Evidence mounts for China recovery

China’s export volumes are forecast to accelerate in the second half of 2009 as clear signs emerge of rising manufacturing activity. Trading website Alibaba reported a recovery in orders from North America for Chinese exports in the second quarter and predicted fourth quarter shipments would at least equal those of a year earlier. The Purchasing Managers Index (PMI) produced by the China Federation of Logistics & Purchasing continued to rise in July reaching 53.3, up from 53.2 in June and 53.1 in May. July was the fifth month in a row the PMI had remained above the critical 50 mark, the threshold separating manufacturing contraction or expansion. China’s economy grew by 7.9% in the second quarter compared to 6.1% in the first quarter, and further acceleration is expected in the second half of the year.

Sri City launches new logistics park in Chennai, India

Sri City Pvt Ltd, who is developing South India’s largest private sector multi-product SEZ and Domestic Industrial Zone, has announced the launch of their exclusive 500 acre Logistics and Warehousing Park in Chennai. This 500-acre Logistics & Warehousing Park will form an exclusive zone in the 5,000 acres Sri City SEZ with an adjacent Domestic Industrial Zone. 250-acres is allocated in the SEZ for the development of a Free Trade Warehousing Zone (FTWZ) and another 250 acres in the domestic industrial zone to meet the requirements of the growing Indian market. Proximity to 3 Ports – Chennai, Ennore and Krishnapatnam and two international airports, Chennai & Tirupathi and access on National Highway – 5, sets the right platform for the development of this Park.

CFO’s Prioritise Cost Cutting Over Supply Chain

A recent report from Basware suggests that Chief Financial Officers in companies around the world are ignoring risk management in favor of cost cutting, and are failing to treat supply chain dangers seriously enough. The study showed only 28% of CFOs saw that procurement has a significant impact on financial risk exposure and less than half saw any level of integration between procurement and finance processes. Cost cutting was also seen as a major priority for CFOs in the study, with 64 percent stating that reducing costs was the top item on their agenda. At the same time, strategic goals were a much lower priority, with only 39 percent of CFO’s highlighting this. CFOs also admitted that only 42 percent of indirect spending was being captured by their organisations, and that only 50 percent of purchasing processes were automated, leaving major room for human error and inevitable waste of resources.

Companies require more focus on green impact of their supply chain

According to a new study by the Business Performance Management (BPM) Forum and E2open, it appears that operations, logistics and supply chain executives need a better understanding of how to go green and save green across complex, global, multi-tiered supply and distribution networks. Ninety percent of supply chain and operations professionals surveyed say their management subscribes to enhanced trading partner visibility, flexibility and sustainability across the entire supply and demand chain, yet nearly two-thirds have marginal or no visibility across all tiers and levels of their value chain. Even more concerning is the fact that 78 percent of companies rate the level of synergy and accountability in their global trading network as suboptimal. For more information and to download the new ECO-Operation report, please visit http://www.eco-opscenter.com/reports.php

Survival Trumps Profits, Supply Chain Growing in Popularity

The current economy has prompted many corporations to worry more about staying alive than making money, and supply chain management may be poised to become an even more important business practice than it is now, according to the results of a new CFO survey. The survey, commissioned by Basware and produced in cooperation with Indiana University’s Kelley School of Business and the University of Navarra’s IESE Business School, included finance officers in 550 companies in Europe and North America. According to the survey, 64 percent of respondents chose “reducing direct costs” as their main priority. Coming in second, at 60 percent, was “reducing indirect costs.” Few respondents, only 24 percent, chose “environmental practices,” and only 37 percent said “increasing profits” was a main priority in the next year.

Increasing indications of logistics sector recovery

From a range of indicators published in the past couple of months, the consensus seems to be that the recession has bottomed out. Air cargo volumes, for instance, do not seem to be getting any worse, stabilizing at around levels 20% lower than last year. However it is still very unclear when the recovery will start kicking in, and for any signs of positivity industrial and consumer retail figures are keenly watched. One of the most relevant indicators of future performance in the logistics sector is the level of sales in the semiconductor industry. Microchips are ever more present in a range of electronic goods – including washing machines, cars, office equipment and of course phones. The industry increasingly mirrors the performance of the overall economy and can give a good idea of future shipping levels.

Global Logistics Market rising optimism

According to the latest results of Transport Intelligence Global Logistics Business Confidence Index, it has shown a significant return of optimism to the market.  Although the index weakened slightly in April from +1.05 to -4.43, there was far more positive sentiment about the future. Overall, the index assessing confidence in the state of the market in twelve months time moved from a score of -26 in February to +4 in April. This contrasts strongly with the results in February and March when respondents expressed overwhelmingly negative expectations of the future. One of the key findings shows that logistics service providers are more optimistic than shippers. Given that manufacturers/retailers will have a better idea of order books and production schedules than their suppliers, the bounce back may not be as strong as some hope.

High growth forecast for China logistics industry

The new China Logistics Industry Report, 2008-2009 states that the development of China’s logistics industry in 2008 can be divided into two periods, rapid growth and decline. Rapid growth period: the total value of social logistics achieved a fast growth of 26.7% in the first three quarters of 2008. With the further influences of global financial crisis in 2009, China’s logistics industry will step in the period of slow growth and structural adjustment, which will create new development opportunities for the third-party logistics. Third-party logistics in China is still in its early development stage, and has a high regional concentration degree, mainly distributing in the regions of YRD and PRD. The Chinese manufacturers seldom select third-party logistics companies, while the foreign-funded manufacturers prefer the third-party logistics companies.

Companies Need More Supply Chain Visibility and Control

Companies don’t have nearly enough control and visibility over their network-wide supply chain operations and metrics.  That’s the major conclusion of a recent survey by The Aberdeen Group. In its report, “Integrated Demand-Supply Networks: Five Steps to Gaining Visibility and Control,” 71 percent of the participants 126 companies surveyed in February and March of this year indicated there were at least two supply chain tiers between them and their customers. According to Aberdeen’s survey report, this fact, along with the complexities of a growing global market, are contributing to a lack of visibility and control for supply chain managers. The survey indicates respondents and their companies were broken down into three categories: Best-In-Class, Industry Average and Laggards. Among other survey results, Aberdeen said Best-In-Class companies are more likely to have decreased the frequency of out-of-stocks, international lead times, and finished goods inventory over the past year than Industry Average or Laggard companies.

2008/2009 Employment Market Survey by Logistics Executive

Logistics Executive Recruitment is conducting it annual survey and would like to invite professionals in the industry to participate in the 2008-2009 Global Employment Market Survey. The survey will take 5-7 minutes to complete and your answers will remain completely anonymous. You will only be required to identify yourself if you wish to receive a complimentary copy of the final survey results. Your responses will not be directly linked to you as an individual. http://survey.logisticsrecruitment.com.au/display.php?s=901099c226b520248&inv=367128