CEOs are demanding even higher levels of cost reduction from their supply departments. The across-the board average is 5.8%, according to a new survey by PURCHASING Magazine. Biggest second half price worry? Steel products. Most important cost-slashing strategy? Long-term contracts. See report on page 13.

Business spending is a casualty of the intensified focus on cost reduction. Many companies are putting the screws on all indirect spending in addition to outlays for capital projects. The economy won't begin to pick up steam until the business-spending engine begins to purr. One early indicator to watch is spending for IT. Many companies have extended computer life cycles 50% and longer. Computer spending may be the first item to break through the logjam.

Freight equalization is fast becoming a relic of the past in the steel buy. Integrated mills used to equalize freight to develop business in new market areas. Most of those mills are now bankrupt and new rules are being written. See story on page 36.

Companies across the U.S. are using strategic sourcing and supply chain management to cut millions—sometimes billions—from their annual spending for goods and services. For purchasing managers looking to participate in this trend, Strategic Supply Chain Management, co-written by renowned purchasing and supply management authorities James P. Morgan and Robert M. Monczka, is a must read. To order, go the bookstore.

Working on an e-procurement technology implementation? Go back the source! It may be old-fashioned (published in 1998), but The Systems Purchasing Breakthrough, by James P. Morgan and Ernest Anderson (the "father" of systems contracting) takes you through the logic of designing a paperless transaction processing system without sacrificing important financial controls. To order, go the bookstore.

Thermoset blues. Eastman Chemical and other producers are blaming recent increases in styrene costs for the planned September increase of 3¢/lb on market prices of unsaturated polyester resins. That's because styrene can make up 35-55% of unsaturated polyester.

Coated free-sheet paper producers want to boost prices for some grades by Oct. 1. If successful, the increase would be the first in more than nine months, as weak buying from producers and merchants have made prices tumble lately.