Friday, July 21, 2006
Click here to go to biomimicry.net, the web resource for designers and others interested in learning how studying nature and applying its best ideas to industrial design can improve our lives.
Thursday, July 20, 2006
The Raw Edge
Just as international news is dominated by turmoil in the Middle East, business news is dominated by the high cost of raw materials, especially oil. As earnings reports come in to Wall Street, headline after headline after headline tells the tale of companies whose profits have fallen due to rising production costs, or of companies who turned bigger profits that would have been bigger yet were it not for increasing prices of raw materials.
According to a recent study by Virginia-based industry group Manufacturers Alliance/MAPI, the old trick of hedging prices isn’t working so well any more. Tom Stundza at Purchasing.com breaks the MAPI survey down:
So how are companies trying to cope with these costs if they're not hedging prices? IndustryWeek has some answers in an article for its August issue, "Rethinking Raw Materials".
However, the Manufacturers Alliance/MAPI survey of 59 of its member companies, generally large multinational manufacturers, found that a minority -- 46%--are hedging commodity prices. Of that group, only 4% were “very successful” in smoothing the buying prices of commodities, 54% had “limited success” with hedging and 42% claimed “moderate success.” Fifty-nine percent of all the member companies the alliance surveyed have had to add surcharges on products to try to offset at least some of the higher commodity prices. But success, again, was mixed....
First, companies are re-evaluating their spending strategies and making sure that different divisions of their business have good communication between procurement departments. Companies are sourcing more materials globally, and are also trying to lock in prices for the suppliers that make parts for them as well as their own operations for added buying leverage. Many firms, taking a page from computer manufacturers, are determining which materials can be recycled and reclaimed (IndustryWeek has another article devoted to materials recycling and greener product design here). Finally, the smartest manufacturers are bringing procurement into the system at the design level: purchasing agents are working with engineers to make sure that the materials used in products are not only the best available but also intelligently sourced and cost-effective.
Over at Grist.org there's an article describing how to green up the supply chain by showing the purchasing department the, uh, green. In the article an executive at a healthcare manufacturer explained to the purchasing department how switching to a slightly more expensive high-efficiency lightbulb would actually save the company money by significantly cutting energy costs. With less money spent on power (in this company's case, $50 million less per year), there's more of a cushion against other rising costs.
Your company can't change the political situation in the Middle East or stop the rise in the cost of metals. But your company's purchasing department can make a few changes to the way it operates to keep your company growing.
Monday, July 17, 2006
Updates on stories we’ve been following:
- Chinese auto company Nanjing (which bought the MG Rover brand and plans to open a new factory in Oklahoma) announces plans for the old Rover site in Longbridge, Birmingham: an $18.9 million investment that will probably only yield 200 jobs.
- Teams from GM and Renault-Nissan will conduct a 90-day review to determine the benefits and feasibility of a possible alliance among the three companies. Carlos Ghosn (CEO of Nissan and Renault) and Rick Wagoner (CEO of GM) issued a statement saying they were looking forward to the results of the review and that they were going to avoid further public comment until it was over.
- Airbus is still limping after delays to its A380 jumbo-jumbo-jet program prompted some of its top brass to resign. But the company is soldiering on, announcing a redesign to its A350 mid-sized aircraft and a full supply chain review for the A380. In related news, one of Airbus’s parent company’s major stockholders, BAE Systems PLC, is looking to sell its 20% stake in the company. And all this because of a few wires and a few suppliers who didn’t come through.
- After timid growth of 0.1% in May, US industrial production grew by 0.8% in June.
- The Manufacturers’ Alliance/MAPI expects industrial growth to moderate over the next three to six months based on results of its quarterly survey. It also looked at how its members are dealing with commodity prices, which IndustryWeek breaks down here.
- The G8 summit continues in Russia, but we don't know how much urgent trade business they'll get done, what with the recent escalation of violence in the Middle East.
Were You Going to Adopt RFID?
Today Hewlett-Packard revealed a teeny tiny new digital chip that stores up to 4mb (in current prototypes) and communicates with the outside world via a built in, eensy-weensy-teeny-weeny modem that transfers data at 10 mb per second—faster than a speeding Bluetooth. The chip is small enough (HP says “as small as a grain of rice”, but we prefer to think of it as “as small as two grains of couscous”) to be embedded in paper or on a sticker, and potentially, as storage capacity increases, could hold everything from text to photo to video information.
RFID tags are about the size of a coin, and only carry a code, which is then read by a transceiver and sent to a main computer. The computer then looks up the code and spits out relevant information, whether that’s a revised inventory figure (a warehouse), a bank account to debit (as in commuters’ EZ-passes), or a contact name and address (as under the skin of Zeno, eMvoy’s blogger’s office cat).
Memory Spot could store all that information and more directly on the product or label or animal that has been tagged. For warehouses and manufacturers, information about the product’s entire history—specific information about when and where the product was made (and by whom), what its expiry date is, etc., could be stored on the item itself. We’ll go out on a limb here and speculate that Memory Spot, because it can hold short video clips, photos, or pages of text, could even replace paper instruction manuals or instructional DVDs for products that require set-up or assembly.
Also, unlike RFID, the Memory Spot chips don’t require separate batteries or antennaes—HP estimates that the devices could initially cost about $1 each.
Finally, the boys at The Register note that
“At first glance, the technology sounds like some kind of glorified RFID chip, but there’s a world of difference between storing what is a souped up bar code, and a patient’s entire medical history, which presumably will include quite a lot of rather sensitive ID info.”
Finally, there's a tinfoil hat community of people who are very concerned—or in some cases very excited --about potential sinister Orwellian abuse of RFID. We can only imagine the reaction to the new Memory Spot technology.