PURCHASING HOTLINE
By Staff -- Purchasing, 8/10/2000 2:00:00 AM
The worst may be over on price hikes.
The worst may be over on price hikes. A definite cool-down in consumer spending in recent months is translating into a little slower demand from American businesses, as shown in Purchasing's monthly business survey. Business remains at an excellent level, but is definitely a bit slower than the past few months. Experts say consumer prices should rise less than 1% through December. Impact of the energy cost bubble will also be behind us.
Fed chairman shifts rhetoric, suggesting possible end to interest rate hikes.
Fed chairman shifts rhetoric, suggesting possible end to interest rate hikes. When Alan Greenspan delivered remarks on July 11 before the National Governors' Association in State College, Pa., economists listened intently for some hint as to the future direction of monetary policy. What they noticed was a subtle shift in the chairman's rhetoric. Dr. Ed Yardeni, chief global economist and investment strategist for Deutsche Bank Securities in New York, observes that in September 1998, the Fed chairman delivered a speech titled "Is there a new economy?" In July, Yardeni says Greenspan "more boldly" titled his speech, "Structural changes in the new economy." Likewise, wefa Group economist Ronald Talley notes that, "While stopping short of explicitly avowing the existence of a new economy, Mr. Greenspan did refer to 'the old, pre-1990s economy,'"-a turn of phrase that "seems new for him as in the past he has been more skeptical about the new economy idea."
How do you become a purchasing strategist?
How do you become a purchasing strategist? "The true strategist always looks at the future and future change," says Jim Morgan, the editorial director emeritus of Purchasing Magazine in a brand-new book Plain Talk About Purchasing: Supply Issues for Realists. The book is a collection of insights into why purchasing does what it does and looks ahead at where it is heading in the new century. Cost: $37. Make check or money order in U.S. dollars payable to Purchasing Magazine and mail to Purchasing Magazine, P.O. Box 497, New Town Branch, Boston, Mass. 02456.
Titanium buyers should pay close attention to spot pricing for mill products this autumn.
Titanium buyers should pay close attention to spot pricing for mill products this autumn. Allvac, RMI Titanium and Timet all are unhappy about three years of decline in prices of commodity titanium products, which have slumped an average 35% since 1997. Note that aerospace ingot can still be purchased for around $5/lb these days, as opposed to list of $7.50. So, since long-term commercial jetliner orders are perking up this summer, these titanium mills are looking for any excuse to boost prices. Insiders pooh-pooh Allvac's talk of an 8%-10% increase in this year's fourth quarter, but there's always 2001.
Expect contract manufacturers' role to mushroom as their ranks thin.
Expect contract manufacturers' role to mushroom as their ranks thin. One source estimates that more than half of all electronics manufacturing will be done by contract companies in a few years, up from 20% now. Revenues for the largest contract manufacturers are growing at more than double the already robust 17% rate of electronics manufacturing this year. Motorola recently inked a five-year, $30-billion agreement in which Flextronics will manufacture 15% of its communications products. Meanwhile, the industry is very young and is changing rapidly. In the past year, there have been more than 50 acquisitions. Look for a few giants to dominate the business.
Tips on electronics' buying strategies.
Tips on electronics' buying strategies. Purchasing has a new book filled with insights. Electronic Buying Strategies examines such important areas as how to use supplier strengths to improve quality and cost competitiveness; the significance of outsourcing, contract manufacturing and build to order; the role of high-tech buyers in bringing new technology into their firms; the part that distribution plays in cost effectiveness; and the significance of supply-base consolidation. For your copy, send $26.50 plus $2.50 for postage and handling (check or money order) to Purchasing Magazine, P.O. Box 497, New Town Branch, Boston, Mass. 02456. For credit card orders call (617) 558-4348 (Amex, Visa and MasterCard accepted). You can also visit our Bookstore on Purchasing's Web site, www.purchasing.com.
Calling all e-procurement providers!
Calling all e-procurement providers! As a resource for its readers, Purchasing Magazine is creating a registry where e-businesses can describe themselves to the purchasing community at large. Focusing on net market makers (or "e-hub" owners), plus providers of e-procurement software, net market-making technology, and ancillary products and services, the registry will reside at www.purchasing.com. To join the registry, e-businesses must complete and submit a brief (PDF) questionnaire, which can be downloaded at www.purchasing.com.
Finances are tighter this summer for dot.coms because of the chilly climate on the equity markets.
Finances are tighter this summer for dot.coms because of the chilly climate on the equity markets. One recent casualty is FleetScape.com, an electronic marketplace for the trucking industry. The potential for the market wasn't large enough to attract new venture capital. ChemConnect, an online spot market for chemicals, withdrew an $80 million initial public offering because of market conditions.
E-procurement opportunities will mushroom, however, with or without major new venture capital.
E-procurement opportunities will mushroom, however, with or without major new venture capital. One example: Bayer, the German-based chemical giant, just announced it will spend 80 million euros ($75 million) annually for e-commerce infrastructure development. By 2004, up to 50% of Bayer's trade will be conducted on the Internet, the company says. Bayer Procurement Division already spends 8 million euros annually buying materials through an electronic catalogue. It is now being merged into a joint marketplace project named chemplorer, involving Hoechst and Deutsche Telekom.
Be prepared for some new push on air pollution controls, particularly if VP Gore wins the general election.
Be prepared for some new push on air pollution controls, particularly if VP Gore wins the general election. The EPA is studying new emissions standards on carbon dioxide but will likely stand pat without assurance of White House support. It's more probable that new emission standards will be set for mercury. A new National Academy of Sciences study confirms that mercury can harm fetuses and supports a drive to limit emissions. Upshot: More pressure on energy costs down the road.
Be sure to enter Purchasing's Welcome Booklet contest.
Be sure to enter Purchasing's Welcome Booklet contest. If you believe your welcome booklet does a superior job of explaining purchasing's goals and expectations, your booklet may be a winner! To enter: Put two copies of your company's welcome-to-purchasing booklet in an envelope. Be sure to include any inserts-lists of buyers, commodity assignments, etc.-that are used to keep booklets current. Enclose a business card or note indicating the principal author of the booklet. Send the packet to Welcome Booklet Contest, Purchasing Magazine, 275 Washington St., Newton, Mass. 02458. For full judging criteria, see contest story on page 28 of Purchasing Magazine's May 4, 2000, issue.
Do you think your company is a great place for a purchasing professional to work?
Do you think your company is a great place for a purchasing professional to work? If you do, we'd like to hear from you. In the Dec. 14 issue of Purchasing, we'll take an in-depth look at what makes a company a great place to work for purchasing pros, and we'll profile the best-of-the-best companies that readers and other sources nominate. To nominate a company for Purchasing's annual Best Places to Work List, call 617-558-4224, or e-mail dsmock@cahners.com.
There are still some hot spots in plastics pricing.
There are still some hot spots in plastics pricing. Producers of polyethylene terephthalate (PET) recently called for price hikes of 5¢/lb. In addition, Dow Chemical Co., Midland, Mich., has announced an increase of 8¢/lb, effective for the same period. This increase follows a 7¢/lb PET price hike during the spring. Seasonal demand from the summer beverage market boosted bottle-grade PET pricing. Prior to that, prices had eroded by as much as 3¢/lb in the second half of 1999 and the early months of 2000. Buyers estimate the current price of PET bottle-grade resin at about 62¢/lb.
Want to be up-to-date on the latest in non-traditional purchasing?
Want to be up-to-date on the latest in non-traditional purchasing? Get Purchasing's newest book, Strategies for Non-Traditional Buying. In it you'll read how non-traditional thinking is changing purchasing and get tips on buying a wealth of non-traditional goods and services that are increasingly coming under purchasing's domain-energy, office supplies, computers, software, telecommunications, travel services and more. Also included are sections that detail the role of procurement cards and the Internet in today's state-of-the-art purchasing systems. For your copy, send $40.50, plus $2.50 for postage and handling (check or money order) to Purchasing Magazine, P.O. Box 497, New Town Branch, Boston, Mass. 02456. For credit card orders call (617) 558-4348 (Amex, Visa and MasterCard accepted). You can also visit our Bookstore on Purchasing's Web site, www.purchasing.com.
PURCHASING HOTLINE
05/03/2000May issue of Purchasing now available
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