (CNG) or electric to reduce greenhouse gases.
• Environmentally Sustainable Purchasing - A business can quickly become "greener" by ensuring that their own supply chain has vendors who have a good environmentally record.

Read more about the green supply chain here.

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Rollover crashes in trucks and buses cause the greatest number of fatalities and injuries. The National Highway Traffic Safety Administration (NHTSA) has proposed that all new trucks and buses should be fitted with an electronic stability control system (ECS) that will sense when a driver loses control and automatically applies the brakes to individual wheels to keep the vehicle stable and avoid a rollover. This type of system is required in passenger cars, sport utility vehicles and light trucks, as of the 2012 model year, but has been available in SUV's and many other cars for years.

The stability control system would help commercial drivers avoid skidding across icy or slick roads or keep control when swerving to avoid an unexpected object in the road. In addition the individual-wheel braking system counters over-steering and under-steering in trucks. Research into electronic stability control systems by the government concludes that up to 56 percent of rollover crashes each year could be prevented, which equates to 2,329 crashes, reducing up to 858 injuries, and preventing between 49 and 60 fatalities a year.

Read about commercial vehicles here.

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The Food and Drug Administration (FDA) are weighing in on the issue of companies that want to use nanoparticles in their packaging of food stuffs. A nanoparticle is generally considered to be less than 100 nanometers in diameter, 1000 thinner than a sheet of paper. Some nanoparticles are being found in FDA regulated products such as sunscreen and skin lotions. The FDA have now issued guidelines to food manufacturers indicating that they will need to provide additional data establishing the safety of any packaging that would contain nanoparticles.

Some companies are currently studying whether nanotechnology can be used in packaging to identify when food has spoilt or to even stop food from spoiling. The most popular area of nanotechnology for packaging involves polymer-clay nanocomposites, which embed nanoparticles of volcanic ash into plastics. These materials provide a barrier that can be used to keep carbon dioxide and nitrogen in a package, while keeping oxygen out, thus prevent oxidation and extends the shelf life of food. Other nanoparticles can remove oxygen from inside food packaging, and silver-based nanoparticles have also been proven to kill microorganisms, including some pathogens.

Read about Nanoparticle safety here.

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India is preparing itself for a bumper crop this year and with that news comes a problem. The Food Corporation of India (FCI) has publically raised concern that there is not enough warehousing space to store the 12 million tonnes of food grain that will be arriving during the first week of June. The FCI believe the main storage shortages will be in Punjab, Haryana, and Madhya Pradesh.

The food grain has been purchased by a government procurement program that is operated by the FCI. The corporation buys the grain at a fixed price plus any relevant bonuses, so the FCI knows how much grain will be arriving at its depots. The Indian government must act in some manner to stop the purchased grain from sitting in substandard storage or even out in the open. The government could distribute food grain to the poor, export some grain, or provide temporary storage before the June rains begin.

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How would you feel if your garbage bin charged you each time you threw in a bag of household waste? Well don't get too comfy because Earth911 is reporting about a new scheme in South Korea that uses RFID in a rubbish bin to weigh the waste put in it and then inform the depositor of the fee. The Korean government estimates that the nation of 50 million creates 170,000 tons of food waste daily at a cost of $1.5 billion annually. The government is aiming to reduce waste by twenty percent and this is where the new rubbish bin from SK Telecom comes in.

The new RFID enabled bin was displayed at an RFID show in April. The bin is opened when a user taps their public transportation card and they can deposit their waste, which is measured to the nearest gram. The RFID bin then reports the weight of the waste to the user along with the appropriate fee for disposal. The future for RFID rubbish bins could be rosy as the country is running out of landfill. Could they appear in the US or Europe?

Read more about RFID here.

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Running any ERP system can be a costly business. There is the cost of the software, the cost of the consultants to implement it, and the on-going maintenance costs so that you actually achieve the benefits of having an ERP system. But those support costs can be significant and in times of economic slowdown's ERP maintenance is high cost to be carrying. SAP, Oracle and the other large ERP vendors charge as much as 22 percent of the initial software price per year for maintenance, but there are vendors out there that say that they can supply just as good service at a much lower price.

Denver-based Spinnaker and Las Vegas-based Rimini Street are two companies that offer a wide range of support for ERP systems at a lower cost. Just recently Spinnaker has started offering SAP support to complement its support offering for JDEdwards.

Spinnaker and Rimini Street could be the way forward for many companies that find themselves in a situation where they need to find cost savings in IT without affecting performance and the business. Currently Spinnaker and Rimini Street have a small percentage of SAP users as clients, but if they can prove that their solution is just as good at a much lower cost there is no reason why more companies would not jump on-board.

Read more about SAP here.

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Is onshoring more than just media hype? The Boston Consulting Group (BCG) believe so and with the release of another report on US manufacturing they estimate that by 2015, China's cost advantage will have shrunk to the point that manufacturers will consider opening new plants in the USA. There are two main drivers for this opinion; firstly that the wage demands from skilled Chinese workers will continue to increase and minimize the delta that Chinese salaries have over US wages. Secondly if the cost of shipping from China to US and Europe continues to increase the costs will reach a point that no longer benefits Western manufacturers from having production in China.

The benefits of moving manufacturing back to the US include the higher productivity and higher quality of finished products. However if Chinese manufacturers can both increase productivity and produce quality products such as Japan, the US will lose the advantage and China will continue to retain or even increase the number of manufacturing jobs.

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The Institute for Supply Management (ISM) expects manufacturing revenue to increase 4.5 percent. The report from the ISM expects sixteen out of the eighteen industries to increase their growth for 2012. For non-manufacturing industries the predicted growth is even higher at 4.8 percent.

Capital investment in manufacturing is expected to reach 6.2 percent this year and manufacturing prices could rise as much as 2.3 percent, while for service industries prices could increase by 2.6 percent.

Production capacity in manufacturing is expected to increase 5.2 percent this year, with fourteen industries expecting expansion in capacity. Despite the expectation of increases this year, operating rate is still only 81.6 percent of normal capacity.

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A little nervousness can probably be felt in the boardrooms of pharmaceutical companies around the world after the Indian government decided to issue a compulsory license for an Indian company to manufacture a patented drug. The drug in question is Nexavar, a drug for drug approved for the treatment of primary kidney cancer and early stage liver cancer. The compulsory license allows Natco Pharma based in Hyderabad, to manufacture a generic version the drug, but must sell the drug at no more than 8,800 Rupees ($161 USD) for a months supply. The price that the patent holder, Bayer, was charging in India was 280,428 Rupees ($5,156 USD) for the same month's supply of the brand name drug.

The Indian government has defended its decision to issue the license to Natco, saying that under the World Trade Organization (WTO) agreement it could issue a compulsory licensing of a patented drug to ensure availability of patented drugs at affordable prices. The issuing of the compulsory license has led Mumbai based, Cipla, who manufactures a generic version of Nexavar, to lower the price of its product as well as other generic drugs that it produces. The US is worried about intellectual property rights (IPR) deficiencies in India and is hoping for an effective system in India for protecting against unfair commercial use.

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