August 2013
New research hopes to improve production management

A new study by Michigan State University may define successful techniques for strategic sourcing to better supply chain optimization, according to The Association for Operations Management. The APICS Foundation is working with staff from MSU, including David Closs, department chair of supply chain management, to evaluate supply chain factors. MSU had the distinction of having the no. 1 ranked supply chain management program ahead of the Massachusetts Institute of Technology, according to its site.

The study hopes to answer how a supply chain can become strategic by researching a company's business model, management and the relationship between its model and its supply chain.

"Supply chain optimization goes far beyond being better, faster and cheaper," Closs said. "We need to understand the factors that facilitate and inhibit the transformation of a supply chain from tactical to strategic."

The report titled, "Supply Chain Management: Beyond the Horizon" has the potential to change how global companies source their products and handle their supply chains.

"This major undertaking, in partnership with the team of esteemed educators and researchers from MSU as well as APICS members, will generate relevant, actionable insights that promise to advance the design and execution of supply chain operations going forward," said Sharon Rice, executive director of the APICS Foundation.

While researchers aim to change supply chain management for the future, another firm managed to illustrate a company's entire supply chain, according to Supply Chain Digest. LLamasoft recreated in a graphic that details expenses, distribution and network. Points show where its profitable customers are located and even maps out how long shipments take. The publication suggested it would be even more helpful to keep a frequently updated supply chain network to record changes.

"Of course, companies can drill down into many other areas of potential interest," Supply Chain Digest said. "But often a simple picture is a good place to start."

In case you missed it; the nation’s largest group purchasing organization (and Source One’s partner), Corporate United, launched its own blog, “CU achieve” earlier this year. In fact, it’s just passed its three month birthday, which a large majority of blogs fail to survive past. So congratulations to them!

The CU achieve blog has some potential to differentiate itself from the pack of other procurement and supply chain oriented blogs out there, because of the unique nature of Corporate United. They have access to over 200 procurement professionals in their membership, their own experienced staff, and the voices of dozens of awesome suppliers.

According to Corporate United, you can “Expect to read up on the most strategic elements of procurement and supply chain, such as ways to get your colleagues in departments like IT, marketing and HR to view you as a strategic partner, not as a penny pincher. And how to develop win-win relationships with your suppliers and encourage innovation.”

It sounds good to us, and they are off to a very strong start.
So make sure you check it out:

As technology advances in many areas of business, there are different avenues to consider when looking for ways to maximize production resulting in higher profitability.
Telecommuting has become more popular throughout organizations as it allows businesses to broaden their employee hiring capabilities on a global reach, reduce overhead costs, and encourage productivity among existing employees. Employees are more motivated when they feel their company is considerate of their everyday life outside of the office. For example, if a stay at home parent can work out of the house and not worry about full time day care costs, they will feel more inclined to work harder and possibly for a longer period of time. For recruitment purposes, businesses that have one office can consider hiring people all around the world and expand their customer base by having sales staff and production teams locally to their customers. Having employees in different time zones allows productivity to continue all throughout the day and night.  If there are not as many employees in a specific facility, companies can consider downsizing their working space, equipment needs, and other real estate related costs including but not limited to:
·         Utilities – there will not be as high of a demand on electricity, water, and gas
·         Infrastructure – wiring and cabling, phones and computers
·         Maintenance – a smaller building will require less man hours and materials for cleaning
Another perk to telecommuting is during disasters, employees can continue their work if they have everything they need accessible to their home or remote work space.
There are a few caveats to telecommuting that should be considered before implementing this type of policy:
·        Hiring the right type of employee: Although you cannot micromanage staff that is working off site (unless you have a nanny cam), you want to make sure you permit responsible and professional staff to work remotely.
·        Expenses: An employee working off site will need equipment to connect to corporate and communicate with the outside world. It is important to determine if these items are employee purchased and expensed or company provided, paid and maintained. Depending on how you choose to proceed, keep in mind security issues, policies, and liabilities. 
·        Compensation and Benefits: Is the employee hourly or salary? Who is liable if there is an accident at a remote site?  
·        Team Work: When employees work remotely it may be difficult to engage with other team members or have group meetings. One thing to consider is setting up social media links such as a corporate Facebook or other chat room type settings. This can create a virtual “water cooler” where employees can chat about their work or discuss projects with coworkers and feel like they are part of a team. 
The decision to allow for telecommuting should not be taken lightly. A formal policy should be developed expressing the rules and potential penalties for non-compliance. It might also be a good idea to have a trial group of employees to see how things go. However business looking for that edge to attract motivated employees, should consider it.

3-D printing changing how businesses reduce manufacturing costs

With the ability to quickly produce parts, innovative technology like 3-D printing is changing how businesses reduce manufacturing costs. Small business manufacturing is also benefiting from on demand production of inventory by making the right amount of what customers want.

3-D printing aids in the cost reduction of advanced manufacturing that the space industry is capable of, according to NASA recently tested out the biggest rocket engine part made by a 3-D printer - an injector, which helps to provide thrust for engines. The experiment was a success as the injector was able to generate 20,000 pounds of thrust - 10 times more than other injectors produced via 3-D printing. The engine part used in the test was similar to those used in rockets for the Space Launch System that is capable of sending humans on space missions to Mars and other objects near Earth.

"This entire effort helped us learn what it takes to build larger 3-D parts - from design, to manufacturing, to testing," said Greg Barnett, lead engineer. "This technology can be applied to any of SLS's engines, or to rocket components being built by private industry."

3-D printing allowed NASA manufacturers to develop a cost-efficient method of producing engine parts by streamlining the amount of components. Compared to previous manufactured versions of the injector, the updated engine part required only two parts rather than 115, cutting assembly costs.

"We took the design of an existing injector that we already tested and modified the design so the injector could be made with a 3-D printer," said Brad Bullard, propulsion engineer and designer of the injector.

With this successful test, there are other areas NASA hopes to reduce costs, including the possibility of printing food for space astronauts.

3-D manufacturing may cut costs related to distribution and inventory

At the same time 3-D printing is changing spaceflight and exploration, this manufacturing method is revolutionizing how retailers ship to consumers on the ground, the Washington Post reported. Inspired by the concept of same day shipping, small business manufacturers are utilizing 3-D printing to respond quickly to customer demand and produce exactly what they want. This could increase efficiency by removing the guesswork of having stock without knowing how much of it will be sold. By printing on demand, retailers can also reduce the costs of storing products by keeping inventory levels low.

In a whitepaper we originally released back in April, we discussed the role of education in Procurement departments -- how important was it to have an education and whether education or experience was valued more in modern Procurement departments. What we found was, for current personnel, experience is much more prevalent than education -- 76% reported more than 10 years in the field, while only 55% had a college or graduate degree. Interestingly enough, 30% of the VPs and C-levels that responded did not complete a 4-year degree. On the other side of that study, looking at the new folks coming into the industry -- those with less than three years experience -- all have completed some sort of post-high school degree program.

Those entering the industry are coming in much more educated, which we predict will enhance the strategic capabilities of Procurement and Supply Chain departments across the board. Further enhancing that strategic education is the advancement of specific Supply Chain curricula at schools nationwide. As we discussed in our most recent newsletter -- read it here, sign up here -- there are now more than two dozen schools across the country offering Supply Chain or Strategic Sourcing programs, and a career in Supply Chain Management is beginning to be seen as a lucrative one.

So, enticed by the promise of money, what skills will these graduates have upon graduation, should your company decide to hire one? Lehigh University, which offers an undergraduate SCM program, instructs its students on supply & inventory management, logistics, operations, and -- interestingly enough -- B2B marketing. Additionally, students gain enhanced cost analysis, negotiation, production development, and e-business skills. Should they pursue a Masters, advanced programs like the one offered at Penn State further develops leadership and problem-solving skills through a heightened focus on SCM, transportationand distribution issues, and strategic sourcing.

Take a look at your own department, and imagine what it will be like 10 years from now, full of kids who graduated with skills in these areas and grew up through  your company culture. Do you have the structure in place to take advantage of folks coming in with this type training?

If you appreciate this type discourse and topical discussions, take a moment to sign up for our monthly newsletter. Every month, our strategic sourcing experts take a look at a topic and break it out into digestible tidbits. 

Photo courtesy of

New technology transforming electricity sourcing

Much of the operating expenses for a business can stem from its energy costs, such gas for fleet vehicles or electricity to illuminate buildings and operate equipment. Electricity sourcing from energy storage technology is now a growing industry trend as businesses can reduce waste by producing their own power from renewable sources, including wind and solar.

Energy storage becoming a fast growing industry

Energy storage can help small and large entities alike depending on the scale of this technology, Sustainable Business reported. Large capacity energy storage like Japan's 60 MW battery bank can be used at utility substations while small-capacity batteries can continue to keep a business working during interruptions caused by severe weather or power outages.

A study by Navigant Research found that for the first six months of 2013, new projects in this growing industry have expanded to 38 while 633 are already functional or under development.

"There are now 29 different energy storage technologies in use worldwide, some with just a small fraction of the overall market," said Anissa Dehamna, senior research analyst at Navigant Research.  "In terms of regional capacity, Asia Pacific continues to be the world leader in deployed capacity, with almost 1.2 gigawatts (GW) representing 47 percent of global capacity, followed by North America and Western Europe.  In terms of installed projects, however, North America leads with 115 deployments."

These projects include creating new kinds of battery technology even one that involves solar thermal energy. Researchers are also working on modified versions of older technology including power-to-gas. The direction of energy storage development depends on the region. The storage market in North America is fueled by innovation while Asian economies work with the plan to export their products. Markets in Europe are creating storage technology that incorporate renewable energy.

Net metering programs encourage renewable energy use

After net metering programs sponsored by state governments have expanded to almost all of the country, residents and businesses have put more focus on renewable-powered energy sources, according to the Energy Information Administration. Net metering programs allow residents and businesses to receive retail prices from electric utilities if they generate their own energy using on-site generators in excess of what they actually consume.

Residents and businesses can set up small generators that use renewable energy such as rooftop solar systems to produce their own electricity. Forty three states and the District of Columbia currently have required net metering programs with an estimated 297,000 customers nationwide taking advantage of the program's financial incentive.

So there have been plenty of rumors about the new iPhone 5C that is set to launch in  September. The problem is, these rumors don’t say much about the 5C besides that it will be cheaper.  To reduce the iPhone fanatic’s anticipation and anxiety for the unknown, here is more information on what we think we know on the 5C!

Existence: According to AllThingsD, who have been correct in predicting Apple product releases and their drop dates in the past, the 5C will be revealed September 10.

Cost: Analysts at Morgan Stanley predicts that the phone will cost between $349 and $399, unsubsidized. The estimated cost is far less than the current iPhone 5’s unsubsidized cost, but the iPhone 5 is typically sold at a carrier-subsidized cost of $199 with a two year contract. The general belief among tech pundits is that the 5C will only be sold unsubsidized.

Aesthetics: It’s already understood that the 5C will be cheaper and, with that being said, the body would most likely be made of plastic to reduce the costs incurred by the current iPhone’s raw materials (aluminum) and machining. Morgan Stanley estimated that using plastic over aluminum will cut the cost in half, from $33 to $16. While the current iPhone comes in two colors, black or white, the 5C will likely recall the days of candy colored iMacs and iPod minis with a variety of colors available.

Features: To allow for the lower cost, it’s expected that the 5C will have a more limited feature set. There will likely be a lower screen resolution, smaller memory capacity, and a less refined camera, along with a lack of Siri or 4G data connectivity.

Power users should not fret, however, as Apple is expected to present an updated iPhone 5S during the same September 10th conference as it is expected to announce the iPhone 5C.
Manufacturers turn to sustainable sourcing to save on raw material costs

As crude oil prices increase, the raw material costs of plastic packaging is also rising. However, some packing producers are turning to sustainable sourcing to reduce costs and increase the recyclability of their bags.

With raw materials expenses making up more of plastic packaging costs, cosmetic companies are changing their packaging structures and design, according to Packaging Digest. Market researcher Organic Monitor found the cosmetic industry's green procurement efforts have stemmed from changing design elements. An example of this is Brazilian company Natura Brasil, which used flexible plastic packaging composed of 70 percent less plastic than stiff plastic containers for its skin care product line.

While brands are researching how to make their packaging more sustainable, plastic remains as the predominant material for packaging despite its rising materials costs and high environmental impact. Some producers are turning to plant-based plastics with some bioplastics even sourced from sugar cane.

Another industry is using bags that are 100 percent recyclable to increase the sustainability of their packaging. After listening to a customer's suggestion for premix packaging that is more recyclable, DSM Animal Nutrition & Health, according to Pork Network decided to source material from LDPE to reduce the amount of materials wasted in landfills. 

"Some alternatives to paper, like woven plastics, raised concerns about contamination and damage to equipment at the feed mills," said Marc de Beer, vice president of DSM Animal Nutrition & Health in the North American area. "The LDPE product is a single flat sheet that cleans out thoroughly when poured."

By using low-density linear polyethylene (LDPE), the bags are designed to be strong to withstand transport to warehouses and feedmills yet easy to handle. The packaging can also protect premix from exposure to air and sunlight to improve product quality while heat sealing helps prevent risk of contamination. 

Overall workplace fatalities down 7 percent

As part of the risk management process, companies are responsible for reducing the risk of bodily injury and other harmful effects to employee health. They can take steps to protect their workers' well-being through hands-on training and equipment safety checks as well as undergoing other risk assessment procedures. By accounting for all potential hazards that take place on the job, employers are able to curb the number of work-related injuries or deaths.

Overall workplace fatalities decreased 7 percent in 2012 compared to the previous year, according to The Wall Street Journal. Fatal injuries declined to 4,383 from the revised numbered of 4,693 in 2011. While employee deaths saw a decline, Labor Secretary Tom Perez called on companies to do more to protect their workers' safety, saying the increase in deaths in the construction and oil and gas sectors was unacceptable.

After declining for five straight years, construction deaths gained 5 percent in 2012, increasing to 775 from 738 in 2011, the Bureau of Labor Statistics said for the Census of Fatal Occupational Injuries.

Oil and gas industry workplace fatalities increase to 9-year high

The oil and gas industry had a huge increase in fatalities, rising 23 percent to 138 - its highest level since the data report for fatal injuries began in 2003, according to Environment and Energy publishing.

Employers must take job hazards seriously and live up to their legal and moral obligation to send their workers home safe every single day," Labor Secretary Thomas Perez said. "The Labor Department is committed to preventing these needless deaths, and we will continue to engage with employers to make sure that these fatality numbers go down further."

Perez said employers should try to maintain the safety of their workers every day. The Occupational Safety and Health Administration is taking steps toward curbing falls in construction through educating workers as well as starting partnering up with onshore oil and gas production companies for a day of safety training and onsite inspection.

Broken down by region, 32 states reported decreases in workplace fatalities compared to 2011, sixteen states and the District of Columbia said they had higher occurrences of onsite fatal injuries while two states stated their numbers remained the same.

The industry's fast pace in growth and production could be the reason for the 23 percent increase in workplace fatalities, spokeswoman for the Independent Petroleum Association of America Julia Bell said.

"When industries expand rapidly, there are, tragically, incidents that also occur," Bell said.

Russia has reportedly been offered a gas deal in exchange for its support for attacks on the Assad regime in Syria

Conflict tends to cultivate oil concerns, from the fuel rations of the World Wars to the spike in gas prices that seemingly accompany every dispute in the Middle East. Remember those lovely $1.25/gallon prices prior to the Iraq War? As the issues in Syria intensify and military action is all but guaranteed, oil prices are pushing past $112/barrel. But there is another aspect to the current situation that could stand to greatly affect the oil markets.

In transcripts apparently leaked and reported by The Telegraph, secret negotiations between Saudi Arabia and Russia have occurred looking to sway support for strikes on Syria in exchange for global control of the oil markets. How's that work, you ask? Here's a rundown.

Russia has backed the Assad regime in Syria since the Syrian uprising, and in grander terms, the Arab Spring began. This is for a couple of reasons -- Syria under Assad upgraded its military with Russian product, Russia maintains a Naval base there, they have numerous long-term oil contracts signed with Assad, and they fear further inciting the spread of radical Islam. For these reasons, Russia has been the Assad regime's strongest supporter and has vehemently opposed interference in the uprising, going so far as to label the Syrian rebels as Al Qaeda agents.

Now there are rumblings of military action circulating based on the rumors that the Iraqi Syrian establishment has attempted to buy yellow cake gassed its own citizens. In order to garner Russian support, or at least acquiescence, the head of Saudi Arabian intelligence reportedly met with Russian President Vladmir Putin offering assurances that Russian interests in Syria would not be harmed and an alliance with OPEC. This alliance would presumably further Putin's calls for a global gas cartel, which he presented in his Moscow Declaration.

The oil market is volatile enough without Middle Eastern conflict. Given conflict, and a new golbal oil cartel, and oil, gas, and derivative prices could all rise in the coming months.

Hold on to your hats.
How small business manufacturing reduces costs

When small business manufacturing companies must work with limited resources, shipping and distribution costs can expensive. However, one company has devised a way to reduce manufacturing costs by having open source furniture designs.

In the effort to keep manufacturing local, OpenDesk in the United Kingdom allows designers and makers to download designs of furniture from its online community, according to Gizmag. Makers can assemble furniture parts that are cut from wood using a CNC machine. The founders of OpenDesk wanted to fabricators globally to try out designs, saying they wanted to create a network for furniture makers.

"We chose to go open source initially because we wanted to get positive feedback from people on what they thought of designs and ensure they could fabricate for their own personal use if they had access to a CNC mill," said Nick Ierodiaconou, OpenDesk director and lead designer, to Gizmag.

Businesses have the choice of working with raw materials themselves or buying parts that are ready for assembly to be made into desks, tables, stools and more.

While designs are free to download, OpenDesk also functions as a freemium model, where consumers can have furniture made after agreeing to a fee, which helps increase business for local manufacturers. Buyers can choose the option of "Get It Made" for furniture pieces and tell the site where to deliver the finished product.

SBA awards $55 million in small business loans in 2013

To purchase raw materials such as wood, small business manufacturers often turn to loans. To help pay for expenses that are crucial for production, the Small Business Administration offers various loan programs to qualified businesses. The SBA will have given out at least 129 loans worth $54,983,700 before the end of the fiscal year with each loan averaging out to $426,000, The Cleveland Plain Dealer reported. Businesses that benefited from these loans include manufacturers in Ohio such as Advanced Manufacturing, which bought a gearbox after receiving a $2 million SBA loan in 2011.

Local SBA District Director Gil Goldberg said the region may receive the same amount of loans this year compared to 2012. The numbers for 2013 are slightly below last year's fiscal period of 150 loans totaling $65,854,200 with an average of nearly $439,000 per loan. This is more than double the total given out during the start of the recession in 2009, the local SBA office for northern Ohio gave out 89 manufacturing loans that totaled $26,490,400.

"I think that tells us that manufacturing is still growing," Goldberg said.

Green building modeling aids LEED procurement and certification

As green buildings represent more of all U.S. construction, demand for sustainable sourcing tools will increase. When undergoing green building design, LEED procurement efforts are aided by modeling technology. This advanced technology known as building information modeling (BIM) allows companies to project their potential environmental impact based on virtual scenarios, according to GreenBiz.

As a user of BIM for over 10 years, international construction firm Skanska has dedicated its business to both sustainable construction and design. They were an integral in designing Logan International Airport in Boston, the world's first airport certified under the U.S. Green Building Council (USGBC)'s guidelines. Using BIM for all of its projects for residential and commercial projects, Skanska develops 3D models that allow design teams to evaluate energy usage for a building without any physical construction beforehand.

"If we are able to fix the design in a virtual environment -- eliminating errors, checking schedules, materials -- then we are better able to complete the production without errors," said Tiina Koppinen, director of business development at Skanska.

The company was able to model its own headquarters called Skanska House to reduce energy consumption and incorporate rainwater harvesting.

"We are able to analyze more alternatives, which certainly results in being able to make more informed decisions," Koppinen said.

It also used modeling technology to conclude that ground source heat pumps were the best option to reduce environmental impact for its Harmalanranta residential development.

Green building modeling expands with growing industry

A report by McGraw-Hill Construction said the popularity of BIM was increasing in North America, with usage more than quadrupling from 17 percent in 2007 to 71 percent in 2012.

"Over the next 10 years, building owners will demand ever-increasing usage of BIM as a precondition, ushering in a new era of accuracy, quality and sophistication for the building industry," said Patrick MacLeamy, CEO of design firm HOK, commenting on McGraw-Hill Construction's research.

This upward trend of BIM could be due to green building construction expanding at a rapid pace, Clean Technica reports. Green buildings are expected to represent 55 percent of commercial and institutional construction in the U.S. by 2016 at the earliest - an increase of 11 percent compared to 2012.

As LEED procurement for building certification grows, the economic activity associated with green buildings has the potential to reach $248 billion in profits and provide for 35 percent of all U.S.-based construction jobs.

"LEED is a transformative force that works at the intersection of a variety of societal and economic interests, including the construction, real estate and environmental communities," said Rick Fedrizzi, president of USGBC.

Researchers turn to sustainable product sourcing for green plastics

Sustainable product sourcing results in innovations that lead to more efficient alternatives to common goods and materials. A grant by the Environmental Protection Agency is helping small-business manufacturing in development of a new kind of plastic that may reduce impact on the environment.

The EPA gave GVD Corporation $300,000 towards research for a more sustainable form of plastic, the Cambridge Chronicle reported. Specializing in coating services for a variety of industries, GVD was one of 25 companies that were initially granted $80,000 by the EPA's Small Business Innovation Research program. Along with seven other companies, it went on to receive its most recent grant during Phase II to help prepare its mold release coatings for commercial sale. These mold release agents can be used for foam, tires, automotive parts and medical products.

"We at GVD are very conscious of the environmental impact attributed to conventional mold release technologies," the GVD press release said. "Most commercial mold release agents make use of organic solvents that vaporize during drying, creating a significant air quality impact."

Using green technology,  GVD Chief Technology Officer Shannan O'Shaughnessy said the company uses a process that forms plastic on the surface itself, which uses less energy compared to the processes that include wet applied release agents.

"We have a novel way of making Teflon-like coatings that doesn't require use of environmentally unfriendly materials," O'Shaughnessy said.

Researchers turn fats, oils into plastic materials

In another step towards sustainability for the industry, two researchers are studying how to turn animal fat and vegetable oil into plastic, according to Plastics News. Before this research, raw materials for plastics were usually sourced from petroleum feedstocks.

"The increased demand for sustainable development, together with the ever fluctuating cost of petroleum-based raw materials, makes the development of new processes that provide more economical and greener alternatives to conventional methods in forming base feedstocks for commercial polymers imperative," the study's introduction stated.

Using fats and oils , Maria Muro-Small and Douglas Neckers discovered a method to irradiate these raw material that allows them to be transformed into glycerol byproducts that will eventually be converted into plastic. They tested different samples including olive oil, canola oil and used cooking oil from deep fryers.

Their findings were published in Sustainable Chemistry and Engineering by the American Chemical Society. Neckers said experiments such as these are crucial because raw materials for plastics are in short supply while costs for petroleum-based feedstocks continue to climb.

Midwest manufacturing sees boost in hiring

The current market analysis shows that hiring activity in the manufacturing industry of the Midwest is picking up, according to The Business Journal. Domestic manufacturing professionals across the upper Midwest were showing signs that they were optimistic in their outlook about the state of the economy.

In a survey by tax and consulting services firm McGladrey Wisconsin of 1,067 industry executives, the report showed manufacturers and distributors in Wisconsin believed that they will see growth in sales and more job activity in the next 12 months.

In regard to job hiring, 77 percent responded that they were optimis​tic about company expansion in the next year and 71 percent intended to add to their workforce. Job prospects in manufacturing are projected to imrpove as 83 percent expect U.S. sales to increase, with 63 percent planning to hire more employees to keep up with this new demand.

"The results from this year's (report) make clear that manufacturers and distributors in Wisconsin are feeling better than last year about the things they can control, but they remain concerned about what is going on outside of the walls of their factories and offices," said Karen Kurek, national manufacturing and distribution practice leader for McGladrey.

States report thousands of new jobs in manufacturing employment gains 

Chad Moutray, chief economist of the National Association of Manufacturers, highlighted a surprising statistic of which state received the most job gains in July. Despite recent headlines of Detroit going bankrupt, the Bureau of Labor Statistics regional and state employment numbers report shows Michigan came out ahead as the state with the most net new manufacturing jobs, increasing with 7,600 workers. Motor vehicles added 9,100 new employees nationally July, which could account for the large jump in hiring for Michigan. Another Midwest state, Ohio, saw an increase in employment with 2,400 more workers while the states with the most manufacturing job gains in July include were mostly in other parts of the country with Virginia (+3,300), California (+2,600) and Georgia (+2,200).

Meanwhile, manufacturers could face higher interest costs, which could result in more operating expenses However, an increase in borrowing costs is considered healthy for the nation's economy, according to Bloomberg.

"Confidence is at the center of everything here," said James Paulsen, chief investment strategist at Wells Capital Management in Minnesota. "If I had to pick one overriding thing, it's confidence that's been running through the financial markets and the economy this year."

Video games are in the news a lot lately, what with the impending release of Grand Theft Auto V and consoles like the PS4 and the XBox One. Video games and strategic sourcing, however, have nothing in common -- so why am I talking about them? Both became popular around the same time (late '80s/early '90s). So, because it's Friday, here are how five classic video games from the '80s and '90s could have been made better by incorporating elements or best practices of strategic sourcing and procurement activities.

5. Pac-Man

Pac-Man's supply chain for Power Pellets (that's what the big ones were called) is poorly optimized. First of all, he's getting the same product from four suppliers/corners, each of which lie beyond a maze of logistical issues. Secondly, the Power Pellet supply line is riddled with risk/ghosts. Equipped with a completely optimized supply chain, Pac-Man could eliminate risk and have more direct access to the necessary Power Pellets.

4. Legend of Zelda

Look at this map of Hyrule for a second. There are lakes, rivers, waterfalls, and streams across the world, and yet Link could only find one boat, and it was hidden in a dungeon surrounded by the undead, bats, and fat ogres carrying boomerangs for some reason. Imagine how much easier it would have been if he could have looked for alternate vendors: "Oh, Supplier A's boat costs 4 hours of dungeon-wandering. But Supplier B's is $37.50, dungeon-free."

3. Tetris

Tell me having a stronger supplier relationship with the guy making the long pieces vs. the T-shaped & zig-zag pieces wouldn't have made this game way better!!

2. Civilization II

In a game developed to simulate global settlement and relations, you would think that global sourcing and international trade would be easy. Or at least possible. Instead, Civilization II provided multiple chances to have your cities leveled by cruise missiles for attempting to access a rival government's resources. Practically everything in this game would have been better if an expert on global sourcing had been installed instead of, say, soldiers on skis in the sub-Saharan.

1. Super Mario Brothers

Two words: Project Management. Seriously, Mario needed stronger oversight than you as a player could provide. The whole game was his trip to get one thing -- one thing -- from a castle. What should have been a five minute trip instead turned into him going to the wrong place and getting the wrong thing seven times, before finally getting it right on the eighth. If you did that, how quickly would it come up in a quarterly review?!

So there you have it. That's the top five classic games that could have been improved by a strategic sourcing technique. What other games could stand improvement from an industry practice? 

Is there something done in your department that could make the landing possible in Top Gun? Could you identify alternate bidders that offer larger paddles for Pong? Discuss below.

Domestic manufacturing growth a major factor in US trade deficit reduction

Despite the growing global competition, the U.S. trade deficit of manufactured goods decreased during the first half of 2013, showing domestic manufacturing could be on the mend, according to The Wall Street Journal. While offshore manufacturing powerhouses like China and South Korea have contributed to the U.S deficit in the past, signs of rising exports and "reshoring" production are instilling hope in the industry, Boston Consulting Group suggested.

The manufactured goods trade deficit declined by $2 billion in the first half of the year to $225 billion compared to $227 billion in 2012, data from the Manufacturers Alliance for Productivity and Innovation indicated.

"This is a fundamental economic shift," said Harold Sirkin, a senior partner at BCG, to the WSJ. "The trends are going faster than we thought. As much as people say we don't make anything anymore, it's just not true."

BCG predicts that manufacturing will experience a spike in exports due to energy costs decreasing and labor costs remaining relatively the same. Innovative fracking technologies have allowed for a surge in domestic oil and gas production that contributed to the decline in the overall trade deficit.

How the U.S. trade deficit decreased globally

Imports of oil resources decreased to their lowest figures in more than two years, according The Associated Press. With the potential for more jobs to return to home soil, the unemployment could decrease from its current rate of 7.4 percent to BCG's projected rate of 5.4 percent or even 4.4 percent.

In June, the trade deficit decreased to its lowest level since October 2009, The AP reported. Imports shrank 2.5 percent to $225.4 billion while exports increased. With U.S. manufacturers increasing shipments of aircraft parts, telecommunications equipment and heavy machinery, exports grew to $191.2 billion in June - an increase of 2.2 percent.

"A smaller trade deficit lifts growth because it means consumers and businesses are spending less on foreign goods than companies are taking in from overseas sales," The AP report said. "The steep decline in the June deficit could lead the government to revise its growth estimate for the April-June quarter a little higher."

Exports to the European Union contributed to the decline of the deficit with the region to $7.1 billion while deficit with China decreased 4.3 percent to $26.6 billion. For trade with the rest of North America, the biggest drop in the deficit was with Canada with a decrease of 13.7 percent to $1.6 billion while Mexico declined 9.6 percent to $4.8 percent.

As part of our ongoing efforts to educate business leaders and students on the value of strategic sourcing, Source One Management Services, LLC has launched a YouTube channel  hosting short informational presentations that address key issues for sourcing, procurement, and supply chain and enlighten those industry professionals to the emerging trends.  

In the hosted videos, available at, Source One strategic sourcing analysts review those concepts critical to modern strategic sourcing and supply chain, such as supplier relationship management and nearshoring, and explain how businesses can benefit from them the implementation of those strategies. Providing an instructional approach to strategic sourcing, procurement, and supply chain concepts comes naturally to Source One, as we regularly participates in educational panels concerning the industry at schools ranging from North Carolina State University to Universidad La Salle in Mexico City.

“The team we have here at Source One comes from a diverse range of backgrounds, and they work hard to develop creative solutions to our clients’ complex problems. We hope that this series will open peoples’ eyes to the benefits of strategic sourcing and how it can help them to improve their own organizations,” said Source One Chief Executive Officer Steven Belli. 

A selection of the videos are available in Spanish and are provided as a continuation of Source One’s ambassadorial role for the strategic sourcing industry in Latin America, which we undertook as one of the first to bring strategic sourcing to the region. Future videos, released bi-weekly, will include a full accounting of a successful nearshoring project and its benefits realized by U.S.-based manufacturers, plus additional strategic sourcing concepts. 

“Source One remains committed to educating the current and future generations of sourcing professionals and business leaders,” states Vice President of Operations William Dorn. “The offerings of this video channel are a natural extension of this dedication to education.”

Source One consultants are also regular speakers at Institute for Supply Management events, lead a webinar series at, and contribute editorial content to ThomasNet’s IMT Procurement Journal, Buyers Meeting Point, and their own industry-leading blog at Source One’s consultants have also been the recipients of numerous awards from analysts including Gartner and publications like Supply and Demand Chain Executive, Philadelphia Business Journal, and ThomasNet.

Nanosensor technology helping improve strategic sourcing for safer drugs

New research on nanoscale sensors could help pharmaceutical companies improve strategic sourcing for safer drugs, according to the Massachusetts Institute of Technology. This potential change in drug procurement could prove especially useful to medicines related to antibodies.

Using nanosensors in their research, MIT chemical engineers observed that they could determine how strong antibody drugs bonded to their target. In manufacturing drugs, engineered cells often do not bind batches of antibodies evenly, making them less powerful in treating patients. However, the sensor from MIT could allow drug companies to shed expensive testing processes needed to evaluate drugs and rule whether they fulfill requirements that make them fit for consumption.

"You could use the technology to reject batches, but ideally you'd want to use it in your upstream process development to better define culture conditions, so then you wouldn't produce spurious lots," MIT graduate student Nigel Reuel said.

Researchers use nanosensors to improve drug effectiveness

In addition to discovering the strength of antibodies, researchers also studied the structure of their molecules to know whether chains of sugar could slow down drug effectiveness. Antibodies may trigger an autoimmune response that could result in their destruction, making drugs used to treat autoimmune diseases like Crohn's Disease less potent.

"This has been a problem for pharmaceutical companies and researchers alike, trying to measure glycosylated proteins by recognizing the carbohydrate chain," said Michael Strano, an MIT professor of chemical engineering. "What a nanosensor array can do is greatly expand the number of opportunities to detect rare binding events. You can measure what you would otherwise not be able to quantify with a single, larger sensor with the same sensitivity."

With researchers helping to determine conditions needed for even bonding of antibodies to their targets, drug companies could be able to produce more powerful drugs that work consistently in the future. By accurately determining the strength at which antibody drugs can bind to other substances, this could mean the possibility of advancement for medicines that could treat cancer as well as other diseases.

Portable nanosensor technology can quickly identify radiation exposure

At a different lab, researchers are using the same technology employing nanosensors to quicken medical diagnoses of overexposure to radiation, UPI reported. Scientists at the Lawrence Berkeley National Laboratory in Berkeley, Calif., are in the process of developing a biochip that can tell whether someone has been exposed to lethal levels of ionizing radiation in minutes. While radiation occurs naturally in sunlight, individuals can also encounter it during X-ray examinations or cancer treatment or if they work in a nuclear power plant. Symptoms of radiation sickness can be as benign as nausea or as severe as burns to the skin and reduced organ function.

An array of nanosensors contained inside a chip allows users to determine the amount of proteins in blood exposed to radiation. If someone has too much radiation exposure, a handheld device will light up, indicating that medical attention is needed. Since these gadgets are handheld, doctors could use them during regular office visits or carry wherever patients require testing. In the event of a radiation emergency, this new technology can quickly distinguish individuals who quickly need treatment from a large crowd.

Using mice in their research, scientists dispensed only a drop of blood to measure the radiation dose in a few minutes.

"More work is needed, but the chip could lead to a much-needed way to quickly triage people after possible radiation exposure," said Andy Wyrobek of Berkeley Lab's Life Sciences Division. "The goal is to give medical personnel a way to identify people who require immediate care."

Raw materials costs made slight gains despite PPI changing little in July

Raw material costs slightly increased while intermediate and finished products remained relatively the same, according to the Bureau of Labor Statistics. Manufacturing costs for U.S. trade industries saw little change in July compared to the previous month. The Producer Price Index for net output reveals that core wholesale prices increased 0.1 percent in July, a change of 2.1 percent from 2012. Economists had projected that the figure would be marginally higher at 0.2 percent,Bloomberg reported.

After the Producer Price Index for June showed a 0.5 percent decrease, prices were flat in July for finished, intermediate and crude goods, supplies and components.

Prices of finished goods combining food and energy were boosted by prices in the pharmaceutical industry, which increased 1 percent. Finished energy data reports that prices were slightly down 0.2 percent in July after residential natural gas prices decreased.

"Inflation should gradually pick up, but it's still going to be relatively low," Chief Economist for Raymond James & Associates Scott Brown said. "There's still a lot of slack in the economy."

The biggest change in the PPI was for energy prices for crude goods, which surged 4 percent from June, a 9.3 percent increase compared year-to-year.

Raw materials costs, including for crude oil, increased 1.2 percent in July. While core crude materials decreased 0.3 percent, raw energy prices increased significantly. The crude core prices declined due to decreases in nonferrous metal and corn costs. Leading the jump in prices were crude petroleum prices which rose 10.6-percent from the previous month. Coal also experienced higher prices, which added to the bump from June.

"Until real demand returns and unless consumption increases, lower input cost will continue to impede pricing power," David Wolfort, president and chief operating officer, said to Bloomberg in a call on Aug. 9.

Suppliers tracking timber procurement with DNA testing

DNA testing is modernizing the procurement and tracking of imported timber, according to The Guardian. Timber wholesalers have started using a new technology that allows them to authenticate their wood supply sourced from sustainable forests and maintain operational excellence. In confirming the origin of wood bought from suppliers, this system of testing compares wood fibers and tree genetic code. Sydney-based Simmonds Lumber was the first company to use this technology created by Double Hexlix and Certisource. Simmonds Lumber benefited from using the Double Helix DNA tracking system to provide supplier imports tropical hardwood merbau from Indonesia were authentic.

"The trickiest thing about importing from Indonesia is ensuring that the paperwork is correct and not, as we say in Australia, bodged up," said John Simon, chief executive at Simmonds Lumber.

Through DNA identification, buyers will can accurately verify whether a shipment of wood is real. Valuable timber like merbau, found only in New Guinea, is worth the $2,500 a cubic meter on the market and is used for building homes and furniture.

"Factories that sell certified products also sell uncertified products alongside," said Jonathan Geach, executive director of Double Helix. "Now it doesn't take much imagination to see that they may be mixing and through that laundering."

A verification tracking system, can act as a "digital passport" for suppliers and buyers, Helveta chief executive Karim Peer said. Helveta, based in the United Kingdom, provides tools and technology for timber and asset management.

Verification technology protecting suppliers, local communities

Since the forestry organizations such as Forest Stewardship Council or the Program for the Endorsement of Forest Certification do not actually practice verification of timber shipments, wholesalers must do it themselves.

After laws passed to curb illegal sourcing of timber, having DNA tracking available could mean avoiding fees and penalties.

"The impetus for organizations in Europe and the U.S. is that under the legislation, there are penalties that will be imposed if they don't comply," Peer said.

Illegal sourcing costs over $15 billion annually in lost assets and revenue for developing countries, the World Bank states.

In a case study provided by Helveta on its website, local communities in Cameroon gathered data on their observations of illegal logging. This included recording bulldozer tracks and felled trees found beyond legal commercial logging boundaries. The data collected was uploaded to the Helveta database and could be accessed using a Web browser and Google Earth to view data points on maps. The technology helped Cameroonian communities protect their lands while improving forest monitoring.

Auto manufacturers, governments invest in green logistics

Car manufacturers are reducing their environmental footprint in their effort to reduce waste and improve green logistics. Illustrating procurement's role in sustainability efforts, Volkswagen aims to reduce 25 percent of its factory energy usage and carbon dioxide emissions by 2018 through manufacturing and operating efficiency, according to WardsAuto. VW found three of its manufacturing facilities consumed 55.4 percent of energy, with 19.8 percent of it using electricity.

In reducing water and energy usage, VW's assembly plant in Chattanooga, Tenn., performs sustainable practices such as recycling rainwater for equipment cooling and restricting outside lighting to necessary areas.

Improving distribution for green logistics

Other car manufacturers like Kia have committed to green procurement, Hybrid Cars reported. By agreeing to sign a pledge with South Korea that it will provide for energy management for its supply chain, Kia will encourage its suppliers to produce using more environmentally friendly methods.

Kia intends to decrease production costs by unifying its distribution supply chain through have cargo transporters that hold a larger capacity of shipments and shrink the miles between its factories and ports. As for limiting its amount of waste, the South Korea-based car company said 90 percent of its factory waste is recyclable.

UK government funding development of low carbon emission vehicles

As for other government initiatives for cleaner auto manufacturing, the United Kingdom said it will fund £1 billion towards research and development of new vehicles that emit less carbon dioxide via its Advanced Propulsion Centre. The investment brings together auto companies in creating at least 30,000 jobs in the industry.

"With the next generation of vehicles set to be powered by radically different technologies, we need to maintain this momentum and act now," Business Secretary Vince Cable said. "Our industrial strategy will ensure we keep on working to make our automotive industry a world leader."

New weather modeling technology could optimize electricity sourcing

IBM developed new power and weather modeling technology to advance electricity sourcing, according to Manufacturing Digital. As a way to promote green procurement and renewable energy resources, IBM named this technology Hybrid Renewable Energy Forecasting (HyRef).

HyRef synthesizes weather modeling functions to predict the weather and data analytics to forecast the amount of resources like wind power and solar energy. Turbine sensors that detect weather factors including wind speed, temperature and direction to help model the availability of wind power. With its enhanced ability to monitor the weather, this system could encourage power utility companies to incorporate sustainable energy sourcing into their existing power grids. The hope of this new system is to reach the goal of expanding renewable energy power to 25 percent of operating systems, according to Dennis McGinn, CEO of the American Council On Renewable Energy in Solar Industry Magazine.

"The weather modeling and forecasting data generated from HyRef will significantly improve this process and in turn, put us one step closer to maximizing the full potential of renewable resources," McGinn said.

HyRef is able to predict the capacity of energy resources through cloud imaging technology and cameras that track cloud movements.The technology also uses data analytics to generate weather forecasts for local wind farms one month in advance or in real-time in the span of 15-minute increments.

"Applying analytics and harnessing big data will allow utilities to tackle the intermittent nature of renewable energy and forecast power production from solar and wind, in a way that has never been done before," said Brad Gammons, general manager for global energy and utilities at IBM. "We have developed an intelligent system that combines weather and power forecasting to increase system availability and optimize power grid performance."

Utilities and other energy organizations might also be able to integrate other sources such as coal and gas.

It’s been almost two years since I last blogged about bitcoins, a revolutionary new currency that has now become subject of scrutiny and controversy. I still find this concept fascinating and I think that now is a good time to discuss where the most popular digital currency is today.

Bitcoins are generated through the process of “mining” and can be used as traditional currency online to acquire all types of products, including goods, services and even other currencies, but unlike conventional money, they are not subject to fees and merchant costs. Anonymity, low cost and decentralization make Bitcoins extremely attractive for creative businesses and other louche entities that may not be too fond of taxes and regulations.

Let me start up by stating that when I first stumbled upon bitcoins, the dollar-to-bitcoin exchange rate was about $9. Today, each bitcoin is worth about $104, and that’s a low point compared to their maximum traded value of over $230 earlier this year. But the Bitcoin value is not the only thing that has dramatically changed. During the last weeks alone, the Bitcoin has suffered two major events: 1) Bitcoins have been recognized as a “unit of account” in Germany and therefore subject to taxation; and, 2) Federal authorities have subpoenaed businesses using Bitcoins claiming they are vehicles for criminal activity.

Here you have it. Two of the most powerful economies in the world, taking opposite approaches to the regulation of the same thing. Just the same as you will find articles all over the web claiming that ‘Bitcoins are real as they can be”, while others claim that “Bitcoins will never become a global currency”. The reality is that progress is the result of what a society believes in, and for a digital currency to revolutionize major capital markets one way or another, Bitcoins should be taken seriously.

So let me talk a bit about what this Bitcoin “recognition” means in Germany. First of all, the “unit of account” statement represents an acknowledgement of legitimacy from Germany’s Federal Ministry of Finance as a virtual currency and as a financial instrument. In other words, realized gains on Bitcoin value are treated the same way as gains on private stock or mutual funds would be, and are therefore subject to a capital gains type of tax. Bitcoins can also be seen as legal means of exchange (or private money) and have been adopted with fervor in local communities.

On the other hand, while Germany is sorting out the concept of a “new virtual currency”; in the US, there’s no mechanism to ensure that Bitcoin users and investors profiting from the digital currency report the income to the IRS. As such, Bitcoin is becoming the ultimate “tax haven”, with the difference that well known tax heavens normally depend on real financial intermediaries (aka banks), while Bitcoins do not. Rather than regulate the currency, or legitimize it, as Germany is doing, the U.S. policy (one has not been made official) appears to be one of illegitimzing the virtual currency by associating it with, and cracking down upon, its illegal uses.

For Bitcoins, legality is a double-edged sword. On one side, regulation will lead to trust, less volatility, price stabilization, and reliance which would increase the size of market, currently estimated at about $2 billion. On the other side, regulation and taxation will lead to higher costs of bitcoin transactions and will cause it to behave more like other accepted currencies. As bitcoins lose the differentiators that make them attractive today as mean of exchange, they will also lose some of their value.
The importance of regulation compliance in risk management process

While natural disasters and political upheaval could pose huge risks to a company, the risk management process is much more than guarding against these threats. In their risk assessment procedures, companies should also account for complying with all regulatory requirements, according to Industry Week.

Gerry Fay, chief global logistics and operations officer at Avnet, said the greatest risk companies face is an ineffective risk management strategy. This can include inadequate training of employees in following regulatory compliance of laws such as the Consumer Protection Act. Failure to follow these rules could lead to large fines, loss of business or damaged company reputation. Fay cited a survey by Deloitte that revealed 45 percent of respondents in the financial services industry said their risk management programs were "only somewhat effective" or "not effective at all."

The financial integrity of a business depends on its ability to reduce the chance of risk with an enterprise risk management (ERM) program.

How to avoid ERM pitfalls

For an ERM program to be successful, executives and boards need to have a clear understanding of how to confirm and monitor the risk assessment results, according to Smart Business.

"In many cases, ERM has consisted of creating a list of risks, prioritizing those risks and developing loose plans to mitigate them. The problem is that managers and executives often observe that the risks 'identified' had been known and adequately addressed," said Marc I. Dominus, ERM solutions leader at public accounting and consulting firm Crowe Horwath.

Executives and managers need to define the risks and update the criteria for assessing them on an ongoing basis. Firms should create and oversee risk management procedures and develop a treatment plan to avert or mitigate the risk. Companies should also be able to know how they should report the risks involved and who should receive information in assessing the risk.

We've talked recently about the 3D printing revolution and the problems around it. Rather than go back and read two articles, here's the summary: 3D printing offers a lot of gains when it comes to localized manufacturing, custom manufacturing, and product longevity, but the technology isn't mainstream yet and there are a lot of  quirks that need sorting before it enters the mainstream.

As part of a larger solution, however, 3D printing is already part of a technology surge that is having an effect on the global manufacturing industry and will soon have an effect on every organization's supply chain. The assembly lines that churned out a massive quantity of goods, in the cheapest way possible, then distributed them globally from a central location are being threatened by a new solution. Smaller production methods -- facilitated by new designs that ease assembly and are capable of being produced simply from a selection of cheaper, more localized machinery -- in aggregate, can produce the same quantity of goods as these assembly lines while offering more custom or more unique products, reducing the resources and overhead needed for production, and reduce the landed costs by being produced locally.

Three-dimensional printing is one example of this. Another example making the news recently are services like, which offer modern wood furniture designs, for free, in formats that are able to be fed into CNC machines and cut out on standard sheets of plywood or printed out as cutting & assembly guides. As a bonus, all the furniture designs are flat-pack. The idea is firmly in the "novel" category right now, but stands to make an impact. Imagine one day, instead of buying your company's pallets from a supplier and paying for their transport and the supplier's margin, you have the ability to print and assemble them on site. Or instead of heading off to comb a gigantic warehouse store for coffee and side tables armed with a catalog and cash, you instead head to a small wood shop, where you go to the proper webpage, feed in a sheet of wood, and press a button.

While I personally love any type of furniture shopping that includes meatballs, printing a custom bookshelf and the knick-knacks for it sounds pretty cool to me.

As fuel costs get higher and higher, the incentive for localized production methods increases. As technology advances, the ease of developing these localized methods grows. Take a look around your desk, and around  your facilities at all the manufactured goods you currently order. From pipe fitting gaskets to the door of your office, all of these will soon be able to be affordably manufactured locally or on site.
Honda, Chrysler expand Midwest production

Chrysler Group and Honda recently announced expansions of their production in separate Midwest states, according to Industry Week. With procurement of new factory operations Chrysler and Honda, these automobile manufacturers will invest over $260 million into American manufacturing.

Honda developing technology and worker skills in Ohio

Honda stated it was investing $215 million in its existing engine plant and new technical training centers located in Ohio, bringing its North American investment in the previous three years to almost $2.7 billion.

"Even as we introduce more sophisticated technologies in our products and in our plants, we are working to ensure that our associates are equipped with the skills required for the manufacturing requirements of the future," said Rick Schostek, senior vice president of Honda North America.

The new funds will go toward aluminum die casting and engine parts production for Honda Earth Dreams Technology and developing skills for engineers and equipment technicians. The company will also construct a new 160,000-square-foot building that will serve as a training facility and heritage center.

Chrysler increasing Tigershark engine production in Michigan

Meanwhile, Chrysler said it was providing $52 million to develop its Tigershark engine in plants located in Michigan in a separate Industry Week article. An $11.5 million investment for its Trenton-based plant will produce almost 300 new jobs and gain a Tigershark assembly line. The rest will go toward the factory in Dundee to improve engine production with new machine cranks, heads and blocks.

"With the growing demand for our products, we are constantly evaluating how to best meet powertrain production requirements," said Brian Harlow, head of Powertrain Manufacturing. "In this case, we are fortunate that we had an existing facility that could accommodate the additional capacity needs for Tigershark and one that has the know-how to support that additional production."

Sales increase for fourth straight month, positive news for merchant accounts

Sales increased in July for the fourth straight month, indicating that retail sourcing could be picking up as the nation's financial health strengthens, according to The Associated Press. The positive report could mean more business for merchant accounts as consumers are more confident with the state of the economy.

Sales edged up 0.2 percent in July from the previous month, following a rise of 0.6 percent in June from May, the Commerce Department reported. Auto sales played a large part in these gains, with sales increasing 2.9 percent in June and then experiencing a 1 percent decrease in July. Core retail sales that exclude volatile categories saw a boost of 0.5 percent in July, the largest increase since December 2012. Volatile categories include gas and building supply. Core sales increased 0.1 percent in May, followed by another 0.2 percent increase in June.

After the report showed retail sales saw a surge for the fourth month in a row, the dollar gained in value, according to Bloomberg. Retail sales indicate consumer spending, which makes up 70 percent of gross domestic product. As the dollar strengthens, financial experts will look to the Federal Reserve to see whether it decides to slow down the economic stimulus of the economy by reducing its bond purchases.

"Retail sales in the U.S., including revisions, were better than expected -- just on the daily charts, momentum seems to be turning," said Richard Franulovich, a senior currency strategist at Westpac Banking.

In a survey of 81 economists, Bloomberg predicted a 0.3 percent advance.

"The numbers are on the positive side, which is something that will help support the dollar and tapering expectations" by the Fed, Eric Viloria, senior currency strategist at Gain Capital Group, said to Bloomberg.