Friday, August 04, 2006


This Week In Blog: July 31-August 4

Here are a few of the items of interest we've found on other business- and manufacturing-related blogs this week:

On Wednesday, the writers over at the National Association of Manufacturers blog talked briefly to Senate Majority Leader Bill Frist (R-TN) about the energy bill that passed this week and tax reform. Click here to read's report.

We've found we can trust the NAM bloggers to report extensively on all matters legislative; they've got great personal access to lawmakers. Plus, they're more relevant to the manufacturing community than The Hill and funnier than the Congressional record daily digest, so if you follow what's happening in Congress (and you should: you hired everyone there and pay to run the place), bookmark Shopfloor as a great supplement to your reading.

On Tuesday, examined the recent climbs in material prices (and tightening supplies of same), and offered advice for riding out the rough conditions. We've waxed poetic about Supplyexcellence before, so we'll spare you further praise: just click here to read the entry.

Today, the has an entertaining story (click here to read it) about shipping container architecture. Writer Vikki Bell provides a number of links to stories about folks on the West Coast and in other port cities using surplus shipping containers to create commercial buildings or housing.

If you've seen anything worth reading, drop us a line (and a link) in the comments.

Thursday, August 03, 2006


Change of Boeing Strategy Prompts McCain Change of Heart

We won't say that Boeing is flying high (aerospace puns are beneath us), but they have had one heck of a summer. First their major competitor Airbus, hits serious turbulence with its super-jumbo-jet project, inspiring shrieking in the French parliament and the resignation of executives. Then orders for Boeing's commercial aircraft took off. Now, following testimony for an investigation into a possibly shady settlement with the government, Boeing's new management team is basking in praise from the company's former legislative archnemesis, Arizona Senator John McCain.

Boeing was under investigation by the Senate Armed Services Committee for breaking conflict-of-interest laws (the tale of a purchasing agent gone bad!) and for "improperly acquiring" information from competitor Lockheed Martin while the two were bidding on the Evolved Expendable Launch Vehicle project. Instead of facing criminal charges, the company agreed to settle with the government for $615 million.

New Boeing Chief James McNerney has announced that the company will not apply for a tax deduction on that payment. The very decent move (which inspired McCain's hosannas) will cost the company an estimated $200 million-- in fact, Boeing has posted its first loss in three quarters because of the fees. In addition to taking the hit on taxes, McNerney says Boeing will work to restore its reputation with the US Government and the American public by emphasizing ethical behavior among its employees. In written testimony, McNerney said:
"Coupled with the loss of $1 billion worth of Evolved Expandable Launch Vehicle business and the huge toll these matters have had on our reputation, the settlement serves as a stark reminder of the direct impact that unethical conduct can have on our bottom line."
A Senate Committee that may have possibly... gotten results? We thought that only happened on The West Wing.

Prototyping: News From the World of R&D

On Thursdays, eMvoyblog looks at new advances relevant to industry and industrial technology. It makes us feel all Tomorrowland inside. This week, however, the theme seems to be "It's A Small World", as researchers all over the place wrap their heads around the tricky business of making big things smaller.

First up: we're not surprised to see that Georgia Tech is in the news again, this time with new, super-small sensor components that could lead the way to sophisticated "lab-on-a-chip" technology. This new development could potentially make it easier for law enforcement officers or emergency responders to conduct on-the-spot blood tests (among several other applications).

The breakthrough revolves around a component called a wavelength demultiplier. When struck by different types of light, the wavelength demultiplier splits them apart so that other components in the sensor can make sense of the various signals. Wavelength demultipliers control the light with photonic crystals, little structures etched into silicon. What the GT researchers have done is rearrange these teeny tiny crystals and make them teeny-tinier: we're talking 1 millimeter in all directions. Smaller wavelength demultipliers mean more room on the sensor for other components, allowing more processes to be carried out on one chip.

Even cooler: the project's lead researcher says the new smaller components won't change the cost of manufacturing the sensors.

Sources: The Register, Georgia Institute of Technology

Staying on the subject of chips, we turn now to France, where developments in microelectronics appear to have merged with Japanese cuisine, and could soon help power your computer. News@Nature reports that scientists at the CNRS Research Center for Divided Matter have determined that the ideal material for making electrodes used in supercapacitors is... burnt seaweed. Really.

Definitions may be necessary for those of us who don't work with electrical components. So: capacitors are electrical components that store electricity from a power source and then either discharge it in a burst (a la your high-powered camera flashbulb) or even out the flow in case of a power disruption. Supercapacitors, obviously, store a whole lot of electricity, and their electrodes are made from carbon.

The form of carbon commonly used in supercapacitors at present is activated carbon: it's cheap, but it's not very densely packed, which means you've got to use a lot of it if you want to hold enough charge. With electrical devices getting smaller, that won't fly. So the French team went hunting for a better, denser form of carbon that could make smaller supercapacitors. They started by looking at plants, and found that a component of seaweed, called alginate, had the best properties. From the News@Nature article:

The French team cooked alginate in an air-free enclosure, turning it into a black powder. They then combined this with a polymer binder to make a hard material, which they shaped into electrodes for supercapacitors.

The amount of electrical charge and energy that these devices can hold is comparable to that of capacitors made from commercial activated carbons. But the seaweed capacitors can be charged to voltages twice as high without breaking down, and the material is twice as dense. They hold up well over time, too: their charge-storage capacity declines by only 15% after 10,000 cycles of charging and discharging.
So there you go: seaweed can handle high voltages and be minaturized more easily. The CNRS team is in talks with a company interested in putting the new electrodes into commercial production, so you may have a kelp-based emergency power source in your next laptop. Behold the power of the sushi wrapper!


Finally, Penn State physicists have discovered a new way to pack granular materials more tightly together: alternately heating and then cooling the contents. Every time the items in the container are heated, they expand, and then when cooled they contract and settle tighter together in the container. While the researchers involved declined to list any practical applications for their discovery (they used plastic containers with glass marbles inside), the technique could be useful in agriculture: it's not possible to just pick up a grain elevator and tap it on the counter, the way you do when you're filling the sugar bowl and need to fit a little more in.

Source: Nature Magazine, via The New York Times

Wednesday, August 02, 2006


The Big Buy: Week of July 31-August 4th

If you've been reading regularly, you might have noticed that we at love purchasing agents.

But we haven't made ourselves perfectly clear, so bear with us while we indulge in a little verbal couch-jumping: We love purchasing agents, with a passion bordering on the unwholesome. To us, they are not paper-pushers who hassle the office about the cost of Swingline staplers. No! Intelligent purchasing agents are industry's protection against the rough tides of materials costs and the first line of defense against waste. They're the early adopters of innovative new products, investigative problem solvers scouring the world for the goods and services that make what your company produces longer lasting, higher quality, and more profitable.

With that in mind, we're introducing a new feature on the blog this week: The Big Buy. Every Wednesday we'll look at issues pertinent to the purchasing agent, that unsung hero in your back office, and try to highlight the best analysis and information available on the web. Feel free to speak up if you think there's something we're missing.

Here we go:

First, the proposed GM-Nissan-Renault alliance (which is still in the midst of a 90-day review, remember) seems to have one major thing going for it: its potential to increase the three automakers' purchasing power. looked at the alliance from this angle late last week ("GM, Renault-Nissan Alliance Could Focus on Joint Purchasing"), citing a Bloomberg report (one we couldn't find, as hasn't got the friendliest search function) which stated that Renault and Nissan have cut $868 million annually through a joint procurement effort. While golden boy Carlos Ghosn has said he won't necessarily ask GM to join the combined purchasing program if an alliance goes through, writer Jack Lifton at Resource Investor thinks such an arrangement could be good medicine for GM.

In an article tellingly titled "The 1976 Prediction of the Commodity Boom That Started in 2000", Mr. Lifton digs out a thirty-year-old survey conducted by officials at the Bureau of Mines of the U.S. Department of the Interior. The survey examined worldwide supply and demand trends for metals and minerals important to manufacturing. The authors concluded that as demand for such materials rose in the US, it would also be rising around the world as other economies began to pick up speed; competition for those resources would become increasingly heated and costly. In other words, says Lifton:

The industrialists of a country like France or Japan [which always imported their minerals--Ed.] have always needed to be aware of strategies to insure a supply of strategic raw materials. Not only the businessmen but also the politicians of every wealthy nation other than the United States see the necessity of long-term planning.

The American OEM automotive industry is now paying the price for ignoring the information that has been right in front of it and of assuming that our politicians would take care of any raw materials shortcomings by seriously maintaining both a strategic stockpile and an economic risk management model for industrial crises and emergencies as Japan, Korea and the world’s newest major supplier and user of strategic materials, The Peoples’ Republic of China, do.

In other words, had US automotive manufacturers heeded warning signs and adopted longer-range planning with regard to sourcing and purchasing key materials, they would not now be in such a fix with regards to costs. He's therefore bullish on a GM alliance with Renault-Nissan, because both those companies come from a procurement philosophy that emphasizes the long view.

The deadline for review of the alliance is October 15th. We'll be following the story.

Speaking of insanely expensive metals, the cost of copper has doubled since 2005. It peaked in May and slid back slightly, but it's about to go higher again (which should make thefts like these even more common). Due to labor issues and mine disruptions (a/k/a landslides), copper production in Chile has hit a stumbling block. Workers at the Escondida mine, which is the world's largest, have voted to strike over a pay raise dispute. Some analysts think that a serious break in production could send copper back up to the record price set on May 11th: $8,800 per metric ton. Electronics manufacturers, look out.

Also of interest in re copper: "Obscure Economic Indicator: The price of copper", a 2005 piece by Daniel Gross (via Slate), explains the ubiquity and importance of this metal in pretty much every aspect of manufacturing.

Going back to electronics manufacturing: it's been one month and one day since the European Union's Reduction of Hazardous Materials (RoHS) directive went into effect. says this has led to shortages of not only RoHS-compliant components, but also of pre-RoHS components containing lead or other restricted materials. Some suppliers are stockpiling the non-compliant parts because they think there may be an increased demand for them once production ceases altogether. Tim Minahan's Supply Excellence blog has an analysis of the scramble to stockpile and/or sell off leaded electronics components in the wake of RoHS. You can read that article by clicking here (Supply Excellence is in our bookmarks list, and should be in yours too).

That's it for this week's edition of The Big Buy. As always, we're interested to hear how the issues discussed on eMvoyblog are affecting you and your company. Are you rethinking the way you source metals and minerals? How are you coping with rising costs? Are you affected by RoHS's impact on electronic components supplies? Leave a comment.

Too Late for Tuesday, But Worth a Read

This morning we found a Christian Science Monitor article that, had we been a little sharper on the stick, we’d have posted with yesterday’s Energy and Environment news roundup. “Gasoline’s Fledgling Rivals: The Race to Power Your Car” (or, in the case of your company, fleet of trucks) looks at the various alternative fuels currently jostling to take the place of increasingly expensive oil. The contenders are:

The article lays out (and also offers a handy chart delineating) the current costs, advantages, and disadvantages of each potential fuel source, as well as discussing which companies and countries might stand to benefit from a shift away from gasoline. With all the alternative-fuel news flying around the media nowadays, we found it cleared a few things up for us.

Tuesday, August 01, 2006


Update: California-UK Partnership (sort of)

We're still trying to find some hard evidence to back up Arnold Schwarzenegger's statement about improving the environment and growing the economy, but in the meantime, we found some fluff while Googling.

Gossip blog has an entry about Arnie's offer to let Tony Blair have a part in Terminator 4. They've got the perfect name for the new partnership: The Funny-Accented Coalition for the Environment. (FACE? Whatever, we love it.)

Energy and Environment News

It's Tuesday, so that means we're looking at the latest news regarding energy and the environment as they relate to manufacturing.

First, we must plug the Chicago Tribune's feature articles published this past Sunday: "A Tank of Gas, a World of Trouble" looks at the petro-economy in detail, from the geologists to oil-company executives to soldiers in the Middle East to the employees at an Illinois gas station. The reporter, Paul Salopek, is a Pulitzer Prize-winner who spent a year on "oil safari" to track the origins of the gasoline in his tank. The result is really great journalism (and the website has some multimedia features as well).

Next, electronics giant Sony has signed on with the World Wildlife Fund's Climate Savers Program, taking a pledge to reduce its carbon emissions 7% by 2010. Part of the strategy involves switching from coal and oil to cleaner-burning natural gas. Coupled with a recent expansion of its computer and battery recycling program, Sony has added an extra coat of green to its reputation.

Speaking of natural gas, the US has it in abundance and its production is less attritious to the environment than plain ol' petroleum gas (our main qualm at eMvoy is that it's not renewable). Most of it is locked up under our seabeds, and yet as energy costs climb, our elected representatives continue to kick around a bill that would open up more off-shore drilling for the stuff. One bill cleared the Senate today with a free and clear majority: MarketWatch has the details.

Speaking of alternative fuels: sidestepping the Federal Government (though of course he says he isn't), California Governator Arnold Schwarzenegger has made a deal with the UK to jointly fund research into renewable energy and also look into creating a trans-Atlantic carbon trading market. "You can protect the environment and you can make sure the economy grows without any problems: we have shown that here in California," said Schwarzenegger. (Um, has he? Anybody care to comment on that assertion? We're digging into figures and will update about facts behind this statement later.)

Currently the only international carbon-trading treaty is the Kyoto Protocol, in which the US is not involved (mainly because China and India, two major polluters, aren't signed up either). Some eastern US states are swapping among themselves, and there's also the Chicago Climate Exchange, which is a private carbon-trading-reduction market.

And finally, from the annals of weird science (courtesy of The Register, who else?), a climate researcher has suggested that we could neutralize the greenhouse gas effects of carbon dioxide by bombing the atmosphere with sulphur. Evidently the sulphur particles would reflect sunlight, allowing the earth to cool off a little-- this has been observed in nature when volcanoes erupt. And golly, that sounds swell at first, until you realize that sulphur is a key component of acid rain, which we've spent many years trying to eliminate.

August Already?

Yes, it really is August 1st, and that means the Institute for Supply Management has posted its manufacturing index numbers for July. While raw material and energy costs took a chunk out of manufacturing companies' margins, the manufacturing sector continued to grow last month: higher orders in June led to more production in July. The ISM's index went from 53.8 in June to 54.7 in July (anything over 50 means the economy is generally expanding). Does your experience tally with the ISM's report? Feel free to leave a comment.

Actually there were a number of headlines today about the resilience of the manufacturing sector in the face of a general economic slowdown. The slide in the dollar has probably helped by making US products more attractive abroad. An increase in orders for aircraft may also have contributed. (Boeing had a nice July, as we all know).

What's weird is the employment numbers: the ISM says "employment expanded", while IndustryWeek says not so much: manufacturing tacked on 15,000 jobs in June, but early reports indicate it lost 20,000 in July. However, those losses may be skewed by the GM buyouts, which affected some 30,000 people.

Whatever the reason for the July numbers (and whatever those July numbers eventually turn out to be), we can already put 2,000 jobs in the "loss" column for August: Eastman-Kodak has announced it's going to cut that many employees from its payroll.

Kodak has been stung by the transition from good old celluloid film to digital photography: the AP reports that while Kodak's digital division posted a 6% increase in sales, its traditional photography division (film, papers, and chemicals) dropped 22%. (And part of this is due to raw materials prices: see the company's press release here, which mentions the cost of silver causing problems.)

That makes sense to this blogger: I can't remember the last time I took a roll of film to a store for processing. Using a digital camera and Photoshop has made me and everyone I know much more attractive.

Monday, July 31, 2006


401Ks...They're Grrrreat!

We saw these headlines and had to comment:

Ford to Put 600K Toy Cars in Cereal Boxes


GM and UAW Support Pensions Bill

Couldn't they combine the two by putting a pension in every 600,000th cereal box? It might reduce their costs a little more.

By the way, the car Ford is promoting via Kellogg is the Fusion, which (if you look at the link) is clearly being marketed to women and parents. It gets good gas mileage, so it's thrifty! It's kind of stylish! We're cross-promoting with Elle Magazine! And we mention a Yoga instructor in the ad copy!

While cereal-purchasing moms will notice the car's image, will it make that much of an impact? And will kids really say, "Mom! I want us to have a Ford Fusion just like the one I found in my Froot Loops"?

Economy Buzz: Just Another Manic Monday

While you were enjoying your weekend (you did, didn't you?) the media got itself all worked up about a slowdown in the growth of the US economy. During the first quarter of 2006 the economy chugged along at a very healthy 5.6% (possibly a rebound from the dismal, hurricane-stricken Q4 of 2005, when growth was only 1.8%). This past quarter growth was only 2.5%. Culprits include inflation, consumer confidence, the housing market, and (but of course) increased energy costs. The dollar also dropped in value, which (as we've mentioned before) is good for manufacturing, but only to a point. The International Monetary Fund (AFP via Yahoo! News) says that the US economy should glide to a soft landing, but that recession is still a possibility if things go splat in the housing market.

Speaking of which, the weekend press concentrated on the housing market slowdown (AP via Yahoo! News). If you want a deeper understanding of the numbers quoted you can read this post at Econbrowser which demystifies the "seasonally adjusted" qualifier on the housing numbers.

Other numbers that mean something different once you investigate them are the unemployment numbers. Currently unemployment in the US stands at 4.6%, which sounds nice and low, but that only counts the number of people who are:
Unemployment benefits typically expire after six months. Estimates about the actual number of unemployed in the US vary.

Related to this bit of information is an interesting story in the New York Times: "Men Not Working, and Not Wanting Just Any Job". It's about men in the prime of their lives who, after being laid off, are refusing to take jobs that don't pay enough or for which they're overqualified. Profiles in the article include an ex-computer engineer, a former steel mill worker, and a reformed ex-con. It raises a few interesting questions: how often can a person reasonably be expected to re-train him or herself to switch careers? How much talent and experience is going to waste because employers won't hire older workers who've been laid off, or younger workers who've been laid up?

Heavy stuff for a Monday, we know, but you should have had your coffee by now, so feel free to discuss.

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