Based on current trends, it appears that way; however, in no way will the U.S. textile and apparel industries demand the large workforce that once existed well into the 1990s before jobs began to move overseas. In a two-part series, The New York Times features a few companies and their successes as well as challenges during this industry shift. Overall, companies are shifting production from China back to America simply because customers are requesting American-made goods. This growing demand for domestic products has resulted in an increased need for specialized jobs within the U.S. In turn, manufacturers in the city of Minneapolis, as well as several other cities across the country, are working on building a skilled sewing workforce while other manufacturers are more focused on technological advancements in order to maintain a competitive edge. Regardless of the industry, a company’s greatest assets always include its employees and its innovative technologies. These are two assets that a company should closely evaluate when selecting a new supplier or assessing a current one.
Based on current trends, it appears that way; however, in no way will the U.S. textile and apparel industries demand the large workforce that once existed well into the 1990s before jobs began to move overseas. In a two-part series, The New York Times features a few companies and their successes as well as challenges during this industry shift. Overall, companies are shifting production from China back to America simply because customers are requesting American-made goods. This growing demand for domestic products has resulted in an increased need for specialized jobs within the U.S. In turn, manufacturers in the city of Minneapolis, as well as several other cities across the country, are working on building a skilled sewing workforce while other manufacturers are more focused on technological advancements in order to maintain a competitive edge. Regardless of the industry, a company’s greatest assets always include its employees and its innovative technologies. These are two assets that a company should closely evaluate when selecting a new supplier or assessing a current one.
What is buffering? Smallbusiness.com explains that, “The purpose of buffering is to account for variability in manufacturing processes, while also maximizing efficiency and profits. In an ideal world, buffering wouldn't be necessary because variability wouldn't exist. However, since variability does exist, it's necessary to use buffering as a means of minimizing the impact of these variables. Through buffering, manufacturers can alter their processes through manipulating inventories, capacities and times. As an example, consider a bottleneck system in which an upstream station frequently breaks down, limiting capacities. To keep the line operating efficiently, the manufacturer could place an inventory, or work-in-place, buffer at that station to maintain optimal production levels.”
Last week, New York City hosted its 10th annual Advertising Week. The weeklong event included the latest products and services offered by marketing agencies, open-forum discussions on marketing strategies and trends, not to mention it featured familiar brand characters such as Star-Kist Co.’s Charlie the Tuna and Kellogg’s Fruit Loops Toucan Sam riding on a double-decker bust through Times Squares to promote the event. As reported by The Wall Street Journal, roughly 90,000 advertising and marketing professionals were expected to participate in gathering that began on Monday and concluded on Friday.
This year, one of the main focuses of the event was on digital marketing, including its products, solutions, tools, and technologies. In just a short time, digital marketing has evolved from simply creating a company website, to a rapidly-changing and extremely targeted marketing channel. Digital marketing has become a fundamental method to sell goods and services; it has become a necessary component of almost all marketing campaigns. According to the research firm eMarketer, digital marketing continues to have a larger role in the advertising industry and is expected to grow nearly 14% in the U.S. this year to $42.26 billion.
One of the fast growing and somewhat controversial tactics and products in the digit marketing landscape is data collection and customer analytics. Now, more than ever, advertisers and marketers rely on “big data” to analyze the consumer’s purchasing trends and their online activities to lead ad-buying decisions. Some marketers have taken a step further and have started to pay attention to what people are saying about products and services on Twitter and other social media platforms. Large to small digital marketing agencies are developing products and tools to collect this vital data for their clients. For example, on Tuesday, RadiumOne Inc., an online-ad firm that targets consumers based on what they share on social media, hosted a panel to discuss how marketers are, as stated by Eric Bader, RadiumOne’s chief marketing officer, "Applying and finding golden nuggets in the data that helps them solve business problems." Acxiom Corp. showcased a new product that will allow marketers and ad firms to use more data in the media-buying and planning process in online and offline media.
This year’s Advertising Week provided great insight on the ever growing digital marketing landscape, specifically on data analytics and the impact it has made in the marketing world. With the placement of an ad on Facebook or the development of an App, digital marketing allows marketers to target customers they could have only dreamed about in the past, truly creating a world without borders. Selecting the right digital marketing company has never been more crucial for businesses today. Companies must consider numerous factors, such as strategic fit, agency competence, delivery, quality performance and digital capabilities. Furthermore, it is now important that the digital marketing agency understands the company’s values, objectives, and goals, thus targeting the right audience with the correct message. From a small digital marketing start-up to a global marketing communications corporation, connecting your business with the right digital marketing agency could be the most strategic decision your company makes.
Photo courtesy of Pleasant Morning Buzz
- Expanding its Energy Efficiency Program (EEP) for manufacturing suppliers
- Instituting specific emissions reduction initiatives with supplies with GHG intensive operations (for example, an LCD panel manufacturer)
- Creating production transportation-related initiatives
- HP plans to release its GHG emission measurements and progress towards its goal through their Global Citizenship Report
This new program extends from HP’s supplier social and environmental responsibility (SER) requirements, which apply to any supplier doing business with HP. HP’s new program will impact over 1,000 production supplies and tens of thousands of non-production suppliers spanning over six continents.
A sheriff in Arizona came up with a way to save tax-payer dollars while at the same time potentially improving the diet of inmates/degrading their quality of life in a way that passes Constitutional muster. He recently began converting the jails’ meal options to vegetarian-only. The meat in meals like beef stew will be replaced with soy products, and the “meatloaf surprise” is now even more so. He will gradually convert the menus for each of the eight jails in his county to all-vegetarian meals.
The jail system is, by some accounts, the third largest in the country. It includes about 8,300 inmates who get two meals a day.
Despite this seeming like a health conscious or environmental move, the five-time elected sheriff has said it is all about cost savings for the county. Rising food costs have been a big concern in recent years, with budgets for the corrections department continually being stretched thin. He estimates replacing the meat for soy will save tax payers $100,000 annually. The prisons currently rely heavily on donations from food banks and other charity organizations.
For many inmates, having to spend time in a tiny cell all day with Bubba is bad enough, but having meat taken away as well? If this vegetarian policy spreads, maybe it could become another deterrent for people to stay on the path of the straight and narrow.
California is requiring manufacturers to find less hazardous chemicals in their products after the state's Safer Consumer Products law goes into effect on Oct. 1, according to Sustainable Business News. In addition to reducing the number of toxic chemicals found in common products, the new law aims to promote green chemistry in the private sector and increase transparency in identifying what products are made of to help consumers decide what to buy.
With this emphasis on green procurement, manufacturers are expected to comply with the law through a number of steps. This includes analyzing their products to provide evidence that their current formulation is safe for consumers or creating a safer alternative.
California strict consumer safety guidelines impacts supply management for global manufacturers who sell in the Golden State.
American Chemistry Council argued the law could pose a challenge to businesses to reduce manufacturing costs and create confusion for consumers, the LA Times reported.
"At best, the proposed regulation will produce a marginal improvement in human health and environmental safety, but at great cost and lost opportunities for businesses nationwide," the chemistry association said in a statement.
The Department of Toxic Substances Control plans to eventually choose up to five "priority products" that manufacturers must reformulate to be safer for consumers by April.
When calculating manufacturing expenses, direct labor costs tend to make up a large chunk of a firm's budget. However, there are solutions that could result in lower labor costs and it starts with the workers themselves. When employees are engaged with their job, they tend to display higher levels of productivity and even improve the safety of those around them, according to Industry Market Trends.
With increased productivity from workers, businesses benefit from more output to meet growing demand from customers. Manufacturers can lower costs associated with their own workforce through motivation, according to Industry Market Trends.
When manufacturing employees are highly engaged with their work, they can increase productivity by an average of 19 percent and safety by 62 percent compared to employees who are disengaged, a Gallup poll revealed.
Since manufacturers strive to ensure safety for their workers and the surrounding public, boosting engagement could potentially decrease the number of accidents in the workplace.
High engagement can also be a factor in employee retention. When employees enjoy going to work, they are more likely to stay with a company, allowing firms to decrease their recruiting costs as well as mistakes in the production process. Motivated workers are also connected to reducing turnover and even reducing absenteeism for a company by 27 percent, according to Gallup.
To help increase engagement and shrink manufacturing labor costs, companies use employee management programs including software analytics for effective evaluation of work productivity.
Problem with manufacturing worker skill shortages
For manufacturers to keep up a high level of performance, they need to employ workers who have the right skill sets to produce items consumers want to buy. However, some experts suggest manufacturing might be struggling because the sector is experiencing a skills gap.
In a survey conducted by the Manufacturing Institute and professional services firm Deloitte, 67 percent of manufacturing executives believed they had a "moderate to severe" shortage of workers capable of filling positions. In the survey, 74 percent of respondents said not having qualified workers with specialized skills has a major effect on their ability to expand the company or improve productivity.
Manufacturing executives are not optimistic this problem will get better in the near future as 56 percent said they predict the shortage will become worse in the next three to five years.
A recent report by The Boston Consulting Group admitted a skills gap does exist but the issues related to this worker shortage will not stop manufacturing from recovering in the near future, according to Modern Materials Handling. BCG approximates the gap at 80,000 to 100,000 highly skilled manufacturing workers, which is less than 1 percent of the nation's total number of manufacturing workers. The BCG also said the scope of the skills shortage is less than feared as significant gaps are found in five of the 50 largest manufacturing centers in the U.S.
Filling the skills gap
There are some industry leaders who dispute BCG's report, saying the skills gap is higher than what is cited in the study. Douglas Woods, president of The Association for Manufacturing Technology, said there is a huge shortage of talent in the manufacturing industry. He said Bureau of Labor Statistics data indicates manufacturing openings have hit an average of 250,000 in 2013.
"There is a deficiency in properly trained workers all over, not just in those locations BCG mentioned," Woods said in an interview with MIT. "It is negatively impacting the growth potential of our manufacturing economy. Every AMT member I have talked to in the last four years has identified this as one of their top three issues.
While Woods disagrees with the shortage figures listed in the BCG report, both agree that the government and private sectors must train students with the skills necessary for manufacturing.
Photo courtesy of CNet.com
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The most iconic Halloween symbol – the pumpkin – is a North American original. The squash derivative first evolved here approximately 7,000 years ago, and the traditional Halloween-style pumpkin, the Connecticut Field pumpkin, originated (not surprisingly) in the Northeast. The carved jack-o-lantern, while derived from a long British tradition of carving lanterns from vegetables, was made fashionable in the U.S. in 1866. Furthermore, if you’d rather eat a pumpkin than cut it into a disfigured grin, you’re likely going to eat a product of Illinois. According to Illinois’ Department of Agriculture, 95% of U.S. pumpkins intended for processing are grown in the Land of Lincoln.
A number of other Halloween staples are also sourced from the good old U.S.A. Virtually everything you want to see in your trick-or-treat bag is made here. Hershey bars and Reese’s cups, both made by Hershey, likely come from the company’s plants in Hazelton, Hershey, or Lancaster, Pennsylvania or Illinois, Virginia, or Tennessee. Tootsie Rolls and Double Bubble gum are also made in plants in Illinois, Tennessee, Massachusetts, Pennsylvania, and Wisconsin. The stuff you hate to see in your trick-or-treat bag is made here, too – candy corn is an all-American product made primarily by Dallas, Texas-based Farley’s & Sather’s Candy Company and Fairfield, California-based Jelly Belly.
And finally, should you strike out on treats and find yourself forced to play tricks, keep this in mind. Popular tree drape Charmin toilet paper was first made in Green Bay, Wisconsin and is now made primarily in a facility in Box Elder, Utah.
Electricity sourcing from storage technologies could be the key to solving energy supply variability, the Energy Information Administration reported.
As electricity demand fluctuates at different time periods, the EIA said improving the amount of storage capacity available could help decouple electricity supply needs from wavering energy demand.
The agency said energy supply is forced to change to match demand because the electric industry does not have large capacity storage. Since hourly demand differs depending on the day, week and year, the EIA said these time periods could be a way to shape storage capacity requirements. For example, storage can charge and discharge for consumption over a day and flattened to meet a daily average of hourly demand. The same can be said for charging and discharging over a weekly average or annual average.
To meet these requirements, there are various storage technologies including pumped storage, compressed air and flywheels. In the case of pumped storage, electricity is converted into another form of energy for storage by taking the potential energy of water and pumping it uphill to a reservoir. Storage capacity is currently below what is needed to meet periodic needs by day, week or year as well as what is needed to meet demand in real-time. However, there could be advances in technology that would allow large capacity storage of electricity to become more economical and may lead to additional cost reduction for companies regarding energy sourcing.
"In theory, it may be possible to store electricity overnight on a large scale to supply afternoon highs (daily), on weekends to supply weekday highs (weekly), and in the spring and the fall to supply summer and winter peaks (annual)," the EIA report said. "Each of these storage opportunities would likely require different storage approaches and technologies."
Solar power capacity beats wind power for first time
While electricity storage is continuing to develop to adequately meet needs of consumer demand, solar power capacity recently surpassed wind power, according to Fuel Fix.
Citing a report from Bloomberg New Energy Finance, 2013 will see an additional 36.7 gigawatts of solar globally thanks to photovoltaic panels while wind farms will see 35.5 additional gigawatts. BNEF said solar capacity is projected to increase approximately 20 percent compared to 2012.
"The dramatic cost reductions in photovoltaics, combined with new incentive regimes in Japan and China, are making possible further, strong growth in volumes," said Jenny Chase, BNEF's head of solar analysis.
Solar energy capacity is boosted by less expensive panel costs and government support.
Philadelphia’s property managers, in a survey conducted last year, estimated that about 48% of the 12 million square feet of building space they currently manage, including City Hall, parks and rec areas, libraries, police and fire stations, prisons, health department facilities, and the Rocky-famous Art Museum, are not in a state of good repair.
Earlier this month, Source One's free set of eSourcing tools, WhyAbe.com, turned eight years old. In honor of the eProcurement service's eight years, here are eight facts about WhyAbe.com and eSourcing software.
Ready?
8. Some of the first items sought on WhyAbe were Sugar, heating oil, and a large quantity of GPS-equipped heart monitors.
7. Suppliers can be invited to WhyAbe on a per-event basis, or they can register on the site permanently and maintain a storefront. There are currently several hundred supplier-operated storefronts on WhyAbe.com, allowing users to quickly source everything from sneakers, to heavy mining equipment, to silicone breast implants.
6. When it debuted in 2005, WhyAbe could only be used to conduct RFX inquiries. Reverse auctions were added 13 months later in October 2006.
5. Blind auctions, which hide suppliers' identities as required by certain government sourcing events, were added in 2012.
4. WhyAbe knows social media. Users can share their sourcing events across Facebook, Tumblr, Pinterest, and 300+ other outlets. Even Twitter.
3. True to form, #4 was under 140 characters. #strategicsourcing #WhyAbe #swag
2. WhyAbe's platform is so robust and has such a lower barrier to entry in terms of user familiarity that it serves as the skeleton of many major corporations own private eSourcing solutions.
And finally, the number one fact about WhyAbe.com is...
1. When it debuted in 2005, WhyAbe.com was the only free eSourcing solution on the market. Eight years later, it is still the only free eSourcing solution on the market.
Have a WhyAbe success story? Add it below. Interested in trying the service out for yourself? Sign up at WhyAbe.com and get started!
Companies in the food industry are known to be the front runners in sustainable sourcing. One of these major contributors to developing sustainable agriculture worldwide is Nestle.
Hans Joehr, Nestle's corporate head of agriculture and co-founder of the Sustainable Agriculture Initiative Platform, highlights the industry's initiatives for green procurement in his interview by Nina Kruschwitz from the Massachusetts Institute of Technology's Sloan Management Review.
The SAI Platform has over 50 members from all over the food industry, including Kellogg's, McDonald's and PepisCo, according to its website.
The group calls itself the sole global food industry initiative that aims toward sustainable agriculture. It strives toward continuous improvement to have farmers around the world have an easier time adopting more eco-friendly practices.
"SAI Platform was created with a very simple idea of putting principles and practices together on sustainable agriculture for certain crops in order to address environmental, societal and economical topics around agriculture production systems," Joehr said.
SAI Platform's work toward sustainable sourcing
Joehr said SAI Platform's member companies share with each other environmentally friendly principles and practices that are tested and constantly improved. He said these companies helped form SAI Platform over 10 years ago because of issues they commonly faced.
"We all have the same problems of quality, of scarcity, of cross-border issues from child labor to pesticide residues to contaminants," Joehr said. "A lot of things are linked to agriculture practices that may end up, at the end of the day, in your raw materials and finally in your branded product."
Hazards that companies typically encounter regarding agriculture involve land use, pollution, resource waste and biodiversity.
In Nestle's approach toward sustainable agriculture, it incorporates the concept of creating shared value rather than dictating eco-friendly practices from the top down from either the CEO or a sustainability officer. Joehr said Nestle wanted to avoid having to turn to nongovernmental organizations to fix problems regarding corporate social responsibility, according to the MIT Sloan Management Review.
Rather than having outside parties attempt to manage risks, Nestle said the company handles them internally through embedded sustainability in its business model. He said environmentally friendly practices happen from the shop floor to the top and establish it into the key performance indicators of every worker. Joehr highlighted this process by saying Nestle cooperates with farmers in order to have raw materials needed for suppliers that provide for the company's factories.
The "Made in USA" label is becoming more prominent in American manufacturing, according to NBC News.
Small business manufacturing and clothing companies are re-considering outsourcing their production overseas in favor of domestic manufacturing. Clothing companies attribute this decision to reshore and make clothing within the U.S. to the costs of producing internationally.
This report seems to correlate with a recent report that indicates more manufacturing executives are planning or at least considering moving production back to the U.S. A survey by The Boston Group of over 200 executives shows 54 percent of respondents may reshore, up 17 percent since February 2012 when 37 respondents gave a similar answer.
In the survey, 43 percent of respondents said labor costs was the main factor that drives their decisions for production locations, followed by proximity to customers for 35 percent and product quality for 34 percent.
Harold L. Sirkin, BCG senior partner and co-author of the study, said the firm expects U.S. manufacturing competitiveness will increase by 2015 and that the latest survey results show a shift in attitude.
"These findings confirm that the reshoring trend is more than anecdotal," said Justin Rose, BCG partner and co-author. "As the costs and benefits become more apparent, we expect more companies to consider manufacturing in the U.S. if their products are to be consumed in the U.S."
Small manufacturers are playing a larger role in improving U.S. manufacturing competitiveness. While labor costs in the U.S. are higher than in Asia or Mexico, apparel manufacturers are cutting costs by streamlining production.
"No one is predicting that we're going back to employment levels in manufacturing that we had 30 years ago," David Trumbull, consultant, textiles and U.S. manufacturing expert, told NBC News. "But 'Made in USA' is a trend we have seen and it has continued."
A recent study shows manufacturer and consumer priorities about products greatly differ, highlighting the role of market research in determining the needs and demands of consumers.
The survey by UL, an independent safety science company, indicated some consumers found manufacturers were lacking in certain areas of production, supply management or human health and environmental concerns.
This includes product quality, which was found to have one of the biggest gaps between manufacturer and consumer beliefs. In the survey, 95 percent of manufacturers said they thought product quality was the most prominent priority while 51 percent of consumers believe manufacturers tended to use the least expensive materials for production without regard to quality.
"Our research provides insight into what we believe is a tremendous opportunity for businesses in the coming years," Keith Williams, chief executive officer of UL said. "For example, in better understanding gaps in priorities, manufacturers can uncover new ways to engage consumers in a dialogue around how their products are made and sourced to provide greater peace of mind."
Another aspect that resulted in different opinions is product safety as 84 percent of manufacturers think consumers are more assured that product safety is increasing but 58 percent of consumers think differently, saying manufacturers prioritize sales over product safety. These results reveal the importance of market research to meet consumer demand in terms of high quality yet safe products.
As for addressing the environmental effects of production, 90 percent of manufacturers said the environment is becoming more important however 40 percent of consumers responded that manufacturers are not doing enough to provide eco-friendly procedures or products.
While consumers may feel this way, more companies are ramping up their efforts to lower their environmental impact. This includes tech company Hewlett Packard, according to Sustainable Business News. HP recently announced it set greenhouse gas reduction targets for suppliers in order to meet its goal of cutting greenhouse gas emissions 20 percent by 2020.
Today, we have expanded our media offerings via two new Podcast channels on iTunes. Under the title of "Spend Management Strategy", the channels -- one in English, the other in Spanish -- offer up bite-sized audio tracks on key strategic sourcing issues. These audio recordings, through the use of a Podcast app, can be automatically downloaded to your Apple device for later listening.
Check them out and let us know what you think!