Key Metrics and Supply Alert
Staff -- Purchasing, 12/8/2005
- Greenpeace has called for an end to the use of brominated flame retardants in computer casings, solvents that clean circuit boards during the manufacturing process and polyvinyl chloride (PVC) used for cable and wiring. The environmental activity group points to Sony, which is starting to use a bio-based plastic made from genetically engineered starch as a PVC replacement. Meanwhile, computer and printer manufacturing giant Hewlett-Packard will eliminate the tetrabromobisphenol A, a brominated flame retardant, from external case parts of all new products introduced after December 31, 2006.
- Supply disruptions will increase over the next three years, yet less than half of 180 procurement professionals polled recently have procedures or systems to assess and respond to such risks. "Hurricane Katrina spotlighted the fragility of global supply chains," says Tim Minahan, author of a recent Aberdeen Group report on the subject. "Years of cost-cutting and lean operating practices have made businesses highly vulnerable to supply disruptions."
- The prevalence of outsourcing in electronics has resulted in companies losing control and visibility across their extended supply chain, creating increased risks, according to the results of a survey by Industry Directions of Boston and the Electronics Supply Chain Association. The results indicate that "outsourcers" (OEMs and fabless semiconductor companies) and their service providers have suffered a serious loss of visibility over their supply chain activities.
- The computer chip-equipment industry, which traditionally is marked by sharp peaks and steep lows, is coming out of a slump. But makers of chips have become more cautious about long-term spending and prefer leaner inventories, which has such analysts as WR Hambrecht & Co.'s Ray Kukreja predicting that the current machinery rebound will be steady but muted.
- Royal Caribbean Cruises has installed electronic purchasing technology to help reduce the $1 billion spent annually to deliver goods ranging from ship parts to food and drink to the 200 ports where its 30 cruise ships dock. Michael McNamara, director of strategic sourcing planning and automation, says the use of Ariba's software is designed to reduce purchasing and administration costs. "By taking a look at all the purchasing data, cleansing it and grouping it together, we plan to improve global supplier negotiations."
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