eMvoy Blog: What's New in US Manufacturing Competitiveness

Additional info about using eMvoy search and company rank

2006-10-31T13:21:00.000-06:00

More about the eMvoy Score

The eMvoy Score is a new system that calculates a score for manufacturing companies by evaluating 24 different quality, reliability and stability factors. Companies are then assigned a ranking from one to five, which rates their competitive ability.

Industry professionals can use the eMvoy Score to quickly evaluate a manufacturer.

For more information, see our guide to the eMvoy Score.

What information is available on eMvoy.com?

The eMvoy Score

The eMvoy Score is used to quickly and easily evaluate manufacturing companies. Many companies are already rated with a score from one to five.

For more information, see our guide to the eMvoy Score.

Full-text searching

eMvoy.com features full-text searching. This means that our automated technology indexes the content of web sites that appear on our search results. Although we're a specialized score system and search engine for manufacturing, our technology is very robust and similar to major search engines in this respect.

You can search eMvoy.com the same way you search other search engines: by typing in your query. There are no complicated search forms or login requirements. Just type what you're looking for into the query box and click Search.

Score searching

You can use our How do they score? feature on the main page to type in a company name and find its eMvoy Score.

Editorial and Technical

eMvoy.com combines full-text searching technology with editorial know-how. In addition to the information we gather from your web site, our editors carefully choose keywords for your site, designate your company type, pick your Primary Products and ensure accuracy of our data.

The eMvoy Score is calculated based on 24 different quality, reliability and stability factors.

Company names

For most web sites, we display the company name as the clickable title in our search results. This important piece of information helps users find the companies they're looking for faster and easier.

You can also learn how to search by company name on eMvoy.

Primary Products

Our editors carefully select products and services that most closely match the main focus of companies in our system.

When you search, our ranking system automatically gives a small boost to companies that have your query terms in their Primary Products field. This helps our users find companies that specialize in a particular product or service more efficiently.

City and State

Most of the web sites in our database have a city and state information displayed in the search results. This is designed for users who find it helpful to know where a given company is located.

You can also learn how to search by city, state or zip code on eMvoy.

eMvoy's Big News: Coming November 1st

2006-10-31T13:17:00.000-06:00

On Wednesday, November 1st, 2006, eMvoy will release the National State Rankings for Manufacturing Competitiveness.

The results to be released are part of the conclusions of a one year evaluation of 100,000 U.S. manufacturers. The findings include rankings of all fifty states.

Chicago-based eMvoy rated companies by assessing company stability, market penetration, technology and web presence. The research group performs large-scale evaluations of U.S. manufacturers as part of the services it provides to industrial purchasing agents.

More about eMvoy

2006-10-31T13:08:00.000-06:00

About eMvoy

eMvoy is an independent technology and industry research company that provides market intelligence through in-depth analysis of US manufacturers. Utilizing comprehensive analysis backed by proprietary data, eMvoy delivers vital business information to a range of industry sectors. eMvoy is also the only service that integrates a full-text search engine with a rating system of US manufacturers.

Chicago-based eMvoy was developed by the founders of SearchEngines.com, an industry watch group. SearchEngines.com, founded seven years ago, is frequently cited as a primary source for authoritative search marketing information on search engines and has been quoted in media outlets in over 26 countries including:
?Crain’s / B2B
?CIO Magazine
?The New York Times Learning Network
?Continental Airlines In Flight Magazine
?ZD Net Australia
?Smart Business Magazine

In addition to the Chicago Sun Times and other daily US newspapers, eMvoy has also been chronicled in numerous trade publications such as:

?Automation World

?Manufacturing Business Technology

?Reliable Plant

?Modern Machine Shop

Craig Landy is the CEO of eMvoy and also directs SearchEngines.com. He launched his first internet venture in 1996. Mr. Landy has been involved in numerous other high profile Internet-related projects. Noteworthy examples include:

?An association with the BBC World Service on a panel of contributing experts for the educational series Knowledge on the Net

?Providing analysis and comprehensive statistical data for a series of articles about search engine technology published in the Wall Street Journal.

Robert Jordan, company director, is an Inc. 500 CEO. He is the founder of Online Access magazine, the first Internet-coverage magazine anywhere in the world.

More about "The eMvoy Score" and how we ranked the states

2006-10-31T13:00:00.000-06:00

Introducing the eMvoy Score

eMvoy evaluated 100,000 U.S. Manufacturers over a one year period. Data was compiled from a multiple sources and specific variables were identified to measure and calculate a company's attributes relating to reliability, quality and competitiveness. The results were derived from cumulative scoring of multiple factors, each having an applied qualitative weight. Algorithms were applied to normalize the combined scores. Companies were ranked based on their final score.

Obtaining Data

eMvoy evaluated U.S. manufacturers by assessing very large, representative and geographically diverse data sets. The evaluated companies were required to have a functional website and a Standard Industry Classification (SIC) code identifying them as a manufacturer with a substantial U.S. presence. eMvoy leverages its ability to analyze data from a wide range of sources. These include:

EDIS: Many factors for evaluation were collected using our proprietary Editorially Driven Indexing Spider (EDIS). This system uses Internet based automated bots to collect massive volumes of data. The process requires rule sets that are configured by eMvoy research staff.
Third Party Data: Third-party sources were utilized. For example, databases were acquired by eMvoy that contained the lists of U.S. manufacturers that are registered to the ISO 9000 type standards. Other data was utilized from industry-specific, independent product testing and certification authorities such as NSF International.
Company-Provided Data: We request manufacturers to provide additional relevant data to help our staff validate or augment data.

Processing Data

A range of factors such as company size, company history, U.S. manufacturing facilities, ISO certifications, product or process certifications, trade association memberships, technological innovations and website content were utilized as variables. Field research was conducted to determine which factors were relevant to key decision makers. For example, industry purchasing agents were surveyed to decide which variables directly impacted procurement decisions. Weights were applied to indicate the level of importance for each factor.

What is the role of advertising in the eMvoy Score?

Advertising plays absolutely no role in the calculation of the eMvoy Score.

How do you show the eMvoy Score?

When you search our web site for services or products, you will get search results with names and a graphical representation of the eMvoy Score.

Do all industrial companies in your search results have an eMvoy Score?

eMvoy aims to rate each company in our system. Since we use numerous factors to calculate the eMvoy Score, we sometimes can't properly rank a company that doesn't have enough information available.

If you notice that your company doesn't have an eMvoy Score, we encourage you to contact us and submit more information.

eMvoy to rank US States by manufacturing competitiveness

2006-10-31T12:54:00.000-06:00

On Wednesday, November 1st, 2006, eMvoy will release the National State Rankings for Manufacturing Competitiveness.

The results to be released are part of the conclusions of a one-year evaluation of 100,000 U.S. manufacturers. The findings include rankings of all fifty states.

eMvoy quote related to upcoming November 1st Release:

"The public perception is that, overall, U.S. manufacturing is weak. After looking at 100,000 manufacturers, we found a more complex picture. Our data pointed to a complex, yet very optimistic picture of U.S. manufacturing. A group of states scored exceptionally high for competitiveness. Other states were predictably flat or below the average. We didn't expect to see such huge gaps between the best and worst states." said Craig Landy, CEO of eMvoy.

About eMvoy

eMvoy is an independent technology and industry research company that provides market intelligence through in-depth analysis of U.S. manufacturers. Utilizing comprehensive analysis backed by proprietary data, eMvoy delivers vital business information to a range of industry sectors. eMvoy is also the only service that integrates a full-text search engine with a rating system of U.S. manufacturers. Chicago-based eMvoy was developed by the founders of SearchEngines.com, an industry watch group.

Media Contacts
Jenifer Aiello Communications jenifer@emvoy.com 773-665-8865 or 888-881-2255	Joseph Tucker Public Relations joseph@emvoy.com 773-665-8865 or 888-881-2255

You can also send reach us by sending an email to press@emvoy.com.

The big news at eMvoy - Introducing the first national rating system for US manufacturing

2006-08-28T21:49:00.000-05:00

We've been working hard over the past six months to launch the eMvoy Score, the first national rating system for US manufacturing. Last Tuesday, the eMvoy Score went live at eMvoy.com.

Here's our press release:

CHICAGO -- August 24, 2006 -- eMvoy today announced the eMvoy Score™, the first national rating system for US manufacturing.

The new system, available at eMvoy.com, calculates a score for manufacturing companies by evaluating 24 different quality, reliability and stability factors. Companies are then assigned a ranking from one to five, which rates their competitive ability and their overall presence in the unsteady US manufacturing environment.

"With annual US industrial sales exceeding $1.5 trillion, the stakes are high," said Craig Landy, CEO of eMvoy. "The eMvoy Score is the essential missing piece for the vendor selection process. We condense relevant information about each company into a single icon to give our users an instant means of evaluating US manufacturers."

The number of professional purchasing agents has continued to decline, making the task of selecting reliable vendors a critical challenge for companies nationwide. "The eMvoy score is helpful at every stage of the process, especially in helping buyers narrow down a short list of potential suppliers," said Landy.

Users can search for industrial products and services and receive relevant lists of ranked manufacturers at www.eMvoy.com.

In the coming weeks, eMvoy will be releasing the Best Manufacturing States list with top ten states whose companies have earned the highest eMvoy Scores.

Craig Landy, who leads the Chicago-based team that developed the eMvoy Score, also founded SearchEngines.com, a popular online search engine resource.

You can check your company's score and search for other at www.emvoy.com

Emphasis on Supplier Diversity May Help, Not Hamper, Your Bottom Line

2006-08-24T08:06:00.000-05:00

This via IndustryWeek:

Connecting with women- and minority-owned suppliers is often perceived as a costly, administrative hassle that doesn't offer any return on investment. A recent study conducted by the Hackett Group gives this perception the lie: their research shows that top-quality procurement organizations using diverse suppliers generate $3.6 million in revenue for every $1 million spent. The companies that earned the highest returns from diverse supply connections did so by trumpeting the fact that they use diverse suppliers. Apparently the good PR appealed to consumers and investors with a sense of social responsibility, driving revenues up. Sounds like good business all around to us.

Related Links:

National Minority Supplier Development Council
Women's Business Enterprise National Council
Business.gov (US Federal Government site, includes resources about diverse suppliers)

Monday Roundup: August 21

2006-08-21T03:38:00.000-05:00

We begin the week, as always, with a look at the big-picture economy.

First, it's late August, and the various committees, finance bodies, and wonk councils that analyze trends and provide us with economic indicators are apparently just as susceptible to the dog days as the rest of us. All we'll get this week are the durable-goods orders and the July housing numbers. The housing numbers are probably not going to be great, according to the folks at MarketWatch. Experts anticipate a drop of up to 3% in new-home sales, which would bring sales to the lowest level in two years.

Couple slower housing sales with lower consumer confidence: the University of Michigan measures consumer sentiment, and its index reading for the month of August (so far) is the lowest number since right after Hurricane Katrina. Further completing the picture of consumer reluctance, the Wall Street Journal reports that "upscale" spending is finally getting pinched by higher energy costs: families with incomes as high as $75,000 a year are reporting plans to cut back on buying clothes, fashion accessories, home decor, and restaurant meals.

People are also planning to cut back on their summer vacations this year. According to the New York Times, 43% of people who responded to a Gallup poll said they had no plans to take vacations in the next six months. That is probably due as much to changing cultural trends-- anecdotal evidence suggests it's harder to leave work for more than a few days anymore-- but read the NY Times article and you will see plenty of people citing the cost of gasoline as the party pooper for their summer fun.

Speaking of the cost of gasoline, oil prices hit a two-month low last week after the Israel-Lebanon ceasefire. Also helping drop the cost of a barrel o' crude was the revised hurricane season forecast: it will be nowhere near as bad as last year's record-breaking season (which we had already been told would be the case), and won't be as bad as originally thought. Meteorologists are only expecting three major storms now, instead of five to seven.

Is the drop in oil prices the start of a trend? Since oil costs are the number one negative drag on US manufacturing at the moment, we would love to hear that oil prices are indeed expected to slide for a while.

However, whether a few days of falling prices constitutes a trend is debatable, and economy wonks love a good debate. Some would like to argue that there's actually an oil-price bubble, and that when it pops we could see oil fall back to as low as $25 a barrel. The Wall Street Journal examines the oil bubble argument here (or here at South Africa's MoneyWeb, if you don't subscribe to the WSJ). We'll encapsulate it for you if you don't have time to read up just now: analyists who buy into the bubble argument say that high crude prices have more to do with oil investment tactics than with classic supply-and-demand issues like politics, weather, or increased need for fuel.

While we wait to see who's right, we will note that oil prices rose slightly today in international trading, largely because Iran tested some short-range missiles over the weekend. The Iranians are also expected to give their formal answer to the UN next week in regards to suspending their uranium enrichment program. How do you say "No" in Persian? Because that's what they're going to say.

Finally, while this week's Roundup probably hasn't put a smile on your face, we do want to note this: The US economy is still growing, and doing so at a decent clip. It's just not growing as fast as it was earlier in the year.

News Bites

2006-08-18T09:54:00.000-05:00

Here are a few short updates on the day's headlines:

Ford has announced that its fourth-quarter production will be down 21% from last year, and that it will have to shutter plants in the USA and Canada. Bill Ford said more details would be announced next month. (AP via Yahoo! News)
Three days after announcing its recall of amazing flaming batteries, Dell revealed that its quarterly profits were down 50% and that the Securities and Exchange Commission is investigating the company's accounting practices. Ouch. (The New York Times)
Boeing's C-17 cargo jet program failed to win more orders from the Pentagon. Expect to hear an announcement soon about the end of that program, which employs 5,000 people in California. (Manufacturing.net)
The hazards of chocolate making: a worker at WI based Debelis Corp. waded into a tank of chocolate to clear a blockage and found himself waist-deep in a deathtrap of deliciousness. Police arrived and rescued him. (AP via Yahoo! News)
Machinists at Makino in Japan claim to have have made the smallest machined hole in the world. The tiny hole was made for a fiber optic part and measured 0.00044 of an inch. It beats the previous record set in Wales in 2005. (American Machinist, the Register)

Friday Off-Topic: August 18: Adventures in Search, and What Will The Astrologers Do Now?!

2006-08-18T08:36:00.000-05:00

On August 9th, the New York Times published an article called "A Face Is Exposed for AOL Searcher 4417749". That article alerted the web media that AOL had accidentally released search information on almost 660,000 of its customers to a public website-- apparently a bad move by workers hoping to help academic researchers with some project or other. Since then, writers and technically fiddly types have had a field day copying, sorting, and sifting the data, trying to see what patterns emerge from the search data. What searches were most popular? How much does what you search about give away about your identity? What, in short, is America looking for?

As it turns out, mostly for dirty pictures. But we at eMvoy could have told you that: we have, after all, been in the search business for quite some time. We can also tell you this: Britney Spears is no longer the search-engine superstar she once was. We're not sure why.

Moving on from the search for... stuff, to the more ennobling search for new information about our solar system, the International Astronomical Union met in Prague this week to discuss the state of its science. One of the topics on its slate was how to define a planet, seeing as how recently there have been arguments about whether or not Pluto should be counted as one. They've come to a provisional agreement on that definition: a planet is a spherical body that does not orbit around another larger body (like our moon; that's a satellite), but has its own independent orbit around a star.

If adopted, this definition would raise the number of planets in our solar system to twelve. Pluto's "moon" Charon, a Pluto-like object technically called 2003UB313 but nicknamed "Xena", and the large asteroid Ceres (between Mars and Jupiter) would be added to the total, and there would suddenly be hundreds of other candidates available.

Forbes notes the effect this new definition (if adopted) will have on textbook publishers, model makers, and poster printers. The Guardian tries out a few new mnemonics for remembering all the names. But we want to know: what about the astrologers? How on Earth will this affect the business of casting horoscopes, if all of a sudden we've got three new planets to consider?

If you're in India and you follow Vedic Astrology, the answer is: not at all. If you're worried about your newspaper horoscope, the answer is... we're not sure. Some astrologers seem to shrug it off, saying that the new planets will have been influencing events all this time anyway, so it's just a matter of studying the planets movements in the past to understand their influences.

Personally, we think the astrologers should be hanging their heads for not having predicted this change ahead of time.

This Week In Blog: August 14-18

2006-08-18T05:20:00.000-05:00

Here's what we've been reading this week in the manufacturing blogosphere:

Supplyexcellence.com: GM Drives Toward Cost Goals With New Supply Techniques. Riffing off this Reuters interview with GM's procurement chief, Supply Excellence looks at General Motors's cost-cutting crusade.

The automaker has an ambitious goal to reduce costs by 2% before the end of 2006, and is looking to do that through it supply chain even as the costs of energy and raw materials continue to climb. Their two major methods? Using cheaper foreign suppliers (with an eye towards buying more from Mexico) and increased standardization of parts across car models (a great illustration: GM makes twenty-six different types of seat frames while Toyota makes two).

Shopfloor.org: Clamoring for Workers. The NAM has been shaking the federal government tree, trying to get some manufacturing education initiatives to fall out (and they've had some success). Here, the blog highlights a must-read article in the LA Times, "Factory Shift: Manufacturers Struggle to Fill Highly Paid Jobs".

In addition to looking at statistics about the decline of manufacturing and the number of high-skilled jobs left unfilled, the article tells the story of 21-year-old Daniel McGee. A graduate from a private high school, Mr. McGee opted out of going to college after high school in favor of technical college and a two-year metalworking apprenticeship, which is paid at $14 an hour and includes health benefits. When he's done, Mr. McGee will make $58,240 a year.

This article should be sent to every high school guidance counselor in the country: it's the antidote to the "dirty, dangerous, and dull" stigma attached to manufacturing jobs. We hope there will be more stories like it in the mainstream media soon.

Speaking of metalworking, over at The Fabricator's blog, Stephanie Vaughan talks to pipe welder Tracy Rumph, who is heading to the Middle East to work for a private contractor. Vaughan looks into the types of jobs available with Middle East contractors by browsing their websites.

We'd like to add that if you want to learn about what it's like to be one of these workers, you should listen to the radio documentary "I'm From The Private Sector and I'm Here To Help", a 2004 story from WBEZ-Chicago's This American Life. It's an excellent piece of radio, describing the lives of power plant workers and security personnel. If you don't have an hour to listen, you can also download a transcript (PDF document) by clicking here.

R&D Weekly: More Security Tech: The Cogito System

2006-08-17T08:18:00.000-05:00

Last week we looked at cargo screening equipment that could be useful in determining whether what's in a bottle is harmless shampoo or half of a chemical explosive. This week we're looking at something even more advanced: a device that screens people, and then analyzes clues based on biometrics and cultural clues to determine whether or not they're a threat. It's called the Cogito1002.

The Cogito1002 is the mainstay product of Suspect Detection Systems, a company whose founders have experience with counter-terrorism in Israel. It has already been tested at border control points and airports. According to the Wall Street Journal (if you don't subscribe, there's a free reprint in the Pittsburgh Post-Gazette), recent tests of the system in Israel correctly identified 85% of officers acting as "bad guys" in an airport terrorism exercise, and incorrectly flagged 8% of innocent passengers as threats. The company says it aims to refine these results to 90% apprehension and less than 4% error.

So how does it work? It sounds a lot like an e-ticket machine, only with a polygraph attached:

"A passenger enters the booth, swipes his passport and responds in his choice of language to 15 to 20 questions generated by factors such as the location, and personal attributes like nationality, gender and age. The process takes as much as five minutes, after which the passenger is either cleared or interviewed further by a security officer."

With one hand placed in a sensor device, the passenger's physical responses to these questions are measured in a manner similar to a lie detector test. The questions themselves vary, depending upon the location of the device (an airport, a border control checkpoint) or intelligence about a specific threat, as well as the passenger's age, gender, and nationality.

That last attribute is important: the experts who developed Cogito1002 have researched cultural differences for a variety of nationalities or ethnic groups and choose words or questions that often provoke a physical reaction in terrorists from those groups. What happens if Cogito1002 picks up on a potential threat? It's not very dramatic: security officers will take the passenger to a back office for further questions. The new system was recently tested in Knoxville, TN, but the TSA and SDS did not give details about what was learned from the tests.

In addition to a machine that scans for "hostile intent", the TSA is also working on training security personnel to watch passengers' facial expressions and behavior to determine if a threat is present. This program, Screening Passengers by Observation Technique (SPOT) is currently only in use at a dozen airports, but after last week's excitement in the UK, the TSA is eager to train more of its 43,000 personnel to use the methods involved.

Further reading:
"Faces, Too, Are Searched at US Airports", NY Times 17 Aug 2006
"A New Tack for Airport Screening: Behave Yourself", Time Magazine 17 May 2006

Big Buy: Looking for Harmony with RoHS

2006-08-16T10:16:00.000-05:00

We're trying not to overdo the Reduction of Hazardous Substances story, but as it is the first environmental regulation to have an impact on global manufacturing, watching how companies cope with the directive is informative. It tells us a lot about current patterns of supply-chain management, and shows us how that's going to have to be handled as more and more companies are expected to be responsible for every component in their finished products. Designers and purchasers are the members of the company in the hot seat here, as manufacturers struggle to make sure every supplier knows what is and isn't allowed under the new rules.

On Monday, Forbes.com revisited the EU's RoHS directive and its impact on a few major electronics manufacturers, namely Apple, Palm, and Sony, who have had to pull products from the EU market due to unacceptable levels of lead or cadmium. Lead solder seemed to be a major stumbling block, in spite of the availability of lead-free alternatives.

The RoHS directive has been in place for six weeks, and while it doesn't yet seem to be wreaking havoc, it is causing considerable confusion and adding costs. An analyst quoted in the Forbes article says that companies could spend 2%-3% of sales, and up to 10% of their R&D budgets, on bringing products into compliance.

And they may be spending that money blind. According to recent research conducted by Arena Research and the Aberdeen Group, companies a) don't really fully understand the new regulations, and b) aren't investing in long-term compliance strategies. 83% of the 200 manufacturers surveyed by Arena Research would probably fail to have documentation proving RoHS compliance. Aberdeen found that two-thirds of companies it surveyed didn't have an in-depth knowledge of the regulations, and that 80% hadn't created a system for dealing with environmental compliance issues; they were treating EU RoHS as if it were a one-off deal. Those 80% need to get cracking to create a system for analyzing and documenting their supply chains for compliance, or their bottom lines will be in danger.

While they watch the ripples from the EU's RoHS, industry analyists have a weather eye on the wave of environmental regulations yet to come: China, Korea, and several US states will be enacting new environmental legislation over the next two years. The Chinese regulations in particular cover a broader range of products and materials than the European legislation. Most companies, on a board-member level, don't even seem to be aware of the Asian regulations in the offing. If you're in a position of influence at any company touched by these new regulations, spread the word.

Click, Click, KABOOM!: Laptops of Mass Destruction Prompt Dell Recall

2006-08-15T12:50:00.000-05:00

There are 4.1 million of them, in our homes, schools, and offices. They're time bombs, waiting for the perfect moment to wreak fiery havoc. And one of them might be quite literally under your nose right now.

Dude, it's your Dell laptop. More specifically the battery. If your machine was made between April 1, 2004 and July 18th of this year, or if you ordered a replacement battery for an older machine during that time, Dell wants it back. Due to some high-profile explosions and even higher-profile media attention (especially in the blogosphere), Dell has issued a voluntary recall for the batteries, the largest such recall in the history of the computer industry.

The batteries are Dell-branded lithium-ion laptop batteries made by Sony at plants in China and Japan. If you're worried about your own machine you can go to www.dellbatteryprogram.com to see a list of relevant models and how to return your battery.

While we're sure Dell has lost some customers and will have to suffer jokes at its expense for a time, we're also certain they will ultimately absorb the blow and soldier on. After all, they didn't make the faulty batteries.

But what about smaller manufacturers with similar problems? How does one manage a safety or PR nightmare like this one and not suffer crippling expense or loss of business? If you've got a story about how your company had to own up to a mistake, discuss it in the comments. And if you're writing in on a Dell, make sure you're wearing your asbestos underpants.

Energy and Environment News: August 14-18

2006-08-15T05:22:00.000-05:00

This week, it's all about recycling.

First, via Grist, we've learned that the auto industry is taking steps to reduce harm to the environment (and human beings) by ensuring that mercury switches will be removed from automobiles bound for the scrapyard. Mercury switches aren't used in new cars, but in cars made before the 2002 model year the switches are part of lighting and brake systems. When cars containing the switches are crushed or melted, the mercury leaks into the soil or evaporate into the atmosphere (which nearby workers then inhale). Mercury is a seriously potent toxin that primarily affects the nervous system in human beings.

Once removed from the scrapped vehicles, the switches will handed off to mercury recyclers who will find other uses for the metal. So it could still end up in the soil or the atmosphere-- it just won't be going there via cars in the scrapyard.

Articles relating to the recycling effort:

Chicago Tribune, 12 August 2006: "Automakers Pull Switch on Mercury"
Kansas City InfoZine, 13 August 2006: "Little Switches Add Up To Big Cuts In Mercury Pollution."

Here's another story from the city without local beer. The Pittsburgh Tribune-Review covered an EPA-Carnegie Mellon University conference dedicated to what could be the biggest recycling challenge of all: redeveloping industrial sites. It's called brownfields redevelopment; "brownfields" refers to an abandoned or obsolete industrial site that is contaminated by industrial pollutants. Brownfields redevelopment gives these old buildings new life.

After the company has pulled up stakes, leaving behind an empty, contaminated shell, developers and environmental scientists move in, deal with the pollutants, and turn the former eyesore into something new: a shopping mall, a conference center, or a housing development.

As you'd imagine, the Pittsburgh waterfront is absolutely thick with brownfields sites. Through private-public partnerships, they've managed to turn some of these eyesores into vibrant city attractions. The old LTV Steel plant, for instance, is now the SouthSide Works, a shopping/residential/office complex. In an effort to spread the redevelopment knowledge, Carnegie Mellon University's Western Pennsylvania Brownfields Center opened in March. It's meant to be a resource for environmental organizations, developers, and community officials interested in re-developing these unsightly but potentially useful sites.

Other states and municipalites are devoted to brownfields redevelopment, particularly in the Rust Belt. Here are a few resources and stories we found, including companies listed with eMvoy that provide brownfields redevelopment-related services:

Environmental Protection Agency: Brownfields Federal Programs Guide
eMvoy.com: "brownfields" search
State of Massachusetts Brownfields Development
State of Florida Brownfields Development
Michigan State University Newsroom, 3 August 2006: "Brownfields may turn green with help from Michigan State research"

Monday Roundup

2006-08-14T06:41:00.000-05:00

News late last week was dominated by the foiled Heathrow Plot, but today has been a slow news day so far. Take the time to catch up on some other stories important to manufacturing and to the business world at large.

First, the US trade defecit went down-- down-- in June. While the $64.8 billion defecit-- the fifth largest monthly defecit on record-- isn't anything to cheer about, the three-tenths of a percent reduction is. Boffins expected the defecit to climb from May to June, but sliding dollar values helped pump up US exports to record highs, even as imports from China climbed. Here are two analysis articles for your reading pleasure, looking at the facts behind the numbers and ramifications for the currency market, and one contrarian story from the European press, just for the sake of balance:

Forbes.com: "U.S. Trade Defecit down 0.3% in June"
Bloomberg.com: "Dollar Gains Vs. Euro as U.S. Trade Defecit Shrank in June"
Guardian Unlimited: "Oil Prices Keep US Trade Gap Close to Record Highs"

Aviation security issues continue to hold top spot on the headlines, including this unnerving story via the Chicago Tribune about firearms vanishing from checked baggage at O'Hare. But in happier, aviation-manufacturing related news, Russia says "Da!" to Boeing: the aviation giant has entered into a joint enterprise with the world's largest titanium producer, Russia-based VSMPO-Avisma.

The two companies will share 50-50 responsibility for machining titanium components for Boeing's 787 Dreamliner. Boeing has orders for more than 400 of the new passenger jets. Rough machining will take place in Russia, and component finishing will be handled at Boeing's plant in Portland, Oregon. An added bonus of the agreement is that it will reduce waste from titanium forging: any leftover machine turnings will be recycled by VSMPO-Avisma. Read Boeing's press release here.

From titanium to copper: as Chilean miners carry on their strike into a second week, copper prices continue to climb to ludicrous heights. In the European markets this morning copper for November delivery had risen almost 2%, to $7,700 per metric ton. The Escondido mine produces almost 9% of the world's copper. Labor and management are scheduled to meet tomorrow, but even if Escondido's issues are solved, there may be other labor-related disruptions to the copper supply. Mines in Canada and Peru will be conducting wage negotiations later this week.

Sugared-drink company update: Coca-Cola continues to watch its trade secrets theft case unfold: the judge in the case has asked the three suspects to give voice samples to be matched against phone conversation recordings offered as evidence. PepsiCo appointed its first female CEO, Indra K. Nooyi, who will take over from Steven Reinemund. PepsiCo has had a good run recently, due to diversification of products and less focus on its flagship soda pop.

This seemingly benign, progressive story about PepsiCo's new CEO has cynics buzzing. Ms. Nooyi is a native of Madras in India, and critics see her ascent to the top spot as a P.R. move: both Pepsi and Coca-Cola are in trouble in Ms. Nooyi's homeland. The soft drink giants are trying to defend their products' reputations in India, where several states have banned sales of the colas in schools and hospitals, claiming they contain pesticides. Both companies claim the product sold in India is made to EU standards-- claims recently supported by test results from an independent lab. There are fears within the Indian business community that foreign investment could suffer if the bans gain further momentum.

And finally, news from the gas station: while fuel prices hit a record high last week, relief may be in sight. Gas prices declined today on news of the cease-fire between Israel and Lebanon (Hezbollah is claiming victory over Israel), as well as on the good news that BP will be able to continue some production at its troubled Prudhoe Bay, Alaska oil field.

R&D Weekly: Cargo Screening Technology

2006-08-10T12:31:00.000-05:00

This week in not-so-cool R&D, we're reacting to the headlines regarding the aviation terror plot that was foiled by UK police and Scotland Yard today, and which has global air travel tied in knots.

First, a look at what the 24 suspects-- most of them under 30, [link is to BBC list of 19 names released by banks] born and raised in the UK-- were apparently trying to do. The foiled scheme seems to be a near-carbon-copy of the 1995 "Bojinka" plot (masterminded by Ramzi Yousef, currently in custody in the US): attackers, carrying explosive chemicals in innocuous bottles, would mix and then explode homemade bombs in-flight, using electronic devices like watches or alarm clocks to provide the detonation charge.

If you subscribe to the Wall Street Journal, you can read their excellent article "Menace In A Bottle" explaining how such bombs can be devised. If you don't get the WSJ, you can read this edition of Slate's Explainer column, which describes the different chemicals used in homemade bombs, and what would happen if a potential terrorist were asked to drink them in front of airport screeners (not that this would have affected any of the arrested suspects-- their bottles of sports drink had false bottoms for the explosives).

Both Bojinka in 1995 and the Heathrow Plot were foiled well before any would-be Jihadis reached the actual airport. Still, thoughts have naturally turned to the security check-ins at a departure gate near you. Is there any technology out there that can reliably detect liquid, as opposed to solid, explosives?

But of course, and much of it is made right here in the United States. Several news outlets are carrying discussions of this issue today, and probably one of the best is the New York Times, in an article called "Liquid Threat is Hard to Detect".

Rapiscan Systems makes the massive hold-baggage scanners you've seen at your local airport: these are not merely x-ray or metal detectors, but machines with the ability to fire radio waves at an object, analyze the vibrations produced, and then decide whether it's a block of C-4 explosive or a copy of, say, Thomas Pynchon's 1200-page doorstop novel Mason and Dixon.

According to Rapiscan's website, their detection systems work via density and mass analysis: shampoo apparently has a different density than TATP explosive fluid, and the computer is programmed to make calculations about density based on the apparent size of containers. Adaption of these hold baggage screeners for security checkpoints could mean that transportation authorities will let you carry a bottle of water and a book on a flight again someday (liquids were also banned on flights in '95 after the Bojinka plot was uncovered). But that doesn't seem likely to happen soon, as the Department of Homeland Security has been concentrating on providing funds for human screeners and other security personnel, according to the NYT.

They are investing in "puffer machines". The NYT explains:

The department has been moving ahead with the installation of one proven technology, so-called puffer machines, which blow a small amount of air on passengers to look for traces of explosives. To date, the machines have been installed at about 30 airports around the United States, including in New York and Washington.
But these devices may not sound an alarm if a terrorist has been extremely careful in preparing the liquid explosive, meaning no traces are left on the container or the person or bag carrying it.

There are also upgrades to traditional x-ray machines available. Guardian Technologies, Inc. has a software program called Pinpoint Threat Identification Software. Pinpoint scrutinizes images produced by baggage x-ray machines, examining each individual pixel to analyze item densities. Apparently the software has a great track record for detecting "threat items" that have been cleverly hidden. One wonders if a Pinpoint-equipped machine would have spotted the false bottoms in the bottles. We'll only find out if we adopt the technology. You could always write to your congresscritter, and let him or her know you want the DHS to pay more attention (and devote more funds) to these innovative technologies that could help keep aviation and shipping safer.

Again, we're all lucky that the lethal hand baggage never made it to the airport in the first place. Thanks to law-enforcement in the UK and Pakistan, they didn't. And the first tip may have come from the oldest law-enforcement screening system of all: an anonymous informant. Reports from the UK suggest that police first got wind of something in the works when a British Muslim phoned to report a friend who had recently begun to behave strangely. Given the previous reluctance of the UK Muslim community to talk to police, that's probably the best news we've heard so far.

Green is The Color of Money: GM's New Plant

2006-08-09T12:59:00.000-05:00

General Motors recently finished construction on a new plant in Lansing Delta County, Michigan, that is the first automotive plant to receive a gold award from the US Green Building Council. The assembly plant, which will produce a number of GM crossover vehicles such as the Saturn Outlook and the Buick Enclave, is designed to reduce water useage, runoff, and cuts energy costs to 55% of the industry standard. That's a savings of 4 million gallons of water and 3 million kwh of electricity every year.

From GM's press release:

“Lansing Delta Township is the first of the next generation of industrial buildings,” said David Skiven, executive director, GM Worldwide Facilities Group. “It proves that sustainable manufacturing buildings can be economically built and operated. We are extremely proud of the innovative thinking of our employees and partners on the team that made this possible.”

As well they should be. See, this is what it's all about: finding better, less wasteful ways to make the things people want and need. A cleaner environment is a benefit to everyone, and it isn't incompatible with profit or quality products. Maybe now that energy-efficiency is a real cost saver, and not just something companies do to improve their image with people who wear sandals, more major manufacturers will start adopting greener design and technology.

http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=74&docid=27772
http://www.usgbc.org/News/USGBCInTheNewsDetails.aspx?ID=2501
http://industryweek.com/ReadArticle.aspx?ArticleID=12439

The Big Buy: Week of August 7-11

2006-08-09T11:14:00.000-05:00

Welcome to the Big Buy, where we look at the issues keeping your purchasing department awake at night. This week we're concentrating on logistics and shipping.

While it's only normal that trucking companies have raised their fuel surcharges in light of rising gasoline costs, companies who have opted to switch to rail shipping now find that the rail companies are raising their fuel surcharges, too. But the precipitous rise in railroad surcharges has prompted some raised eyebrows at the Department of Transportation, according to Purchasing.com. In fact, the Surface Transportation Board (part of the DOT), recently published a proposal outlining possible regulation of railroad fuel charges. That is probably music to the ears of chemical manufacturers, who ship a large percentage of their products via rail. In fact, the American Chemical Council, the trade association for chemical manufacturers, issued a statement decrying what they considered unfair and possibly unscrupulous surcharges back in May.

The DOT's investigation might not make rail fuel surcharges any cheaper, but it should at least make them more predictable. Stay tuned.

So what's going to happen to the price of oil, based on BP's decision to shut down part of its Alaskan oil field? The price will probably stay up for a while. BP says that it has closed the eastern half of its Prudhoe Bay operation down while it repairs corroded pipeline, and by this weekend the company will decide whether or not to close the rest of the field. At half-capacity the field would produce 200,000 barrels of oil a day.

This situation is really affecting one purchasing department in particular: the State of Alaska's (read a statement from Alaska's governor here.). Alaska gets a whopping 86% of its revenue from taxes related to oil and oil production, so it is scrambling to plug a huge new hole in its budget. Every day of production lost at Prudhoe Bay sucks $6.4 million from the Alaskan economy. Governor Frank Murkowski has instituted a hiring freeze and is examining "the state's right to hold BP accountable for losses to the state."

While the implications for Alaska are serious, it's not much better for the rest of the US: Prudhoe Bay provides roughly 4% of our oil supply. Expect those shipping fuel surcharges to stay pretty high.

Energy and Environment News: China Tries to Clear the Air

2006-08-08T12:26:00.000-05:00

There's a country where you will find seven of the ten most polluted cities on earth, where 30% of the land receives its precipitation in the form of acid rain, where there are 600,000 deaths due to indoor air pollution yearly, where 70% of all rivers and streams are unfit to drink, and where less than 20% of solid sewage waste goes through processing. That country is China.

Largely reliant on coal to provide its power, the emerging manufacturing giant is the least energy-efficient nation in the world and certainly one of the most toxic. In fact, according to a 2004 article in the Economist, China's pollution problem is so severe it is actually inhibiting the country's further economic development.

Air pollution particulates from China have been traced as far as the eastern seaboard of the United States. A high-profile 2005 chemical plant explosion in Jilian Province affected the water supply in parts of neighboring Russia as well as China, and brought worldwide media attention to witness the depth of China's industrial pollution problems. Now, exactly two years from the start of the 2008 Summer Olympics in Beijing (the city with the worst air pollution on the planet), China knows it must clean up its act. Problem is, since its own environmental laws have historically been so lax, China hasn't developed the equipment or the know-how to process industrial waste and emissions.

Solution? Import the expertise. International environmental management companies and other groups are jumping to get their hands dirty in China. One French company has signed a 30-year contract to treat and clean waste from a gigantic chemical park outside Shanghai. JWC Environmental, an American company that began its life in a California garage, is selling sewage and wastewater treatment equipment to manufacturing plants and municipal authorities around the world. China is fast becoming one of its biggest customers.

While entrepeneurs from outside China clean up by cleaning up, other organizations are helping companies inside China develop cleaner technology. The World Bank's International Finance Committee, which handles private-sector funding, pledged up to $50 million to China's Xinao Group to help them develop clean coal systems. The aim is to stop China burning so much straight coal, and facilitate conversion of it to environmentally-friendly (well, friendlier) methanol and dimethyl ether (DME). DME is of real interest because it can be used in diesel engines, which would reduce emissions from China's exploding population of cars.

Whether or not China can clean up Beijing in time for the Olympics on 08-08-08 remains to be seen (marathon runners are already preparing for the smoky conditions). But, like a starlet dieting before the Oscars, the spotlight provides an incentive for China to change its habits. Certainly in the last few years China has slowly turned the corner towards beginning to manage its environment. Hopefully those changes will continue.

Crying Into Our Beers in Western PA

2006-08-08T07:34:00.000-05:00

Mrs. Judson is the Head Blogger here at eMvoyblog, and she's a native of Pennsylvania. She has since relocated to another time zone, but a recent story out of Latrobe, PA, cuts her to the heart .

Much to the dismay of the greater Pittsburgh area, the Latrobe Brewing Company has ceased to produce Rolling Rock, its extra pale lager in the distinctive green bottles. Parent company Labatt-InBev of Belgium has sold the Rolling Rock brand (but not the brewery) to Anheuser-Busch. Rubbing salt in the wound, Anheuser- Busch will move Rolling Rock production from Latrobe to its East Coast plant in ... Newark, New Jersey. If you don't quite appreciate the outrage this move has caused, try to imagine what would happen if Jack Daniels suddenly announced it would be produced not in Tennessee, but in Los Angeles.

Meanwhile, the Latrobe Brewing Company, a mainstay of its hometown since 1893, faces an uncertain future. It appears that a deal is imminent that will save its 200 employees' jobs for the near term (the next two or three years at least). The City Brewing Company of La Crosse, Wisconsin, is in negotiations to produce its own products in Latrobe. If a deal is reached, brewing of the Midwestern imports would probably not start until 2007, so those glass-lined tanks currently stand idle.

If we didn't know they've already been cleaned, we'd organize a field trip to collect residue. Instead, we'll leave you with this edition of Cecil Adams's The Straight Dope, which has the best story we've yet heard to explain the mysterious "33" printed on the back of Rolling Rock bottles.

Related story: Is all of the Pittsburgh metro area doomed to beerlessness? This item from the Pittsburgh Tribune-Review covers the bankrupt Pittsburgh Brewing Company's labor battles. PBC makes Iron City, and is warning that, unless it gets the wage and benefit concessions it needs to survive, its brands will have to be sold and production moved elsewhere.

Advice for Western Pennsylvanians: switch to Yuengling. Don't worry about it getting sold off or moved on; that company has been run by the same family since 1829. Or, in just 5-15 years, you could become a brewmaster yourself; details about how to do that are here.

Burning the Talent Candle at Both Ends

2006-08-07T10:10:00.000-05:00

Late last week, Novations Group of Boston released the results of a survey designed to find out about how the expected talent shortage (the exodus of qualified, experienced workers from the market that will occur as Boomers retire) is affecting companies. The results were mixed, to say the least: Roughly 60% of companies said they were anticipating a loss of talent in the next ten years due to retirements, but only 30% said they had any sort of plan to do something about it. Taken on its face, that statistic may sound alarming.

However, eMvoyblog would worry more if this survey had been taken in 2011, not 2006. Most demographers peg the "official" start of the Baby Boom generation at 1946, so the oldest Boomers are just turning 60 (the President is one of them, having had his birthday in July). As they begin to retire en masse, the ratio of working adults to retired adults will shrink drastically. The waves of retirement haven't started yet, however, so companies who aren't now thinking about talent, training and recruitment still have some time to mull it over.

It's the bottom-up talent shortage, however, that's a little more dire. According to a 2002-2003 study by the National Association of Manufacturers, Deloitte and Touche, and the Manufacturing Institute, fewer young people and recent graduates see careers in manufacturing as desireable or rewarding. (Read the summary here; it's a PDF file.)

What's more, the entire US education system exacerbates the shortage by overemphasizing a four-year university degree as the only route to a rewarding career-- witness the emphasis on college enrollment rates in this report from the Bureau of Labor Statistics.

Now, broader access to higher education is something to be lauded and supported. But a four-year degree shouldn't become the only avenue towards prosperity. Not everyone is suited to the collegiate environment, and the university cannot teach all the necessary disciplines society requires. The American economy, furthermore, is going to be in dire need of students with what would typically be called a technical school background (although technical schools are shying away from that name, as pointed out in this pithy blog entry over at The Fabricator). The over-promotion of college as a goal has led to the devaluation of other equally valid and vitally needed post-secondary programs: technical schools, apprenticeships, and two-year degrees. Providing young people with the skills they need to make a good living doesn't just bump up the GDP or keep America competitive-- it can turn young people into community leaders.

Industry trade groups like the NAM are working to increase interest in manufacturing work among young people by calling for initiatives at the federal level-- one such program is the Department of Labor's High Growth Job Training initiative, started in 2004.

Individual companies and smaller local trade groups can do their part to fight the manufacturing talent shortage at the state or local level. Send a delegate to the local schoolboard to explain how rewarding a manufacturing job can be to parents dazzled by glossy university brochures. Explore partnering with local high schools or community colleges to provide instructors or resources for apprenticeships and certification programs, like this one in Florida, or this one in Vermont. Sure, they're small-scale. But that's only because you haven't joined in, too.

Friday's Technical Issues

2006-08-07T04:16:00.000-05:00

Our weekly off-topic post this past Friday didn't see the light of day due to technical problems with Blogger. Apologies.

On Deck Week of August 7-11: Flat Rates, Rising Energy

2006-08-07T04:06:00.000-05:00

In the early part of this week attention is focused on tomorrow's meeting of the Federal Reserve. Following a string of economic indicators pointing to slower growth in the economy (particularly the July unemployment numbers), investors expect the Fed's Chairman, Ben Bernanke, will opt to hold rates steady as a check against inflation . The Federal Reserve has been raising the key rate-- the rate banks charge one another on loans-- at a steady pace for more than two years: it was at 1% in 2004 and is now at 5.25%. Holding the rate flat may also soften the dollar a little further, which is a bonus for US manufactured goods.

Conventional wisdom holds that when the economy slows down, prices don't grow. One of the ways the government can help keep prices down is to drop its interest rates or keep it flat. However, the Wall Street Journal (subscription-only link, sorry) notes that conventional wisdom may not apply to our current situation:

The challenge for Mr. Bernanke is getting the second part of his forecast right. While growth does seem to be moderating, the anticipated slowdown in inflation hasn't materialized. Tomorrow, the Labor Department is expected to report a second-quarter uptick in the cost of labor and upward revisions to previous labor-cost estimates. Because rising labor costs can feed inflation, that could add to inflation concerns at the Fed and in the bond market.

The New York Times has some analysis here (free registration link), which briefly mentions the effect of swelling energy costs on the economy (note: the Federal Reserve doesn't look at food or energy costs when calculating inflation). The writer observes that "energy prices are unlikely to keep rising as fast as they have in the past".

Which sounds heartening, until you go back to the front page of the NYT, where this headline is prominent: Major Alaskan Oil Field Being Shut Down.

Oy. Here's the story: A corroded pipeline has caused a minor spill in BP's Prudhoe Bay, Alaska operation. While it works to fix the problem, 1,000 wells will be offline. US oil production will drop by 400,000 barrels a day. That means a reduction of 8% in production, or nearly 3% in supply, at a time when the oil market is tighter than Cher's last face lift. Prices in the London markets have risen 2.4% so far today. According to Reuters, BP does not know when the pipeline will be fixed.

Aside: if you read the press release from BP, you will come across the phrase "smart pig run". We don't know about you, but eMvoy immediately imagined teams of hogs with miners headlamps checking the pipelines for rust. The term is from pipeline engineering, however, and refers to any device sent through the pipeline for the purpose of cleaning, separating products, or inspection. Click here to read a primer about pipeline pigs. [from the Pigging Products & Services Association website]

So, for discussion: inflation is the topic. We all know commodity and material prices are climbing, but what about labor, the other factor mentioned in the NYT and WSJ articles? Is your company seeing a rise in labor costs as well?

This Week In Blog: July 31-August 4

2006-08-04T06:14:00.000-05:00

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 Shopfloor.org 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 Shopfloor.org'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, Supplyexcellence.com 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 Fabricator.com 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.

Change of Boeing Strategy Prompts McCain Change of Heart

2006-08-03T09:54:00.000-05:00

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

2006-08-03T07:20:00.000-05:00

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!

Source: News@Nature.com

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

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

2006-08-02T09:50:00.000-05:00

If you've been reading regularly, you might have noticed that we at eMvoy.com 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. Purchasing.com 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 Bloomberg.com 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. Purchasing.com 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

2006-08-02T09:47:00.000-05:00

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:

Ethanol (made from corn, for now)
Methanol (from coal and coal wastes)
Biodiesel (diesel made from or mixed with vegetable oils and animal fats)
Natural Gas (either liquified or compressed air)
Electricity (basically, hybrid cars)

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.

Update: California-UK Partnership (sort of)

2006-08-01T15:09:00.000-05:00

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 Defamer.com 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

2006-08-01T11:12:00.000-05:00

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?

2006-08-01T10:35:00.000-05:00

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.

401Ks...They're Grrrreat!

2006-07-31T10:47:00.000-05:00

We saw these headlines and had to comment:

Ford to Put 600K Toy Cars in Cereal Boxes

and

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

2006-07-31T07:07:00.000-05:00

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:

currently unemployed;
claiming unemployment benefits;
and still looking for work.

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.

Experience Globalization: Buy Beer

2006-07-27T11:32:00.000-05:00

How the World Works (which is hosted by Salon.com; you'll have to sit through an ad) viewed globalization through beer goggles yesterday after reading an article in the Wall Street Journal describing double-digit jumps in consumption of foreign beers in the Midwest. This is apparently news because-- apparently-- people in the Midwest don't drink imports, in the way that many people in Michigan don't drive imports. (We are a little hacked off about some of the stereotypes in these articles, seeing as how we're based in Chicago.)

Since the WSJ is subscription-only, we will quote two paragraphs of the article for you:

But there are signs that domestic beers' traditional hold over the heartland is loosening in favor of imported beers -- and that has American brewers worried. A similar shift happened years ago on the coasts, but only in the past five years has it started to take root in the Midwest, home to Anheuser-Busch Cos. of St. Louis and Milwaukee's Miller Brewing Co., a unit of SABMiller.

To be sure, imports still make up a small fraction of beer sales in the Midwest -- but their sales are growing rapidly. In Iowa, only 1.7% of the beer sold in 2000 was imported; by 2004, imports had jumped 65%, to a 2.8% share. In Wisconsin, Miller's home state, imports rose 51% between 2000 and 2004, to a 5.3% share. Missouri, home to Anheuser, saw import consumption climb 21% over that same period, rising to 3.5% of beer sold.

Zoinks, a 2.8% market share! Curse you, Newcastle Brown Ale! Corona and Tecate, a pox on both your houses (with a twist of lime)!

The article goes on to note that the rise in import beer consumption is worrying to domestic brewers, because they've just come off a down year in 2005. But it also provides them with an opportunity: because imports are pricier, US brewers can introduce fancy premium brews that sell at a price slightly higher than their regular product, but cheaper than their foreign competitors.

And if that fails? Why, the US brewers just buy big fat wedges of shares in the competition (beer stocks are doing well, by the way). Win-win: let's have a toast to capitalism.

We at eMvoy know there are a lot of companies in the US making beer-brewing equipment, and the Brewers' Association tells us that nearly everyone in the US is within 10 miles of a brewery (check here). That means there must be a lot of smaller local brewers out there of which we've never heard. If you feel inclined to comment, we'd love to hear about some of your favorite less-well-known domestic beers (quickly, please, we're having a barbeque this weekend).

We'll start things off with one of our favorites: hard-spellin', easy-drinkin' Yuengling.

Trade Groups Urge WTO to Get That Old Magic Back

2006-07-27T10:18:00.000-05:00

Major business organizations from the US, the EU, Japan, Australia and Brazil petitioned the WTO to restart talks as soon as possible. They were concerned that with the Doha Development Round on hold, countries might begin negotiating smaller trade agreements among themselves that would complicate trade on the world scale by creating regional tangles of restrictions.

The US Chamber of Commerce issued a statement expressing its disappointment in the shutdown of the talks. The statement called for renewal of the president's current special trade negotiating powers (which would send any agreement to Congress for an up-or-down vote so that nobody can attach riders or amendments), which expire June 30, 2007. The Chamber of Commerce also criticized other countries for being too stingy with their offers.

Part of the intention of the Doha Round of talks (named for the city in Qatar where the issues under negotiation were first raised, in 2001) is to help poorer countries get a leg up in the global economy by liberalizing trade-- basically by lowering protectionist policies that rich nations use to lock smaller ones out of the marketplace. The issues up for discussion were agricultural market access, domestic agricultural protectionism, and non-agricultural market access (read: manufactured goods).

Six of the member groups spent so much time fighting over the agricultural issues that the third issue was never even brought up. (The Christian Science Monitor has an excellent article here that explains some of the details.) The EU blames the US, saying we weren't willing to make a serious effort to address the way we subsidize our farmers, and the US blames the EU for not wanting to lower import tariffs sufficiently.

The head of the WTO, meanwhile, says that talks haven't "failed", they're just "in suspension". Which sounds like something a jilted boyfriend might say: "She didn't dump me, we're just on a break."

For the best breakdown of this very complicated issue (seriously, it's like trying to explain Twin Peaks), you can go to the BBC's in-depth section on world trade issues. They have an archive of articles as well as some "executive summary" type features explaining the issues surrounding the talks, who the major players are, and a few real-world case studies of how ordinary workers and business owners are affected by these high-up decisions.

Note, however, that because the BBC is a UK body, it cannot help but have a lot of analyists with a pro-EU bias. The straight news articles are generally evenhanded.

Cool R&D Thursday: Synthetic Gecko

2006-07-27T08:54:00.000-05:00

Earlier in the month we covered a story about SpinyBot, the gecko-inspired surveillance robot that can climb up walls using toes with little climbing spines all over them. Now engineers at BAE Systems have invented a new type of plastic super-adhesive also inspired by the tiny wall-crawler. It's called Synthetic Gecko.

The scientists involved claim that a relatively small square of this new adhesive could attach a family car to your ceiling (provided your ceiling were strong enough). And it's got nothing to do with glue-- the plastic doesn't feel sticky when you touch it. BAE's press release explains the science:

The gecko gets its ability to stick without glue from the soles of its feet which are patterned with millions of tiny hairs with split ends. At the tip of each split is a mushroom shaped cap less than one-thousandth of a millimetre across. These ensure the gecko’s toes are always in very close contact with the surface beneath – so close that molecular forces of attraction create the grip.

The researchers used ordinary photolithography techniques-- the common etching technique used to engrave silicon chips-- to give their polymer a coating of tiny "hairs" with mushroom shaped ends. This created the ideal environment for the attractive forces necessary to generate super grippiness. Applications of the new technology could include repairing aircraft or fuel tankers, making super-grippy tires, making safety harnesses, etc. etc.

Very cool, potentially industry-changing stuff. We'll know Synthetic Gecko has arrived when we see it repurposed, a la the velcro wall, at carnivals and fraternity rush week events. Say in ten years?

Monday Roundup: Tuesday Edition

2006-07-25T11:23:00.000-05:00

Yesterday's roundup was eaten by blogger.com, and seems to have vanished into the ether, never to be recovered. Which is a pity, because it was stunningly informative, while also being entertaining. Concise, yet insightful. Basically what we're saying is that it was a post of such high caliber as to make strong men weep; and the Pulitzer Committee, realizing that no other journalist anywhere could ever brush the hem of such dazzling literary quality, would have closed up shop forever.

The world is a lesser place for its loss, trust us.

The major story was that the latest Doha Talks at the WTO have collapsed. Or maybe they've just stalled; it depends on whom you ask. The BBC has an excellent Q&A article explaining the origin of the breakdown, and also lays out why it's so important the talks get done this year (hint: it's Congress's fault, as usual).

The takeaway for you, the manufacturing professional, is this: because the US would not agree to change the way it deals out agricultural subsidies, other nations refused to make concessions that would free up the global trade of manufactured goods. Naturally, the EU blames the US (and vice versa). US farmers are breathing a sigh of relief, though: no deal, they say, is better than a bad deal.

Moonshine for Motoring

2006-07-25T09:53:00.000-05:00

Yesterday it seemed quite a few news outlets had finally cottoned on to the growing trend of home biodiesel refining. More Americans, taking their cue from rising gasoline prices and Willie Nelson, are finding ways to process leftover cooking grease and other plant-based oils to run their diesel-powered cars (biodiesel can also run some generators, which would make it handy to have on hand during hurricane season). Several biodiesel refineries are coming online in the USA, and the Chinese are also getting in on the act.

(And you, the scientific type about to writing that outraged comment: we know that the term "biodiesel" has been used incorrectly to refer to vegetable oils in the mainstream media, but we want people to know what we're talking about, okay?)

There are lots of websites where you can go to discuss biodiesel-related policy and read up on how biodiesel is better for the environment because of lower emissions (which is true, but so's natural gas, which is much more readily available) and promotes energy independence. You will almost certainly learn that Rudolf Diesel's original engine was run on peanut oil, and that biodiesel is less toxic and safer to transport than petroleum-based diesel (it isn't as flammable).

But what you (and we) really want to know is probably this:

How do I make my own biodiesel?
Who makes the stuff I need to buy to make my own biodiesel?

We suggest you start with these articles about biofuels from journeytoforever.org, and then head over to this search results page from eMvoy.

Judging by the locations of companies in the search results, biodiesel is still a mainly middle- and western-America phenomenon at the moment, and making a home refinery often requires a little mechanical know-how. However, more companies like Illinois-based Biodiesel Gear are making plug-and-play setups for the consumer who is also a mechanical novice.

Companies who make biodiesel equipment seem to be spin-offs of older companies with slightly different areas of expertise. For example, according to Biodiesel Gear's About Us page, the company's founders actually have a main business manufacturing chemical handling equipment. Nevada-based Biodiesel Solutions is the brainchild of a former Silicon Valley executive (and trained nuclear physicist/engineer, natch) who wanted to build his dream home off the power grid. Environmental concern and entrepreneurial spirit go hand-in-hand for these businesses, who are tapping into the growing national desire for energy that's cleaner as well as cheaper.

In fact, reading about biodiesel equipment companies is just as exciting as reading about an energy source ready to be harvested from the nation's fast food dumpsters. When it comes to the alternative fuel industry, it seems that for every Archer Daniels Midland or Tate and Lyle, there are several dozen nimble small-business pioneers-- and they're the ones who are really leading the way.

Naturally Well-Designed

2006-07-21T14:03:00.000-05:00

Slate.com has a pretty cool slideshow essay about biomimicry-- products or product components that are improved by copying systems from nature. Click here to read it. Our favorite was Spinybot, a robot developed by some clever folks at Stanford. Using tiny hairs on its "toes", like lizards and flies, Spinybot can climb up walls to inspect difficult-to-access areas-- useful after a disaster or for spy work.

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.

The Raw Edge

2006-07-20T06:24:00.000-05:00

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:

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....

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".

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 Roundup

2006-07-17T07:17:00.000-05:00

News chopped and blended with ice for easy digestion in the heat.

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.

Elsewhere:

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?

2006-07-17T07:15:00.000-05:00

If you were thinking of switching your inventory tracking system from bar codes to RFID, you may want to hold off a little while. Something better is in the pipeline.

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.

That Factory Sure Has A Lot of Flagpoles

2006-07-13T13:32:00.000-05:00

English autoworkers from the West Midlands will not be vacationing in Oklahoma anytime soon. A little over a year ago, storied British car maker MG Rover went belly-up (which British folks refer to as being “in administration”; aren’t they polite? The BBC has an excellent archive of the Rover meltdown here) and closed its plant in Longbridge on the southwestern edge of Birmingham. The closure took 6,000 jobs with it. Chinese carmaker Nanjing Automotive bought the plant, along with the rights to the MG Rover brand, and promised to re-open the plant in 2006-2007 to re-start production of the MG TF roadster. NA only offered to replace a tenth of the original jobs, but at least there would still be some work at the plant—and the MG Rover brand wouldn’t vanish completely from the UK.

That deal seems to have changed now, because Nanjing has announced it’s going to start manufacturing MG cars again in Ardmore, Oklahoma, employing about 350 people to build a new MG TF coupe. The new plant arrives after General Motors closed a manufacturing facility in Oklahoma City, sinking 2,400 jobs. More significantly, the factory will be the first plant run by a Chinese auto manufacturer on US soil. Nanjing claims it still has plans for Longbridge, which it will announce on Monday.

Got that? It’s an English car, whose brand was bought out by the Chinese, and it’ll be assembled in the US from parts made in China and the UK. Globalization in action, baby.

The Spirit of 76 Dollars a Barrel: Price Pains Extend from Pumps to Purchasing Offices

2006-07-13T13:30:00.000-05:00

Oil prices will probably hit a new high today due to rising geopolitical drama (Iran, Israel vs. Lebanon, Don King Jong-Il in North Korea). In New York, crude prices have risen 24% so far this year, and the soaring costs are hitting businesses left, right and center. It’s not just reflected in fuel and energy surcharges, either. Since petrochemicals are so versatile and productive—industrial chemistry’s small forward, if you will—costs are climbing for a bevy of different materials and making life difficult for purchasing officers in the back rooms of nearly any company that makes or builds things.

Construction, especially road construction, is feeling the pinch. It costs more to fill up and run machinery, and it also costs more to lay down asphalt—liquid asphalt costs are rising, which could affect the rate at which your local roads get repaired (see also How The World Works’s ramble on the subject here). Asphalt is found in roofing shingles, textile waterproofing and wood treatments as well as streets and parking lots. Even though asphalt pavement is the single most recycled substance in the U.S.—80% of it gets reused—new asphalt is still needed, and it’s getting more expensive.

Another insidious price hike linked to the rise in a barrel of crude is the climbing cost of plastics, the majority of which are petroleum-derived (or contain petrochemical additives). While most manufacturers are absorbing the costs at present, Plastics Technology magazine notes, just before rattling off a list of cost jumps, that “The holiday is over.” If plastics prices squeeze manufacturers hard enough, the costs of everything from bottles to Barbie dolls could inch upwards. Increased plastics prices (especially those for resin-based plastics) is already causing molders and other manufacturers who purchase plastics to change their buying plans. Purchasing.com took a survey, and has seen an uptick in the number of companies who will reduce their buying as a result of the climbing costs.

Recycling capacity for plastics has increased and broadened, which is good. And scientists are working harder to create plastics made from other sources—good old rubber and other plants—that perform as well as the hydrocarbon-based kinds. But until those two trends become mainstream (or the Middle East calms down, whichever comes first), your purchasing agents will have petroleum-derived headaches. We suggest a gift basket of Excedrin. Just make sure you walk to the drugstore, and buy the variety that comes in a cardboard box—not a plastic bottle.

Would Your HR Team Know The Difference?

2006-07-12T15:12:00.000-05:00

Here’s a little piece of investigative reporting from yesterday’s New York Post: an undercover journalist in Queens was able to get a forged green card for $110 and a few hours’ waiting.

“Immigration experts who reviewed my fake green card agreed the document looks authentic - but said that upon closer examination, slight flaws became obvious. I would say a person that does not deal with these green cards will take this as a genuine one," said Maria Delgado, who has seen hundreds of green cards at the Immigration Center at the St. Francis of Assisi Church in Midtown. "A potential employer is not familiar with green cards - and besides, they need the workers, so they won't really question the legitimacy of the cards."

There’s a stereotype that all illegal immigrants land jobs either as nannies, restaurant chefs, construction laborers, or crop pickers. But many illegal immigrants work in industrial food processing (meat packing or poultry processing, say) and manufacturing as well. With the Federal Government debating various bills and promising crackdowns on companies that hire ineligible aliens, you’d think there would be a rush to send potential employers information about how to spot fraudulent green cards or other residency documentation. It would save companies having to defend themselves against charges that they knowingly hired an illegal, and it would protect the rights of legal immigrants who are trying in good faith to get a job. It would make sense, right?

Here’s what the government says about employer responsibilities when hiring:

You must examine the document(s) and, if they reasonably appear on their face to be genuine and to relate to the person presenting them, you must accept them. To do otherwise could be an unfair immigration-related employment practice. If a document does not reasonably appear on its face to be genuine and to relate to the person presenting it, you must not accept it. You may contact your local ICE office for assistance. To get the address and telephone number of the ICE office nearest you, please click the ICE district office directory.

Fair enough. We’re not encouraging discrimination against people who speak English with an accent or who “look foreign” (what does that mean in America anyway?), but how does an employer who has never seen a green card, or who hasn’t seen very many, judge whether a document looks genuine or not? For some people, “Well, it was laminated…” could seem like proof enough. We spent a lot of time on the INS website (and on Google) looking for a compare-and-contrast graphic, or a helpful chart showing common forger’s errors—you know, like the ones you can get to spot counterfeit dollar bills—but no dice. While the HR people at your company shouldn’t have to play “CSI: INS” and spend hours scrutinizing fonts or spectroanalyzing plastic samples every time there are I-9s to fill out, they should at least know what legitimate documentation looks like.

By dint of combing through a few PDFs, we found that there is a publication that will show you what many common identity and immigration documents should look like. It’s called the “Guide to Selected Travel/Identity Documents” form, and you can order it by calling the US Citizenship and Immigration Services’ forms bureau at (800) 870-3676.

Here are a few other interesting articles on the subject of illegal immigration:

In regards to Mexico, we’ve been here and done this before: Ike dealt with it in the ‘50s. (Christian Science Monitor)
Could the problem be solved by building microelectronics factories on the US/Mexico border? (Tekrati)
The Fabricator.com’s blog looks at illegal immigration. [note—their site is a great resource for folks in metal fabrication—as their name obviously suggests.] (The Fabricator)

Chips are Up, Chips are Down

2006-07-12T13:09:00.000-05:00

It’s the one sector of the manufacturing business in which the US enjoys a trade surplus with the rest of the world, and it’s set to have its biggest year ever. The semiconductor equipment industry is booming. As chips are needed for everything from kitchen appliances to smart running shoes, sales of chip fabrication, packaging and test equipment are up a whopping 18.6%. The semiconductor equipment market was worth $17 billion in 2004 and could be worth $37 billion in 2008, according to the head of the largest chip-making equipment firm, Applied Materials.

But some pundits say there’s a slowdown in the making. From Chris Kraeuter at Forbes.com:

“There are too many new factories coming that will soon start pumping out too many chips. ‘It's almost like a tsunami coming,’ says George Burns, president of Strategic Marketing Associates, a research firm focused on semiconductor factories. He expects a good finish to this year for equipment purchases but predicts that order cancellations will be the norm by the second quarter of next year.”

Even if that’s not true, the US’s dominance in this high-tech field could be under threat anyway. Andrew Leonard, in his “How The World Works” blog (please note, that’s a Salon.com link and you may have to watch an ad), looks at a recent US Trade Commission report (PDF document) on the semiconductor industry and sees an alarming statistic: employment fell 46% between 2000-2004. Part of that’s due to a crash in 2001, but the hemorrhaging of jobs hasn’t stopped as the industry has reversed its fortunes.

Also, while the EU and Japan, our two main competitors in the semiconductor equipment industry, are still far behind us, their respective governments are pumping more and more R&D money and incentives into their companies. Federal support for the US semiconductor industry (and many high-tech industries generally) has fallen drastically and will probably continue declining for the rest of the decade (if you don’t believe us, here’s some Senate Committee testimony we found at HTWW). Will 2006 be the first year of a new golden age for this industry, or will it be remembered as “the good old days”?

Corn: Is There Anything It Can’t Do?

2006-07-11T16:18:00.000-05:00

Manufacturers’ R&D Departments Turn Humble Ear Into Gold

When we talk about the “agriculture business” today, we rarely mean small farmers or even large corporate farms that mass-produce simple foodstuffs. Increasingly, agriculture is linked to energy production and the chemical products industry. Food scientists at some of the largest companies are taking corn and soybeans into the lab and coming back with compounds that are used in pharmaceuticals, polymers that find their way into the body of your car, or oils that lubricate industrial machinery more reliably. Via Sunday’s Chicago Tribune, we’ve learned about the R&D miracles happening in just one company’s laboratories: Tate & Lyle. From the article:

“Decatur [IL], home to the largest of Tate & Lyles' labs, is the key to the company's plans. Another 40 or so food scientists work at a lab in Belgium, while a handful more work near the company's London headquarters. Early this year, Tate & Lyle acquired a dairy research firm in Sycamore, Ill., in a bid to expand its research expertise into that area.

Nearly 160 food scientists, each with their own laboratory, are working to develop the next additive that could allow Kraft Foods Inc. or Sara Lee Corp. to create healthier cookies with greater taste appeal or develop the next polymer that can be used to create a new fabric. Since 2002, the company has boosted research and development spending by about 50 percent.”

Tate & Lyle are a British company, originally just a sugar refiner, but now they’re one of the world’s premier food ingredient manufacturers. Have you used the artificial sweetener Splenda? That’s a Tate & Lyle product, and there are hundreds of others that make your food creamier (but with less fat), crispier (without needing to be fried) or more savory (without requiring more salt).

In recent years T&L have turned their attention towards making renewable and sustainable ingredients and products. In partnership with DuPont, they’ve developed a corn-based polymer called Bio-PDO (PDO is for “1,3, propanediol”). DuPont is building a plant in Tennessee that will use this polymer to make a green version of its synthetic fabric, Sorona. It’s being hailed as the nylon of the 21^st Century. We think it’s even better: making Bio-PDO uses 30-40% less energy than production of its petroleum-based counterpart. And speaking of the cereal crop that does it all, Tate and Lyle are also getting in on the ethanol game: they’re building a refinery in Fort Dodge, Iowa, that will eventually process 100 million gallons of the fuel yearly while also providing starches for the paper industry.

Big Love: Automakers Eye 3-Way Alliance

2006-07-10T12:43:00.000-05:00

GM announced late last week that it’s going to consider becoming the third partner in the Renault-Nissan alliance. Not that it needs to enter the global stage—GM already has brands in production all over the world. It’s just that an international partnership might abet GM’s North American restructuring attempt by lowering the overall cost of materials and parts. If the move happens, the three-pronged conglomerate would produce nearly a quarter of the world’s automobiles. GM’s board met on July 7 to begin mulling over the deal.

One of GM’s biggest shareholders, Tracinda Corp. (led by Kirk Kerkorian), has been agitating for the move for a while now. Tracinda Corp isn’t pleased with what it considers the slow progress of GM’s restructuring push, and feels that a global partnership could help the company lower costs of materials. While GM is still the world’s largest automaker, it posted $10.6 billion in losses last year, and rival Toyota is nipping at its heels. Cutting operating costs overseas could help the manufacturing giant at home in the US.

The head of the Renault-Nissan partnership is one Carlos Ghosn (pronounced “cone”), a/k/a “Le Cost Cutter”, who more or less single-handedly steered Nissan away from the brink of bankruptcy by slashing costs after persuading it to partner up with Renault in 1999. Business analysts are looking askance at the alliance; they’re doubtful if it would have long-term benefits beyond a short-term drop in operating costs due to increased purchasing power. One analyst says that large-scale cost reduction would only be possible if the three automakers agreed to collaborate on a project-by-project basis. GM isn’t quite in the horrible state Nissan was seven years ago, so it’s probably not going to want to take orders from France. It entered into a partnership with Italian automaker Fiat (your humble blogger knows a mechanic who claims FIAT stands for “Fix It Again, Tony!” We digress…), and then last year backed out after Fiat continued posting losses.

Pros, cons, and forecasts aside, mass mergers may be the wave of the future for the auto industry. If the GM-Nissan-Renault deal happens, IndustryWeek (among others) says to expect a rash of corporate marriages, including a possible DaimlerChrysler-Volkswagen partnership.

Monday Short Bits: News Digested for the Post-Weekend Brain

2006-07-10T12:40:00.000-05:00

Here are the stories—in policy, politics, and elsewhere—that will dominate the week for business and manufacturing:

This Saturday the G8 will meet for three days in St. Petersburg. The summit promises to be just as much about the West’s relationship to Russia as anything else. (Reuters, BBC News)

Paul Wolfowitz, president of the World Bank, calls on the US to cut agriculture subsidies ahead of the G8 Summit. (Reuters via Yahoo! News)

On Wall Street they’re rubbing their hands over this week’s earnings reports. After recent upsy-downy results due to fears about interest rates and the economy, second-quarter earnings have the street feeling upbeat. On deck to report this week are Alcoa, General Electric, PepsiCo, and Genentech, Inc. (Wall Street Journal)

Foreign Policy Fun:

Tomorrow the Iranians will issue a preliminary response to an incentives package offered them by EU nations in exchange for ending their uranium enrichment program. It was hoped Iran would give a final answer about whether it’d accept the package, but it says that will wait until August 22. Oil prices slid back down below $74/bbl due to optimism about the package. (Reuters, Forbes.com)

Badly rattled by Kim Jong-Il’s missile tests last week, Japan is mulling over the constitutionality (and feasibility) of a pre-emptive strike on North Korea. (Seattle Times, Associated Press)

Honor Among Soft-Drink Rivals, if not Thieves

2006-07-06T15:55:00.000-05:00

Three (very former) Coca-Cola, Co. employees snuck out of the office carrying trade secrets, including samples of a new drink and formulas for a few other drinks. They offered the secrets to PepsiCo, who promptly turned around and handed the turncoats to Coke and the FBI. Undercover agents offered the soft-drink swindlers $1.5 million in exchange for the confidential secrets (note that the “secret recipe” for regular Coke was not stolen). The perpetrators opened up a bank account in anticipation of the payday, which allowed the Feds to make their arrests.

Said CEO Neville Isdell:

"Sadly, today's arrests include an individual within our company. While this breach of trust is difficult for all of us to accept, it underscores the responsibility we each have to be vigilant in protecting our trade secrets. Information is the lifeblood of the company."

Information? We thought it was high-fructose corn syrup, or maybe caffiene. Mmmm. Delicious buzz.

“Small” is in the Eye of the Contract Holder

2006-07-06T15:54:00.000-05:00

While it’s never a surprise that a) loopholes exist in bureaucracies and that b) these loopholes are exploited, it’s still stunning to read about how these things play out in reality. Last year, the Small Business Administration awarded $4.9 billion dollars in small-business set-aside contracts to “small businesses” like Boeing, Northrop Grumman, and General Dynamics. The New York Times has the story here.

OK, But What Would It Smell Like?

2006-07-06T15:47:00.000-05:00

We’ve heard of biodiesel made with the leftover fat from deep fryers—greasel, some people call it, and if you run your VW or whatever with it, your car smells like French fries—but IndustryWeek has a new one for us. They report that the Vietnamese are going to make diesel from catfish fat.

While the area in and around Vietnam has plenty of natural petroleum reserves, the nation lacks refinery capacity or infrastructure, and they’re concerned about pollution. The catfish-fat fuel is the brainchild of Agifish, who has been tinkering with the mix and the process since 2004. Industrial-quantity capacity (10,000 tons of fish, which should yield about 9 million liters of diesel, according to estimates) begins next year.

It’s Still Growing

2006-07-06T15:46:00.000-05:00

…just slower than it had been. The June Institute for Supply Management (ISM) report for the US is out, and it indicates manufacturing expanded more slowly than expected last month. After a slowing of growth in May, analysts predicted that things would start a-boomin’ again in June. From May to June, the index declined by six-tenths of a percent, from 54.4 to 53.8. It was expected to rise to 55. (Note: if the index, which involves a survey of companies in different manufacturing sectors, is over 50, then manufacturing activity is growing.) The biggest factors supplying drag appear to be employment, which contracted (GM, we’re looking at you), and a slowdown in the construction industry.

There’s Cheaper Gold In Them Thar Hills

2006-07-05T14:21:00.000-05:00

Over at the supplyexcellence.com blog, writer Tim Minahan is musing about PC recycling. In the wake of Hewlett-Packard’s success with its computer equipment recycling program, Dell (and to a smaller extent, Apple) has recently announced it’s going to get on the HP bandwagon by offering free shipping to encourage consumers to send back their old bits-and-pieces. Minahan points out that, in addition to applying a fresh coat of green paint to their company images (and probably a having genuine desire to become more sustainable as well as profitable), these computer giants may be driven by a simpler motive: the skyrocketing costs of precious metals.

It’s true: things have come to such a pass in the metals commodity market that it’s more cost-effective for some manufacturers (mainly those who make electronic consumer products) to reclaim metals from old products than it is to buy new supplies of the stuff. A May article from the New York Times, “Panning E-Waste For Gold”, looks at the recycling process and notes that, ton for ton, you can get more metal from waste products than from a mine (8-10 ounces from everyone’s old printer cartridges and iPods vs. 6 ounces from a mine). And the recycling process is much greener than the typical mining process, which requires soaking extracted materials in chemicals such as cyanide to leach out the ore. Expect to see prospectors in your local landfill soon.

Another motivation behind the uptick in recycling programs could be strict new environmental regulations, like the EU’s Restriction of Hazardous Substances directive (which went into effect on Saturday). The new regulation comes on the back of a required electronics recycling program already in place within the EU. So it’s possible that, having tested the recycling programs out in the smaller EU market, Dell and other manufacturers see the sense in rolling them out to other markets (Dell’s is, at present, the only global program; you can see the pdf of the policy here).

Regardless of the motivation behind these recycling programs, we’re pleased that an industry whose products (by dint of their complex materials and “planned obsolescence”) have such potential to impact the environment is shifting to more sustainable practices. We hope that if, in the future, metals prices drop or regulations become more lenient, that the recycling programs don’t dry up as well.

If you’ve got a home machine you plan to upgrade, or if your business has machines that are out-of-date, here’s a list of major manufacturers with US recycling programs (and the products they’ll accept). There are also donation programs sponsored by both government organizations and private NPOs, if your computer equipment is still usable, and those are listed here at TechSoup. Barring that, you could always take a page from these Mac lovers, and turn your old monitors into aquariums.

Possible Bug In Flu Vaccine System

2006-07-05T14:13:00.000-05:00

The FDA has issued a stern warning to pharma giant Sanofi-Aventis after it determined that some of its flu vaccine concentrate failed sterility tests. The concentrate was produced at the company’s Swiftwater, PA plant (which name seems darkly appropriate, given the recent flooding in that part of Pennsylvania) and according to S-A none of the contaminated product found its way into finished vaccine. That’s not satisfactory enough, however, because the FDA learned upon inspection that nobody has figured out where the contamination started; it could therefore happen again. Sanofi insists the problem won’t affect this year’s flu vaccine supply.

Independence Day (Better late than never)

2006-07-05T13:34:00.000-05:00

Happy Fifth! We hope everyone had a fantastic 4th and were able to rekindle the spirit of ’76 by browsing US History.org’s excellent overview of the Declaration of Independence—you could even re-read the D of I, since you probably haven’t since the fifth grade. While you’re holding those self-evident truths, you could also read about recent immigrants in Queens who appreciate their new life in the US, via the New York Times.

Or you could read about fun stuff: here’s the chemistry behind fireworks, and an explanation of how they’re made. And from Logistics Today, we have an overview of how your hotdog got from the feedlot to your barbecue via miracles of the supply chain. Welcome back to work!

Honda Hearts Hoosiers: How Indiana Wooed the Automaker to Decatur County

2006-06-30T12:06:00.000-05:00

After weeks of fevered proposal-slinging, Honda announced on Wednesday that its sixth North American factory will be built in Decatur County, Indiana. The new facility will employ 2,000 workers and turn out 200,000 cars every year. Honda hasn’t yet revealed which cars will be made at the Indiana plant, but its press release says the new plant “will have the same type of flexible New Manufacturing System that is found in Honda’s other auto plants in the U.S. and Canada”. The $550 million-dollar facility will begin production in 2008.

Indiana offered Honda a buffet of incentives, including local highway improvements and funds for worker training. But from what’s known of the details, the packages offered by rival bids from Illinois and Ohio (which has two Honda plants already) were no less juicy. What seems to have won Honda over about Indiana has more to do with supply chain sense than with externalizing costs. Honda says it picked Indiana because of its proximity to auto parts manufacturers and suppliers—Indiana and the surrounding states are thick with smaller automotive component makers, notably the Anna, Ohio Engine Plant that makes 4- and 6-cylinder engines for Honda. The president of American Honda also seemed tickled about being close to the Indianapolis Speedway, where a Honda engine purred under the hood of every car in the 2006 race.

In spite of Honda’s decision to pick Indiana, Illinois and Ohio are not exactly licking their wounds. The new plant’s needs will have a ripple effect throughout the region, providing additional work for component makers and automotive parts suppliers as well as for some of the many thousands of experienced autoworkers looking at unemployment after layoffs and buyouts at Ford and GM. And the creation and design of the plant itself should extend the circle of largesse even further: Honda intends for the Decatur County plant to be its most environmentally friendly plant in North America, with minimal energy consumption, emissions, and “zero waste to landfill”, according to a company statement. Building a green plant tallies with Honda’s overall interest in creating environmentally-innovative products. Makers of green manufacturing equipment and system components must be rubbing their hands together.

Related: Honda Indiana Plant Fact Sheet (WISH TV, Indiana)

A Half-Century of Highways

2006-06-29T15:12:00.000-05:00

On June 29, 1956, President Eisenhower signed the Federal Aid-Highway Act of 1956, creating the interstate system. The development of the highway system has paved the way (ha!) for easy cross-country travel, fast shipping, and an excuse for people to create baffling roadside attractions. In terms of helping the country grow economically, the interstate is probably the single most important part of our infrastructure.

The Federal Highway Administration has been marking the anniversary all year with events and special articles on its website, including this compilation of road songs (your tax dollars at work). We’re marking the anniversary by…um, mentioning it, and by noting some important transport and energy related stories in the news.

1. Ethanol, ethanol, ethanol! The UK’s Independent has a handy rundown of the different types of ethanol, how they’re made, and a candid cost-benefit analysis of ramping up production. The Wall Street Journal (registration required) looks into the pros and cons of cellulosic ethanol, which is ethanol made from grass stalks, wood chips, and trash, rather than from corn-based ethanol (which is what most companies are interested in making).

2. Logistics Today has the dirt on a new hydraulic hybrid vehicle designed for delivery routes. It has a super-efficient diesel engine coupled with hydraulic pumps and storage tanks that store energy. Its fuel efficiency is 60-70% better than that of a standard delivery truck and it emits 40% less carbon dioxide. UPS is testing it in Detroit now.

3. The House of Representatives will vote on the Deep Ocean Energy Resources Act (DOER) as early as today. This bill would allow off-shore drilling to tap into the US’s massive natural gas reserves. The US has the largest natural gas reserves in the world… but pays more than anyone else, per head, for its natural gas. Congresspersons in Florida are concerned about potential impact extraction rigs might have on the tourism industry.

4. In September, Ford set a goal to start pumping out 250,000 hybrid engine vehicles (read: gasoline-electric) per annum by the year 2010. Today they’ve announced that’s not going to happen; the automaker, along with DaimlerChrysler and GM, has decided to focus on flex-fuel vehicles instead.

Don’t Be Such A Stranger

2006-06-29T15:11:00.000-05:00

In a volatile raw materials market, re-evaluating sourcing strategies may be the key to salvaging the bottom line. Expect to see more of your purchasing agent.

Early this morning Tokyo stocks fell based on fears that manufacturers’ bottom lines are being spanked by dramatically spiking costs for raw materials and other commodities (a barrel of crude oil fetches $72 as of yesterday). Procurement boffins forecast a 9% rise in the overall cost of raw materials for 2006, but by spring it was pretty clear they’d have to revise that upwards—in April, according to Purchasing.com, the cost of raw materials had already risen 10%. Costs have continued climbing since then, and are affecting everyone from packaging manufacturers to the makers of batteries. Chemicals, lumber, metals, rubber, paper—nearly everything used to make anything has risen in cost.

What can procurement agents do to make sure they’re getting the best value per spend dollar? According to a recent Aberdeen Group report, “The Direct Materials Sourcing Benchmark Report”, (PDF, free registration may be required) communication helps. Re-evaluating sourcing strategies and company needs more frequently can help procurement agents adjust their buying habits in a volatile market. Procurement agents can pick the brains of designers and accounting personnel at their company to determine alternative materials that might not sacrifice quality or to decide on a new source.

Big Steel Gets Bigger Yet: Urge To Merge Creates Biggest Steelmaker by Factor of Three

2006-06-27T15:09:00.000-05:00

After a long bitter fight Arcelor and Mittal Steel have finally agreed to terms of a merger, pending approval by Arcelor shareholders. The $34 billion deal was inked on June 25^th, and creates a steel fabrication company three times larger than its next biggest rival that will control 10% of the world’s total steel market. Russian steelmaker Severstal was geared up to combine with Arcelor, but had its bid rejected at the last minute in favor of Mittal’s offer. Severstal is most likely going to look for a new acquisition target.

While Europe’s steel companies pair up for summer flings, the US steel industry is concerned about its image. The New York Times reports today about a new multi-million dollar PR blitz commissioned by steel makers aimed at cleaning up the industry’s, um, dirty image. Turns out when most people are asked about the steel industry, they think of 1940s Pittsburgh, PA. As it happens, steelmaking has become an increasingly clean, lean enterprise in the US. The American Iron and Steel Institute is heading up the campaign, and have the ads available on their website.

Monday Blotter

2006-06-27T13:56:00.000-05:00

News Nuggets for the Precaffienated Brain

Financial analysts everywhere waiting for Fed-a-palooza (interest rate announcement, that is) on June 29^th.
China: it’s growing, it’s hungry, and it’s churning out wind turbines like nobody’s business.
GM employee buyout offer attracts 35,000 takers.
Bill Gates announces he’s going to concentrate on his charitable foundation, not Microsoft; Warren Buffet promptly doubles size of Gates Foundation with gift big enough to fund Germany’s military for a year.
Forbes wants to know: are women better entrepreneurs?
French Prime Minister wants to take over Airbus. Shareholders strangely quiet.
Major US CEOs earn 262 times their average worker’s pay (the ratio was 300:1 in 2000).

Mmmm, Friday

2006-06-23T09:35:00.000-05:00

Let your brain cruise gently to a halt with the following distractions:

Multi-tasking: Japanese gals teach English and Aerobics at the same time! (YouTube: has sound and music, so be aware.)

Do you need to win at Scrabble? Invent your own authentic-looking dictionary entries here: www.hetemeel.com

Hey, did you see this list of the 15 Strangest Coincidences? You did? Huh.

Depending on your preference, this could be the best or the worst link ever: 100 different versions of Stairway to Heaven (some of the band names are a little rude).

Lowdown on the Slowdown: Bring Us The Head Of Monsieur Airbus!

2006-06-23T08:53:00.000-05:00

Here's a bummer of a headline for your weekend:

Demand for manufactured goods declines (Yahoo! News)

And unlike some of the sloppy headlines about that report about a climate change report we mentioned down below, this one is pretty much dead on. Durable goods orders declined (that's a PDF file from the Feds) for a second straight month in May. The drop was only 0.3%, compared to April's heart-stopping 4.7%.

Actually, the drops were less pronounced than that if you exclude the transportation and defense sectors: -0.1% for May, and -1.0% for April. Most reports on the subject blame "the volatile transportation sector", especially commercial aircraft.

Faced with a triple-whammy of cooling housing prices, rising interest rates, and high energy costs, it's a safe bet that the US economy as a whole will not clip along at the healthy 5.3% rate of growth it posted during the first three months of 2006. When the numbers come in for June, economists expect to see overall growth in the 3% range.

Related:
Leading Economic Index Signals Slowing Economy (IndustryWeek.com)
Emerging Economies Create Global Competitors that are Challenging Western Leaders In Every Industry (Manufacturing News)
Jobless Claims Climb by Most in 5 Weeks (Forbes.com)

About That Climate Change Report

2006-06-23T07:45:00.000-05:00

We're going to broach the following topic because policy based on climate change has huge potential to affect manufacturing and industry, and because there's a debate in the US about whether climate change is actually happening because of humans.

Yesterday a panel of experts working on behalf of the National Academy of Sciences released a report to Congress. Here are some of the headlines it's inspired:

Earth Hottest It's Been in 2,000 Years (via Yahoo! News)
Last 25 Years Warmest on Earth Since 1600 (via Reuters)
Global Warming Stoked '05 Hurricanes, Study Says (USA Today)
US Panel Backs Data On Global Warming (LA Times)
Panel Supports a Controversial Report on Global Warming (The New York Times)

Unless you read the articles very closely you would think that scientists have undertaken a new study about climate change. This isn't true. Here's what happened:

In 1999, three scientists published a paper asserting that the Northern Hemisphere was warmer during the last years of the 20th Century than at any time in the previous thousand years. The scientists came to this conclusion by studying what is called "proxy evidence": tree rings, ice cores, glaciers, ocean and riverbed sediments, and good old human recordkeeping (which only applies to the last 150 years or so).

Some people read the report and said "Look! Absolute rock-solid proof that global warming exists and is caused by humans!" Others read it and said "The evidence was cherry-picked! The planet's getting warmer because of a natural cycle! Fraud!"

The argument raged for years. In 2005, Rep. Joe Barton (R-TX) actually opened a congressional investigation targeting the three scientists. To clear the air, Rep. Sherwood Boehlert (R-NY), asked the National Academy of Sciences to look into the methods and funding behind the 1999 paper and decide whether the study was conducted in a scientifically sound fashion, or if it was influenced by partisan backers. Yesterday's report is an analysis of an earlier study, not new evidence. Media outlets that suggest otherwise are being either sloppy or misleading. (Here's a good story from the BBC about how overhyping has affected acceptance of human-caused climate change evidence.)

So what did the NAS panel conlcude?

Examining proxy evidence is a sound, legitimate method of researching climate changes;
The scientists who conducted the study described in the 1999 paper did not cherry-pick data to please environmental lobbyist types;
Methane and CO2 spiked in the late 19th and through the 20th century, and the correlated temperature rise strongly supports the assertion that climate change is caused by humans;
Making the sweeping claim that Earth is hotter than it's been in 1,000 years is not kosher: the evidence for global warming since 1600 (especially the last 30-25 years) is strong and abundant, from 900-1600 it is less certain, and anything before 900 is just a pretty good guess. It would be more truthful to say that Earth is hotter than it has been in the last 400 years.

The NAS panel also concluded that using proxy evidence could help settle the question about whether climate change affects hurricane strength and frequency. They suggested that future studies go back and re-examine proxy evidence collected decades ago to investigate precipitation levels (yes, they really can figure that out by looking at a hunk of stratified rock). And they also said this, which made our eyes pop:

Surface temperature reconstructions for periods prior to the industrial era are only one of multiple lines of evidence supporting the conclusion that climatic warming is occurring in response to human activities, and they are not the primary evidence.

Frustratingly, they don't say what the primary evidence is. But that's science. We still haven't finished the theory of gravity 319 years after Isaac Newton's Principia, so this debate promises to go on for a while yet.

Useless Trivia: Alumininininum

2006-06-22T11:03:00.000-05:00

If you work with metal and if you've ever dealt with English-speaking customers or colleagues outside the US, Wikipedia explains how the US got to calling it aluminum while the UK calls it aluminium.

Good for the Environment, Hard on Your Buyer

2006-06-22T09:56:00.000-05:00

Purchasing.com's June magazine issue serves up an overview of new global environmental regulations facing manufacturers. The article concentrates on the EU's Reduction of Hazardous Substances framework and also notes new tough regulations in China, Korea, and several US states (OK, California) that will directly affect manufacturers of many types of products. We've covered the RoHS framework, and its big baby brother, the Energy Using Produucts directive, which is due in 2007. Some interesting tidbits from the article, which you should read:

EuP research documents show that 25% of the total energy used by a computer in its lifetime is consumed in the manufacture of it;
While the EU's RoHS is self-declarative, China's RoHS is much more strict and will actually require certification, offered by new testing labs being built in China.
The EU's RoHS only applies to electronics manufacturers; China's applies to anyone.

If you can't hire a crack team of researchers to assist your buyer as all these laws come into effect, please at least make sure you've allocated funds for supplemental office equipment, and possibly some at-home support products.

Seriously, though, eMvoy.com is all for environmentally sustainable manufacturing, and we think it's good that political organizations are using their clout to encourage reducing pollutants in the products we use on a daily basis. It's hard not to agree with London's Guardian Newspaper when it says:

Global problems demand global policies... Co-operation in the European Union...without exaggeration - could be as important to the environment in the first half of the 21st century as it was to peace in the second half of the 20th. EU agreements have already brought major environmental benefits, from dramatically improving water quality and waste disposal to achieving higher product standards and protecting endangered species and habitats.

There's a genuine market for sustainably-produced products in Europe-- people there, according to our operative in the UK, are much more aware of and concerned about global climate change than people in the US. Good regulations can nudge companies into better serving that market and helping it grow. We just wish the regulations were a little more carrot and a little less stick.

Also, we would certainly applaud a better coordinated effort between, say, the EU and China, or the EU and India, to consult on their differing RoHS laws so that it's easier for companies who want to trade in those nations to plan how they design, build, and package the new products they want to bring to the market. The China RoHS law, even allowing for translation to English, is really painful to read and very vague.

Still, imagine if there weren't an EU? Imagine if you had to navigate all of those tiny countries' weird, vague laws to get a product sold there (The UK: "Our law is whatever France's isn't." France: "Our law is whatever the UK's isn't; you sort it out.")? It would be even more of a nightmare.

Anyway, if you're a buyer or a designer or an executive at a company that's dealing with any of the new environmental issues, please feel free to write or rant below about your experience preparing to meet the new guidelines.

The Estate Tax: Half a Loaf Is Better Than None, Says House GOP

2006-06-22T08:22:00.000-05:00

The House of Representatives may vote on an estate tax bill today. Republicans have long advocated the abolition of the estate tax (the "death tax"), saying it retards economic growth (their argument: why bother to be really successful when the government takes a big piece of your pie?) and ruins the legacies of small-business and farm owners.

After a complete repeal of the estate tax failed to clear the Senate several times (including a 57-41 squeaker on June 8th), House Ways and Means Committee Chairman Bill Thomas (R-CA) introduced a tweaked compromise bill that has a better chance of passing the upper chamber. Included in the compromise:

Raise the tax-free exemption level from $4 million per couple to $10 million per couple, with automatic adjustments to inflation built in;
Cut the tax on estates over the exemption level from 46% to equal the Capital Gains Tax level (currently 15%, due to rise to 20% in 2010, though the GOP is fighting that rise too)

GOP members of the House are promoting the compromise as a temporary relief on the way to total shutdown of the tax. Opponents of an estate tax repeal say that since the new compromise will protect all but the most wealthy families (only 0.15% of estates will be affected, if the Washington Post is to be believed), and it therefore suits them as a permanent solution to the estate tax issue. So even if Thomas's compromise makes it to the President's desk later this year, expect to see the estate tax issue come lumbering back, zombie-like, midway through the next president's term.

More about the estate tax issue:

The Wall Street Journal, in a prescient 2005 article, lays out what it would consider acceptable for an estate tax compromise. If you can't access WSJ online, there's an abstract and a discussion here at TaxProfBlog.

Here's a lucid, if ranty, opinion piece advocating the estate tax from Jonathan Chait in the LA Times.

A handy, free-of-IRS-babble look at the statistics for the death tax are in the sidebar of this Appleton, WI Post-Crescent article.

Airbus A380 Crashing Before Takeoff (Metaphorically Speaking)

2006-06-21T11:46:00.000-05:00

It's not the most important story in the manufacturing world right now, but when a company's failure to deliver on time causes screaming matches in the French parliament ("Bring us the head of Monsieur Airbus!"), we can't resist. And the disaster surrounding the Airbus A380's woes provides a nice, neat little parable for manufacturers of any size who overpromise and underperform (or in this case underdeliver - the jet seems to work just fine).

Earlier this month Airbus announced a second round of delays in the production of its new A380 high-capacity passenger jet, and couldn't rule out the possibility of more delays to come. There are also new allegations of insider trading following a suspicious stock sale being leveled at a top Airbus/EADS executive, Noel Forgeard. Forgeard and two of his family members exercised some stock options this past March and pocketed 2.5 million Euros (about $3.2 million USD). Not long after that, the first delays of the A380 became public. Investors in the venture are now calling for a probe of the sale.

Airbus and its parent company are in serious danger of losing a major customer. The International Lease Finance Corporation, which leases all kinds of aircraft to many airlines, has orders for 10 A380 aircraft totaling $3 billion. In light of the latest delays, the ILFC says it has a case for possibly scrapping its contract. It's not the biggest customer - that would be Emirates Air, who are waiting for 43 of the airplanes and "have not thought" about canceling their order (neither has UPS, but their 10 airplanes aren't scheduled to arrive until 2009, so they're not fussed about the current round of delays). But if the ILFC calls off its support, other customers may get skittish and begin jumping ship, so to speak.

Furthermore, in an economic climate that hasn't been favorable to airlines, some companies are having second thoughts about continuing to wait for the A380. The Malaysia Airlines Employees' Union is trying to convince Malaysia Airlines, which is having financial troubles of its own, to postpone, downsize or cancel its order for six A380s.

If a significant number of customers drop their A380 orders, Airbus will be in trouble not only with its shareholders, but also with its many, many suppliers and partners who've worked to make the A380 a reality (to see everyone involved, click through to the Airbus website, then click on the "Partners" option to play with an interactive map).

Some of the major companies supplying parts, systems, and components to the A380 include Northrop Grumman, Rolls-Royce, Alcoa, Goodrich, and Engine Alliance. Engine Alliance is a collaboration between General Electric and Pratt-Whitney, which, judging by its website's splash page, was formed specifically to develop engines for high-capacity aircraft. One can only imagine the blizzard of lawsuits that will bury Airbus if a number of customers drop orders for the A380.

Here Comes Speed Racer: New Superfast Chip is Supercooled

2006-06-21T11:45:00.000-05:00

IBM and the Georgia Institute of Technology have developed a new computer chip that they've clocked at 500 gigahertz (that's 500 billion calculation cycles per second). The silicon-and-germanium-based semiconductor chip (called SiGe by its creators) is about 250 times faster than the most common "fast" chips in today's commercial computers and cell phones. At present, the new chip only hits 500 gig when supercooled with liquid helium to the mind-bogglingly low, only-found-in-outer-space temperature of -451° F. That's very close to absolute zero (-459.7° F), the coldest known temperature in nature.

At room temperature, the new chip runs at 350 gigahertz - still considerably faster than anything on the market at present. The chip in a high-end cell phone, for example, runs at 2 gigahertz, and a top-of-the-line home computer clocks at 3 gig. Developers predict that the new SiGe chip technology could someday operate at 500 gigahertz without the benefit of supercooling, and may even approach a terahertz (1,000 gigahertz).

Other superspeedy chips have been tested in labs, but the IBM/Georgia Tech product has turned heads because it is created more or less conventionally: like the chip in the computer on which these words were written, the 500-gig wonder is made of silicon (and a little bit of germanium), so it can be manufactured cheaply. Other super-chips are made of less common or experimental materials, and would cost much more to produce.

It won't be showing up in anything you can buy anytime soon, but expect to reap performance benefits of the superchip in two or three years. Possible early applications for the chips include enhancing high-speed Internet connections so users can download high-definition television and movies-on-demand.

Sources: The Register (UK), International Herald Tribune, Wall Street Journal

The Stuff That Dreams Are Made Of (if your dreams include high-tech building materials, that is)

2006-06-21T11:44:00.001-05:00

This week saw the announcement of two manufacturing technology breakthroughs. In the US, Atlanta-based Novelis revealed what is probably the most far-reaching development in metalworking technology since the late 1930's. Novelis Fusion technology allows different alloys to be cast together simultaneously into a single aluminum rolling ingot. The ingot can then be made into a flat sheet product with different surface and core properties.

Developing the new product cost less than $100 million. 25 customers have bought and are using the new metal. Novartis plans to start out making 70,000 tons of the material this year at its upstate NY mill (the WSJ says that is only about 10% of that plant's capacity). The new multi-alloy material has application potential in the architectural, automotive, aerospace, and high-tech manufacturing industries.

Also this week, Italian scientists announced that they have created a new ultra-durable, almost-hard-as-diamond type of glass that could be used for construction or as a coating for microelectronics. The product is called amorphous carbonia and is created by taking dry ice (you know, frozen carbon dioxide, the stuff they use to pack mail-order ice cream or blow fans over to add atmosphere to stage shows) and subjecting it to enormous pressures. This forms a hard glass, albeit one that doesn't yet survive outside the lab. The next challenge is to make a product that survives at room temperature.

The glass substance also raises non-manufacturing related questions: it's possible that planets like Jupiter, which have a very high CO₂ concentration in their makeup, could have carbon glass near their cores.

Sorry, Your Flight Is Delayed: Airbus 380 Customers To Wait Even Longer For Jumbo-Jumbo-Jet Deliveries

2006-06-21T11:44:00.000-05:00

Airbus has announced that design changes to the 500-passenger Airbus 380 will force another 6- to 7-month delay on production (the company's stock slid as a result). It's the second such delay for Airbus. The changes are not major, nor does the safety or certification of the titanic airliner depend upon these changes. It's just that moving around small pieces of equipment, like the 132-channel DVD system, has knock-on effects in the way the plane's wiring system is arranged. The number of planes to be built this year will be cut from 25 to nine. 16 different airlines have ordered 159 of the new planes from Airbus.

Singapore Airlines, Emirates, and Qantas are the initial airlines due to receive the 380, and they will get their first planes delivered on schedule - but only a handful of the number they were expecting. Airbus expects to pay penalties due to the disruption in its timetable. More worrying was that it couldn't rule out the possibility of more delays. An aviation industry consultant quoted in the New York Times said "If I were a buyer and this were happening to me, I might use this as leverage to get something additional out of [Airbus]." eMvoy.com's unsolicited advice for disappointed Airbus customers? Don't ask for a new DVD system, or you might have to wait even longer.

In the meantime, while there is no other company making jets on the scale of the 380, airlines that were expecting to have a 380 on hand are turning to Airbus competitors to fill their fleet needs. Singapore Airlines will order 20 new 787-9 Dreamliners from Boeing. Boeing also plans to roll out a new model of its trusty 747, the 747-8, which will seat about 450 passengers. It currently has firm orders for a freight version of the 747-8.

Accounts Payable, Receivable, and Outsourcable

2006-06-21T11:43:00.001-05:00

Today (14 June 2006) IndustryWeek points out the results of a recent Aberdeen Group, Inc. survey about procurement outsourcing. 170 companies participated in the survey, and almost 50% of those companies said they plan to outsource some aspect of their purchasing departments this year. Those companies already outsourcing some aspect of their procurement operations said they plan to contract out even more in 2006. The Aberdeen Group survey seems to jive with an earlier report on the trend by the Everest Research Institute, published in December 2005, that said procurement outsourcing was going to increase because of its potential to directly impact a company's bottom line.

While more companies are outsourcing procurement functions more often, the trend isn't widespread and appears to be selective of specific purchasing roles, rather than "lock, stock, and barrel" the way IT outsourcing has been, according to business columnist John Moore. The Aberdeen Group's report (available free from Aberdeen Group's website - you may need to register) says "[businesses] have waded - rather than plunged - into outsourcing. Nearly 60% that outsource today are outsourcing no more than 10% of their procurement functions." Furthermore, most businesses who outsource purchasing functions do it to handle non-critical supplies such as office equipment, or to take care of auditing and invoice reconciliation.

Outsourcing is seen not only as an opportunity to lower costs; it can free up in-house staff to focus more on strategic activities and less on getting the best deal on staplers (Swingline or Boston?). Contract purchasing firms also have access to supplier intelligence and broader spending category savvy, which makes them even more attractive to businesses. The Aberdeen Group points out that, as with any other kind of outsourcing, businesses ought to have a good idea of their how their current spending operation works before considering an outsourcing deal.

Current leaders in procurement services include companies like IBM, Accenture, and Affiliated Computer Services.

Britain Can Make It

2006-06-21T11:43:00.000-05:00

Giving the lie to the conventional wisdom that a strong currency means fewer exports, Great Britain's manufacturing industry is performing better than it has in ten years, according to a survey of the UK's manufacturing sector. The good times are rolling largely due to business from abroad - apparently other countries, particularly other EU member states, are nutty for British exports. Domestic demand remained flat. The foreign demand is slightly mystifying, given that the British pound is the strongest major currency going at the moment (the UK is a member of the EU, but didn't join the Euro. Can you blame them when their coins are so cool?): Â£1 fetches about $1.87 or €1.45 nowadays.

According to London's Guardian, more companies are planning to expand their payrolls than to slash them - welcome news in a country where manufacturing has bled jobs until as recently as last year, and has generally taken a thrashing year in and year out for the past three decades. Still, in Britain as in the US, fears of interest rate rises may temper the good news. While the Bank of Britain is mulling a rate rise, a far more damaging possibility would be a European Union rate increase. The EU is the UK's major trading market.

A Slow Boat Away From China

2006-06-21T11:42:00.000-05:00

Sunday's Chicago Tribune has an excellent article about the United Tooling Coalition, a three-year-old alliance of Michigan tool and die companies, and about the tool-and-die industry in general. The Coalition's member companies, all competitors, are working together to make US tooling producers more attractive to companies like Toyota. Domestic tooling producers have taken a major hit as Chinese and other foreign companies undercut them- according to a source in the Trib article, as many as 30% of American tooling companies have gone out of business due to foreign pressure.

The United Tooling Coalition's strategies revolve around the adoption of lean manufacturing . The members recognize that in order to change the industry's apparent fate, they may have to change its culture. Dave Martin, the owner of a tool-and-die shop, says: "We can't just sit here and get beaten up."

There is a small, emerging trend in favor of the UTC's efforts - the Rochester, NY Democrat and Chronicle has a story about companies who are reverse-offshoring. That is, they moved their labor overseas, and then decided it didn't work so well. Writer David Tyler sums it up:

"Businesses have found they can run into many troubles [with offshoring] - high shipping costs, longer lead times, delays in customs at the border, production defects. Unreliable, or in some cases unscrupulous, foreign business partners can be another negative factor."

Offshoring becomes less attractive when a company decides to go lean, as well - a supply chain spanning 12 time zones isn't particularly efficient.

Still, reverse offshoring is so far a drop in the bucket:

China

's labor force is growing, not shrinking. Manufacturing News quotes a report that pegs the Chinese manufacturing workforce at 109 million people (the

's manufacturing workforce has 14 million, and actually lost jobs in May). US manufacturing firms face formidable obstacles when they want to keep jobs and production domestic; changing the trend, or adapting to the conditions so that

companies can survive, will require innovative thinking and a willingness to do things outside the comfort zone. Like, say, collaborating with your competition.

Energy Prices Begin Nibbling at Consumption Rates

2006-06-21T11:41:00.000-05:00

Friday's Wall Street Journal reported that while affluent consumers continue spending at a healthy rate, middle- to lower-income consumers are beginning to pinch pennies because of high energy costs. The main indicator of this trend comes from auto sales. The WSJ says:

...last month was good for luxury brands and foreign companies catering to affluent customers. Toyota, for instance, saw sales rise 17%, driven in part by its Luxury Lexus brand, while German luxury car maker BMW AG reported that sales of its BMW-brand models grew 7.1% - By contrast, U.S. auto makers, who draw more lower-income buyers, continued to see a drop in sales, especially of sport-utility vehicles, and all three blamed the recent rise of gasoline prices to the range of $3 a gallon. General Motors Corp.'s sales were down 12.5%, while sales at DaimlerChrysler AG's Chrysler Group dropped 11%. Ford Motor Co.'s sales fell 2%.

During the oil crisis in the '70s, Americans turned in large numbers towards smaller, more fuel-efficient Asian-manufactured cars for the first time. That appears to be the new hip retro trend all the kids want to get in on. The New York Times notes that Asian-produced autos took a 40% share of the market last month, and that US manufacturers' market share fell to 52.9%, the second lowest share in history.

Look for manufacturers like Toyota and Honda to continue gaining market share while gas prices remain high.

Energy prices are also beginning to affect corporate investment. IndustryWeek reports on a PriceWaterhouse Cooper survey showing that "energy-vulnerable" businesses are reluctant to spend capital or expand payrolls in the months ahead. According to that write-up, 65% of US consumer product manufacturers consider energy costs a major threat to future growth.

Notes from around the web

2006-06-21T11:40:00.000-05:00

IndustryWeek notes that the new Reduction of Hazardous Substances act is set to go into effect in a month, and that US electronics producers had better be ready to comply with the new regulations or risk being locked out of EU member state markets. eMvoy.com reported on the RoHS act earlier with regards to the Chinese electronics industry.

And the European Union was just getting warm with the RoHS directive, y'all: another more far-reaching law goes into effect in August 2007 that will affect electronics manufacturers, not just component producers. Electronics Weekly points out that the new directive, called the Energy Using Products directive (EuP), will impact production from the design level upwards. We'll look at this new directive in more depth soon on eMvoy.com - stay tuned.

Henry Paulson, the President's nominee for Secretary of the Treasury, says that he "really believe[s] that the decline in the dollar, the orderly decline in the dollar, will lead to a natural adjustment" in the US's staggering trade deficit. The Wall Street Journal, otherwise pleased with the nomination of the former head of Goldman Sachs, says "uh-oh": that kind of talk seems irresponsible to them in an economic environment rife with new inflation fears.

India's manufacturing sector grew 9% in May, and the overall Indian economy grew 8.4% in 2005-06. (IndustryWeek.com)

Any welding going on at your company? Industrial gases distributed by Airgas are going to rise in cost: 10-20%, some as soon as June 26^th. (via Welding Design)

Newsflash: Fed Says Congestion Wastes Time and Money, Ticks People Off

2006-06-21T11:39:00.001-05:00

This week the Federal Government announced a new six-point plan from the Department of Transportation designed to combat and ease congestion in the American transportation system. The plan, explained somewhat vaguely in a 16-page document entitled "National Strategy to Reduce Congestion on America's Transportation Network", says that congestion is a scourge on the economy, draining $200 billion a year in wasted fuel, man-hours, and resources. The plan also notes the societal impact of your daily soul-draining stop-and-start commute on the not-so-freeway, pointing out that additional time spent commuting is related to the drop in community affairs participation (The report's authors cite Robert Putnam's book, Bowling Alone, as their resource for that statistic. If you're a nerd like our blogger, we recommend it: it'™s readable sociology and it has lots of charts!). Reducing congestion is also an idea environmentalists like: fewer cars idling in traffic means less soot and smog emitted into the air.

The DOT's major concern, of course, is about the impact congestion has on the business community, as shipments get delayed and delivery vehicles lose time stuck in traffic. The plan aims to reduce, not just slow the growth of, transport congestion. It's aimed at airports as well as the roadways and rail system (see ATA's remarks on the plan here), with a special emphasis on LaGuardia in New York. Other highlights of the plan include encouraging private investment in transportation infrastructure, a la the Chicago Skyway, and introduction of congestion charges for urban centers, a la London, England. (This is ironic; there's currently a teapot tempest brewing about the fact that US Ambassadors in London refuse to pay that highly effective congestion charge. The Mayor of London had a few words on the subject.).

You can read Transportation Secretary Mineta's remarks at Logistics and Supply Chain Intelligence. eMvoy.com picked up on this story while browsing Logistics Today.

Purchasing Agents' Jobs Are About To Get Harder

2006-06-21T11:39:00.000-05:00

Pity the purchasing agent who works for electronics producers selling in the EU. For the last two years he or she has worked to source components free of certain heavy metals in order to meet the deadline for the Restriction on Hazardous Substances directive (abbreviated as RoHS; effective from July 1, 2006). Now procurement officers will have to jump through a new set of hoops as the 2007 deadline for the Energy Using Products framework directive comes into view.

The EuP directive is the next step in the EU's march towards making the electronics industry more environmentally friendly. It's a profound, far-reaching directive that will affect every phase of production from design upwards. The directive aims to determine the amount of environmental impact caused by production and use of many common electronic products. A consumer ratings system would be developed, allowing end-users to compare the energy impact of electronic products before buying them. Then, the goal is to lower environmental impact incrementally, reducing energy used not only by the finished product, but also by the entire supply chain and manufacturing process involved in making the product. It's a huge task.

At the moment, it's still possible that the electronics industry will rally to build voluntary compliance into this directive instead of legally binding enforceable requirements. The implementation of some requirements, which would come into law next year, is probably inevitable. For now, manufacturers and their purchasing agents need to assume they're going to have some new legally-backed targets to meet. They'll continue examining their supply chains and consulting with designers and engineers about how to make their products work the same way with different components.

Which brings us to today's digression: with all these new directives pushing companies to change the way they make their products, isn't it possible we sometimes neglecting the role that procurement professionals play in driving innovation? A purchasing agent in a manufacturing firm isn't just the paper pusher who orders staplers for the front office, after all. He or she plays an integral role in the final appearance and performance of the company's products by sourcing components or materials from suppliers.

And with the advent of these new green directives for trading with the EU, purchasing agents are responsible for using their firms' business as leverage to get suppliers to, say, reduce the amount of cadmium in that electronic component or find a way to produce those plastics a little more energy-efficiently. If these EU directives are effective in reducing waste, curtailing pollutants, and improving recyclability of electronic products, it might not be total hyperbole to say that purchasing agents have helped save the environment. Don't let the engineers have all the glory.

Just a thought.

On the lighter side!

Addendum to the sturm-und-drang article about purchasing agents' new challenge above: buyers for Macy's, Inc., seem to have fun, according to the New York Times' Cathy Horyn, who was a fly on the wall at a recent buyer's meeting. ("Macy's is so Excited about Crinkle Cotton" - free registration required.)

Will We See More of the C-17?

2006-06-21T11:38:00.000-05:00

It's been a busy week for Chicago-based aerospace giant Boeing. Production of commercial airplanes at their historic Long Beach, CA facility ended on May 23 after delivery of the last new 717 airliners. Also on May 23, a new military production plant in Georgia opened for business. Yesterday the New York Times ("The Plane That Wouldn't Die", free registration required) reported on hush-hush, sorta-against-Pentagon-rules lobbying efforts on Capitol Hill aimed at extending production of Boeing's C-17 Globemaster III, a massive cargo jet used to airlift heavy equipment and supplies overseas.

The C-17 is produced at the Long Beach, CA military facility and Boeing employs 6,500 workers on the line at that plant. 42,000 jobs in total rely on the C-17's continued production. The current Pentagon contract calls for production of the jet to end in 2008, after the 180^th plane is completed. And that's fine with the Bush Administration, which wants to end production of the plane to free up money for other projects.

The Air Force (and Boeing) feel differently. Friends of the C-17 have been meeting with their Congresscritters, and managed to score approval for at least three more jets from the House Armed Services Committee on May 11^th. The Senate Armed Services Committee begins looking at the matter this week.

Senator John McCain (R-AZ), no big fan of Boeing, is a senior member of the committee. McCain has been a bugbear for Boeing in the past, digging up too-cozy connections between the Pentagon and Boeing officials in 2003 (that particular scandal actually got adapted for an episode of The West Wing). Senator McCain and SASC Chairman Senator John Warner will begin to scrutinize the defense industry's contracts with the Pentagon today, trying to rout out sweetheart deals and waste.

It's a safe bet they'll be looking very closely at the deal to extend the life of the C-17.

Green Manufacturing Regulations: The EU Says "Jump!", China Says "We'll jump higher!"

2006-06-21T11:36:00.000-05:00

The European Union's Restriction of the Use of Certain Hazardous Substances directive for electronics manufacturers comes into effect on July 1 (and makes a great beach read, take my word for it). This environmentally-focused regulation aims to

ensure that...new electrical and electronic equipment put on the market does not contain lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (PBB) or polybrominated diphenyl ethers (PBDE).

These chemicals and metals have been found to cause human health or environmental damage, and they're un-recyclable. The EU is trying to cut down on electronics waste products through its WEEE (Waste Electrical and Electronic Equipment) directives, and reducing these substances from electronics products makes them more recyclable. Electronics manufacturers within Europe have had to alter their products and processes to comply.

China doesn't want its gadgets locked out of Europe (trade with EU members accounted for 25% of China's electronics exports in 2004). The Chinese government has introduced similar environmental regulations for its own manufacturers. In fact, China's directive, called the Regulation for Pollution Control of Electronics Products, goes even further than the EU's policies: China aims to eliminate, not just reduce, the use of those six hazardous substances in its electronics products.

Some products will be on line for the July 1 EU deadline; others have transitional plans in place to bring them in line with the directives later.

A nice trickle-down effect of these green directives is that manufacturers in China (and foreign firms doing business there) have begun to consider the environmental impact of their entire operations, not just the products they're shipping to Europe. After years of disastrous (for the environment) development, the government is beginning to bring environmental regulations into force, and firms doing business in China are building entire factories to green standards. The new Plantronics, Inc. plant in China has earned an LEED certification from the US Green Building Council. Intel is said to be considering following suit with its plant in Shanghai, and China's own SMT (Surface Mount Technologies), which has three factories, is the first company in China to become a Sony OEM Green Partner.

It's heartening to know that China, referred to sometimes as "the world's workshop", is starting to take steps to reduce negative industrial impact on the environment even as its economy continues to grow. More positive pressure from its trading partners - both countries and companies - can only serve to speed up the process.

Excited about the weaker dollar? Look again:

2006-06-21T11:34:00.000-05:00

Much ink has been spilled in the past two weeks over the sudden sharp decline of the US dollar on the foreign exchange markets. (Just look at this 30-day chart for the dollar vs. the Japanese yen.)Financial and industry analysts have lunged for their tea leaves, trying to determine what the dollar's slide means in terms of the economy at large.

While it's pretty safe to say that Americans planning to vacation in Europe will be disappointed by this turn of events (especially if you want to visit the UK, where the pound gets nearly $2 nowadays), what about US manufacturers? After all, a weaker dollar means our goods are more affordable to buyers abroad. Will the decline in the dollar mean more money coming in from abroad, and high times for businesses that manufacture and sell to customers overseas?

As always with these questions of finance, the answer is yes... and no.

Certainly a weaker dollar means that some American manufacturers will see higher profits from overseas as foreign buyers snap up cheaper US goods. Typically, manufacturers of unfinished products (steel as opposed to sneakers) make out better when the dollar declines - even though our goods are more competitively priced, finished products from Asia are still much cheaper.

In fact, because the Chinese have fixed the yuan to a set value against the US dollar, a weaker dollar actually encourages investment in Chinese manufacturing. Companies in other Asian countries will want to move their production facilities to China to take advantage of lower production costs. That's great for them, but bad for us, because it means we'll be flooded with even more goods made in China, and the already staggering trade deficit will climb higher instead of lower. Analysts at the Merk Hard Currency fund note that

While a middle class in China is growing, we doubt that the pickup in worldwide consumption will be fast and sufficient enough to rescue the current account deficit. It also remains to be seen what these consumers will consume - what consumers [sic] goods do we produce in the US that are attractive to Chinese consumers?

Ouch. Getting even more cheerful, the Merk analysts remind us that "A lower dollar will not re-create the US manufacturing industry."

Asian competition aside, a weaker US dollar also translates into higher production costs for companies who rely on overseas suppliers for parts, materials, or machinery. And if production costs increase sharply enough, manufacturers will have to pass costs down the line to their customers. In plain English, that's inflation, which helps nobody. Economic organizations such as the Organization for Economic Cooperation and Development warn that the weakening dollar plus the trade deficit could weigh very heavily on the US economy as a whole in the long run.

In the past, a weakening in the dollar has been good news for manufacturers. Times have changed. While your company may see a bump in profits in the short term, a long-term decline in the dollar could put everyone - investors, manufacturers, and consumers - in a bind.

For further reading, here are a few links that give an excellent overview of the subject:

The Chicago Federal Reserve Board: Weak Dollar, Strong Dollar

Mike Whitney at Manufacturing Center.com: What does a weak US Dollar Mean?

CNNMoney.com (from 2004): What a sagging dollar means for you