Key Metrics and Supply Alert
By Staff -- Purchasing, 2/7/2002
- Leverage is a powerful way to boost your company's bottom line in today's economy. Emerson Electric of St. Louis expects to save $100 million over five years by coupling strategic sourcing to its Material Information Network. In steel bar products alone, Emerson has saved more than $500,000 annually by developing a common set of specifications and aggregating volume among divisions. The program has also allowed three divisions to share an oversized (by $300,000) inventory of electronic components at Emerson's Astec Power division. Aggregated volumes have also led to significant savings in reverse auctions.
- How good is your risk management? Last year's economic decline coupled with deflating prices left some companies extremely exposed due to their purchasing practices. Case in point: Ford last month was forced to take a $1 billion pretax charge to write down inventories of palladium and other platinum-group metals used to make catalytic converters. General Motors buyers, meantime, had used financial derivatives to hedge their risks on the pricey metals and reported no financial problem. Look for tips on risk management from Corey Billington, VP supply chain services at Hewlett-Packard, in PURCHASING'S Feb. 21 issue.
- Get the latest on the IT buy. PURCHASING'S newest book Best Practices in IT Procurement provides tips on buying computers and software more effectively. For your copy of the 142-page volume, send $44.95 plus $2.50 for shipping and handling to PURCHASING Magazine, PO Box 497, New Town branch, Boston, MA 02456. For credit card orders, go to www.purchasing.com or call 617-630-3799.
- Explore value analysis opportunities with polycarbonate. The high-flying engineering plastic hit a major road bump in 2001, dropping substantially in price as capacities mushroomed. Producers are pulling money out of capacity expansions this year and putting it back into applications development. Polycarbonate is a glass or metal replacement and is widely used in business equipment, medical devices and cars.
- More cargo electronic paperwork is coming from the Feds. Maritime Security Act of 2001 would require ships headed for U.S. ports to provide extensive information regarding ship and crew identification, routing, cargo description, ownership, and the operational condition of their equipment via e-mail. Critics have said that e-mailing this information only creates more security concerns.
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