Redimo News

Toyota & BMW sign engine deal

Mon, 05 Dec 2011 00:00:00 +0000

Toyota has signed an agreement with rival automotive manufacturer BMW to buy 1.6 and 2.0 litre diesel engines for the manufacture of hybrid cars. The “supply and development” deal between the two companies, which is part of a wider collaboration, will see Toyota begin receiving the engines in 2014. While Toyota - which manufactures the Prius hybrid vehicle - is not ready to reveal which models the engine will be used in, it stated that its European manufacturing plants would receive the engines. In a speech announcing the collaboration, Didier Leroy, president and CEO of Toyota Motor Europe, suggested the companies would look to expand the deal to benefit from economies of scale by combining their buying power. He said: “By working together with an industry leader like BMW, we think we can do this [manufacturing hybrid cars] more efficiently, realising improved scale, reduced development costs and quicker speed to market.” The collaboration will see them take advantage in areas where they are looking to develop. BMW will use it to further its expansion into “sales activities for engines” while Toyota will be able to put BMW’s engines into its cars, which are the highest selling in volume terms. Norbert Reithofer, chairman of the board of management at BMW, said: “Supplying Toyota with our fuel efficient and dynamic diesel engines represents another important step in the planned expansion of our sales activities for engines and powertrain system.” The deal with Toyota is the latest in a line of deals that BMW have made with competitors. Since 2008 it has teamed up with fellow German carmaker Daimler to negotiate better prices on purchasing raw materials. Earlier this year it set up a joint venture with PSA Peugeot Citroën to joint purchase car components for hybrid models. Read more on http://www.supplymanagement.com/news/2011/toyota-signs-engine-deal-with-bmw/?utm_source=Adestra&utm_medium=email&utm_term=

The service sector grows despite uncertain economy

Mon, 05 Dec 2011 00:00:00 +0000

The UK services sector grew modestly last month in the face of higher input costs and more job cuts. Business activity in November, rose slightly for the eleventh month in a row but this gain was undermined by an economic climate that saw job cuts accelerate to its quickest pace for over a year, according to today’s Markit/CIPS UK Services Purchasing Manager’s Index. The PMI recorded 52.1 in November, a marginal improvement on October’s 51.3. A reading above 50 indicates growth. Rising utility bills and increased transportation costs continued to contribute to a strong rate of input price inflation. But competitive pressures to stimulate demand dampened businesses’ moves to pass price rises on to customers, and as a result output charges changed little since September. Evidence of spare capacity was provided by faster falls in backlogs and employment. Although modest, the rate of job cuts was the quickest in 15 months. Some purchasers blamed a lack of incoming new business as a factor behind redundancies, while others sought to better match staffing and costs to business requirements. Business confidence was slightly lower than October’s five-month peak. Hopes of an improved economic environment, the 2012 Olympics and the start of new projects were factors reported to have contributed to positive expectations. Those forecasting a decline in activity attributed their pessimism to general economic uncertainty and public spending cuts. Chris Williamson, chief economist at Markit, said: “Companies remained concerned about the outlook, with headcounts falling at the steepest rate for over a year as a result. With the private sector cutting staff at the same time as government spending cuts reduce the public sector payroll numbers, unemployment looks set to rise above the current rate of 8.3 per cent. “Whether or not the economy slides into recession next year depends to a large extent on whether politicians can find a workable solution to the eurozone’s crisis." Read more at www.supplymanagement.com

Manufacturers to up supplier numbers

Mon, 05 Dec 2011 00:00:00 +0000

More than a third of manufacturing companies in the US and Europe have increased their supply base in the third quarter, according to a report from manufacturing consultancy MFG. The quarterly manufacturers survey, by MFG.com, found that 90 per cent of respondents have either increased vendors or left supplier numbers unchanged in the last three months. In all, 43 per cent increased and 47 per cent kept numbers the same. The survey also found that ‘reshoring’, or bringing production or switching suppliers back to company’s home country, increased with 19 per cent up from 15 per cent in the previous quarter. However, the authors found: “reshoring or repatriation of production is clearly noticeable, but hardly a trend to offset off-shored production.” Key threats to the supply chain identified by respondents included the availability of competent suppliers (46 per cent), logistics and shipping costs (45 per cent), product quality compliance (40 per cent) and fuel/oil prices (31 per cent). Read more at www.supplymanagement.com

Talent shortage is a major procurement challenge admit CPOs

Tue, 13 Sep 2011 00:00:00 +0100

Talent management remains a problem that organisations are trying to overcome, according to a survey of 432 global procurement executives published by Accenture. The Accenture research and insights into high performance in procurement report identified areas in which purchasing professionals will focus more attention on over the next five years, and found CPOs are keen to overhaul approaches to talent management. They said the main procurement shortfall is in the area of competency building at all levels, spanning traditional purchasing techniques and new skills necessary to lead the charge into sustainability, risk management and product innovation. “Talent may well be the procurement organisation’s single most scarce resource in the next decade. Yet it appears to be the one procurement dimension in which organisations still do not excel. If this situation persists, procurement will be hard-pressed to hire and retain the talent needed to support long-term success,” said the report. One CPO said he had too many buyers who were comfortable only with competitive bidding competencies. The report said the ability to conduct more advanced strategic thinking is becoming more important and “procurement organisations should balance strong competence in competitive bidding with advanced strategic skills”. Jeremy Robinson, head of UK & Ireland sourcing and procurement at Accenture said: “Getting talent management right is an issue. As well as developing buyers, companies need to look outside the function.” He highlighted the case of a financial organisation involved in motor claims insurance management that trained some of its engineers to become buyers because of their in depth technical knowledge. Read more: http://www.supplymanagement.com/news/2011/talent-shortage-is-a-major-procurement-challenge-admit-cpos/

South African Rugby Union under fire for not sourcing locally

Thu, 08 Sep 2011 00:00:00 +0100

Just days before the World Cup kicks off, workers unions in South Africa have called on the South African Rugby Union (SARU) to prove it uses local suppliers. The national rugby federation was criticised by unions earlier this week after it emerged that some of its green and yellow garments had been imported from a Chinese company. SARU insisted that the majority of jerseys were made locally but now the Southern African Clothing and Textile Workers Union (SACTWU) is demanding an independent review to substantiate the claims, arguing that the evidence on the shelves proves otherwise. “We challenge SARU to subject their claim to an independent audit,” a statement issued by Andrew Kriel, general secretary read. “This will once and for all empirically expose the truth.” The plea comes a day after The Congress of Southern African Trade Unions (COSATU) called on SARU to issue an apology to workers and the country for not “supporting proudly South African production”. COSATU blasted the outsourcing as a “scandal”. It added: “We remain loyal supporters of the national team, but this act does dampen our enthusiasm, as workers are the losers by SARU actions. We are further calling on SARU to give an undertaking that a special arrangement will be made to manufacture locally made supporters clothes by Friday 9 September 2011.” The union said it would protest against SARU during the World Cup, which starts in New Zealand tomorrow, unless its demands were met. A SARU spokesman would not be drawn on whether the organisation would consider conducting an audit but insisted a ‘significant percentage’ of its supporter wear is sourced from local manufacturers. “The majority of these products are produced in South Africa and we are firmly committed to increase the local manufacturing component of such products in the future,” it said in a statement. Read more at http://www.supplymanagement.com/news/2011/south-african-rugby-union-under-fire-for-not-sourcing-locally/

Experian urges buyers to be alert

Mon, 18 Jul 2011 01:00:00 +0100

UK companies may be performing better, but buyers must remain vigilant in monitoring suppliers to avoid negative exposure from companies going bust. According to Experian’s latest insolvency index, the number of business failure rates in June dropped for mid-sized companies in England, Scotland and Wales, when compared to the same month a year ago. The rate of failure among companies with 101-500 employees fell by more than half in June, when compared to the same month in 2010, dropping from 0.17 per cent to 0.08 per cent.
However, Experian warned purchasers to be aware of possible risks. Max Firth, managing director for business information services at Experian, said: “Although the data shows improvements in some regions and sectors, individual organisations feel the impact in different ways. It is vital for businesses to understand and monitor the circumstances of those they are doing business with and the risks they could expose them to. The largest companies have experienced a turnaround in fortunes and now the larger mid-sized businesses are following suit, with a significant improvement since last year.” The East Midlands was the most improved region in June 2011, with the failure rate dropping from 0.11 per cent in June 2010 to 0.09 per cent. The South West had the lowest rate of failures, with just 0.07 per cent of the business population becoming insolvent last month. In contrast, companies in the North West and Scotland experienced a rise in insolvencies. Some sectors fared better than others. The building materials industry had the highest rate of failure at 0.27 per cent, followed by building and construction, with a rate of 0.18 per cent. Read more http://www.supplymanagement.com/news/2011/experian-urges-buyers-to-be-alert/

Significant demand for public sector outsourcing forecast

Mon, 18 Jul 2011 01:00:00 +0100

The value of services outsourced by local authorities will increase by £40 billion in the next five years, it has been predicted. Colin Cram, managing director of consultancy Marc1 and author of a report by the Institute of Directors into public procurement, said while the value of outsourced services is currently around £80 billion a year he expects this to rise to £120 billion by 2016. Consequently councils need to work together more effectively to avoid potential problems, he told delegates at the Public Procurement Show in London last week. “Local authorities really need to coordinate their demand and plan ahead,” he said.“Councils must take a realistic view of how much outsourcing they do and not just have a big outsourcing strategy without assessing whether it’s the right thing to do”.“In one or two years time it looks like there is going to be greater demand from local government for outsourcers than supply. This is good news for suppliers, not so good for local government. The worry is that competition will be between councils trying to get private sector firms to take on work, and not between outsourcers.” Cram also said one threat to successful outsourcing is the over-optimism and naivety of chief executives around the topic, who see it as a path to big savings. “If they spoke to other chief executives who’ve been involved in outsourcing they may hear a different story.”He added this failure to meet expectations was often caused by poor due diligence. This includes weak risk analysis, no clear objectives agreed at outset, no consistent support from the top, in-house staff undermining the outsource firm by duplicating outsourced work, poor understanding of the work to be outsourced, unclear outcome specifications, over-confident suppliers who fail to deliver, no plan for the end of the contract, no exit strategy, insufficient retention of in-house expertise, “outsourcing a mess” and a lack of “future-proofing” to ensure the contract covers a changing business environment. Failure to bring procurement in at an early stage into discussions also hindered outsourcing efforts.Councils should also assess alternatives to outsourcing to help. In some cases, process improvement, benchmarking, collaboration with other organisations or staying as you are is a better option. Read more http://www.supplymanagement.com/news/2011/significant-demand-for-public-sector-outsourcing-forecast/

Comedy star to host CIPS awards

Wed, 06 Jul 2011 01:00:00 +0100

The host for the upcoming CIPS Supply Management Awards 2011 will be Bafta-nominated actor, comedian and writer Miranda Hart. Over the past 12 months, the Torquay-born star has received a number of honours, including three Royal Television Society awards for her self-titled sitcom Miranda. But this September she will instead be rewarding the achievements of procurement professionals. In association with BravoSolution, the awards celebrate excellence in purchasing and supply management. The evening will see procurement teams battle it out in 10 categories, including ‘Best contribution to the reputation of the procurement profession’, ‘Best people development initiative’ and ‘International purchasing project of the year’. There will also be individual awards to recognise the ‘CIPS procurement and supply chain management professional of the year’ and ‘CIPS young procurement and supply chain management professional of the year’.
The full list of categories and nominations can be found here. Read more http://www.supplymanagement.com/news/2011/bbc-comedy-star-to-host-cips-awards/

Telecoms rivals audit shared suppliers jointly

Wed, 06 Jul 2011 01:00:00 +0100

Deutsche Telekom, the parent company of T-Mobile, has teamed up with competitors France Telecom-Orange and Telecom Italia to increase the number of supplier audits. The three companies entered into a Joint Auditing Cooperation (JAC), which enabled them to audit 18 shared suppliers in 2010. This pushed Deutsche Telekom’s total number of supplier audits to 24 compared with a previous yearly average of between four and six vendors. Deutsche Telekom’s 2010/2011 Corporate Responsibility report revealed that through the JAC the companies plan to conduct 34 social audits of shared suppliers. A total of 18 audits were done last year and the remaining 16 are scheduled for 2011. The companies are also developing standardised social and environmental criteria, which all suppliers must meet. While Deutsche Telekom failed to meet its target of 50 audits in 2010, it has reiterated its aim of appraising 200 suppliers between 2010 and 2012, both through the JAC and independent checks. Under the company’s social audit process, which is focused on suppliers in . The report said: “This collaboration is unique in the industry. The companies agreed to engage in a joint procedure to improve the sustainability of their supply chains in Asia. In October 2010, this decision resulted in a binding agreement, the JAC. We are planning to expand our cooperation with France Telecom-Orange and Telecom Italia. Our next step will be to develop joint measures as part of JAC to improve supply chain transparency in 2011.” Read more http://www.supplymanagement.com/news/2011/telecoms-rivals-audit-shared-suppliers-jointly/

Telecoms giant rolls out responsible purchasing

Mon, 27 Jun 2011 01:00:00 +0100

Human rights training for buyers at France Telecom-Orange will be rolled out globally across the group. According to the company’s corporate social responsibility report, published yesterday, the training courses are aimed at raising awareness among purchasers about the importance of suppliers complying with basic human rights. In 2007, a course on responsible purchasing, which includes human rights issues (in particular the prohibition of child labour), was introduced at France-Telecom. It is now being redesigned for international use. As part of France Telecom-Orange’s responsible purchasing policy, all contracts with suppliers listed at group level, plus a growing proportion of local purchasing contracts, include a human rights clause on ethical practices that sets out the company’s expectations. France Telecom-Orange said it is working to raise awareness among its purchasing staff about the need to monitor suppliers’ compliance with its code of ethics and work with them to overcome any issues. The group’s suppliers are regularly assessed to ensure they comply with CSR and performance targets. In 2010, suppliers were asked to complete an online questionnaire on basic human rights compliance and on site audits were conducted as part of a joint initiative undertaken with The French Federation of Telecommunications. http://www.supplymanagement.com/news/2011/telecoms-giant-rolls-out-responsible-purchasing/

Buyers team up with local business friends from the North

Mon, 27 Jun 2011 01:00:00 +0100

Purchasers from AMEC and EDF Energy are holding a ‘meet the buyer’ event in Sunderland this week to try to increase their spend with local suppliers. Procurement Exchange is an annual networking event that has been running for the past three years and is open to members of business support group NOF Energy. Around 40 suppliers from Yorkshire and Scotland are expected to attend the event at Sunderland football stadium on Thursday in the hope of winning contracts in the oil and energy sector. Suppliers will have five opportunities to pitch to purchasers from major companies in the energy sector. A spokesman for NOF said that previous events have generated £140 million in new business for its members, with deals ranging from the supply of engineering components to painting contracts. Business development director for NOF Joanne Leng said: “The Procurement Exchange is an unparalleled opportunity for both purchasers and suppliers, providing them with the best possible meetings for their businesses. Having a guaranteed face-to-face meeting with a potential customer can make a real difference to a business looking to grow its presence in the energy sectors.” http://www.supplymanagement.com/news/2011/buyers-team-up-with-local-business-friends-from-the-north/

Coca-Cola raising prices due to 'higher-than-anticipated' costs

Mon, 27 Jun 2011 01:00:00 +0100

Coca-Cola, the world's largest soft drink maker, is planning to raise prices on its soft drinks by between 3-4% in July according to an industry newsletter.

The Beverage Digest newsletter reported that letters had been sent from Coca-Cola refreshments, Coke's company-owned bottling business in North America, to retailers, saying that price increases were necessary due to higher-than-anticipated costs for key ingredients, such as corn and oil.

This news comes on top of the 2% increase that Coca-Cola implemented earlier in the year and will mean that prices will be 5-6% higher than they were a year ago.

PepsiCo is also reportedly looking to raise prices in July by between 3-5% with the increases coming through raising wholesale prices, scaling back discounts and shifting the mix of sales to products sold at a higher price.

http://www.procurementleaders.com/news/latestnews/2603-coca-cola-rising-prices/

Technology not a replacement for purchasing basics, says Findus

Tue, 31 May 2011 01:00:00 +0100

The right people and processes must be in place before e-procurement tools can be successful, according to a top buyer at Findus Group. Procurement teams should approach sourcing and spend visibility software as additional tools, not a replacement for procurement fundamentals, said Richard Stables, purchasing director - essentials, with the food manufacturer.  “The buyers have to have a certain capability,” he said. “You have to have a certain strategic approach. If you don’t have the fundamentals in place in people and process, e-sourcing is not going to be the solution to all of your challenges – it can fail as well as succeed.”  Three-and-a-half years ago, when Stables joined Findus, it did not do e-sourcing. Although he had experience of these tools at his previous employer Heinz, he did not implement them immediately at Findus.  “It was a case of building credibility, getting the right structure in place, starting to have the right kind of results, and then overlaying the e-sourcing module,” he told delegates at the Ariba Live 2011 conference in London this week. Now the team is moving on to implement Ariba’s spend visibility tools, he said.   Both tools allow buyers to become more strategic, and focus on high-value activities. “The buyer wants to spend less time [collecting data], and more time managing the supplier relationships and presenting of the options to the business. I want my buyers to be doing those kinds of things; I don’t want them to be spending three months of a four-month tender cycle doing data.”   In a recent tender, e-sourcing allowed the buyer to spend more time visiting supplier locations in China, India and Turkey, to establish a strong network, Stables said. “They were selling Findus to [the suppliers], saying, ‘This is why you want to be doing business with us’. At the end of it we had a truly global sourcing exercise.”   Over the first two years using e-sourcing tools from Ariba, Findus has averaged about 10 to 12 per cent saving on contracts.

Oil to reach $140 a barrel by the end of 2012!

Tue, 31 May 2011 01:00:00 +0100

Investment adviser Goldman Sachs is forecasting supply constraints will push oil prices up to $140 (£87) a barrel by the end of 2012. In a note to its clients, the firm said short-term shocks that affected supply, such as political unrest in north Africa and the Middle East and the natural disasters in Japan, that pushed prices up recently and threatened to weaken demand for key commodities including oil and copper, would abate. But underlying demand would still push prices up. “Although the economy has likely shifted into a slower, but sustained, growth environment, we continue to expect that economic growth will likely be sufficient to tighten key supply constrained markets in [the second half of 2011], leading to higher prices from current levels,” the report said. The report forecast that by the end of 2012, crude oil would be $140 (£87) a barrel and would be at $130 (£80) a barrel by this time next year. It raised the forecast for prices at the end of 2011 from $105 (£64) to $120 (£74) per barrel. The report argued that although shocks from recent natural disasters had affected market prices in the short-term, the effects of disruption in the Middle East and north Africa could be felt in the longer term. “We expect that the ongoing loss of Libyan crude oil production… will continue to tighten the oil market to critical levels in early 2012, with rising industry cost pressures likely to be felt this year,” the report said.

Young 'geeks' in rush to join purchasing profession

Fri, 13 May 2011 01:00:00 +0100

The procurement profession is experiencing an influx of young people with analytical skills to maximise cost-saving opportunities. But these new entrants are not getting the support or training they need, research by consultancy Efficio has warned.According to the Grassroots Procurement Survey, 40 per cent of 175 European buyers said they have been working in purchasing for five years or less. In comparison, a third of all respondents had been working in the profession for at least 15 years. James Jenkinson, vice-president at Efficio, told SM: “A lot of companies are realising the need for a more analytical approach to procurement to understand where there are cost-saving opportunities which will also help them negotiate with suppliers. “Rather than put pressure on suppliers to drive down prices, this analytical approach requires the recruitment of new people who have a numbers-driven skill set. This approach brings a new breed of procurement people – involving a rise of the geek. ”But the study, conducted between September and December last year, found poor training and heavy workloads was hindering their purchasing. Fewer than one in ten buyers said their training was of a high standard. Efficio said it is often too general and must be better tailored to the specific needs of purchasers. Another key challenge was that two thirds of respondents managed at least 31 suppliers. The consultancy warned buyers must not be over-burdened with the management of too many suppliers. Focusing on a small number of core categories produces better results, increases staff motivation and improves relationships. More than a quarter of respondents admitted they never or rarely changed suppliers, and half did not challenge specifications drawn up by non-professionals. In addition, just 19 per cent said they always provide feedback to suppliers, leading to a worsening in buyer-supplier relations. Most businesses were found to follow a formal sourcing process, but 67 per cent indicated this would be completed in 10 weeks or less. “Times are changing in the world of procurement – it is becoming a younger profession making a huge contribution within the organisation,” said Jenkinson. “However there are still some serious weaknesses. Too much training is very general and fails to meet their needs. These gaps need to be filled so that procurement people can help make business more efficient, save money and improve services.” To read more: http://www.supplymanagement.com/news/2011/young-geeks-in-rush-to-join-purchasing-profession/

Mining boom to boost local suppliers in Australia

Thu, 12 May 2011 01:00:00 +0100

The Australian government has introduced an AUS$34.4 million (£22.5 million) package to help domestic manufacturing firms benefit from the nation’s mining industry boom. Announced during this week’s budget, the Buy Australian at Home and Abroad initiative will include AUS$12.1 million (£7.9 million) funding over four years to expand the ‘supplier advocates programme’ to promote local firms to buyers in the mining sector, including the employment of four more staff. The Australian economy has benefited from the boom in commodities, which has boosted its mining sector. However, the subsequent strength of the Australian dollar has made life difficult for the country’s manufacturers seeking export growth. The scheme is designed to help address this problem, in part through procurement. It will spend AUS$4.4 million (£2.9 million) over four years to expand the ‘supplier access to major projects programme’ which places industry specialists in the procurement teams of some of Australia's major resources sector companies to ensure the capabilities of local suppliers are appropriately represented. The initiative also allocates AUS$2.5 million (£1.6 million) over four years to establish a ‘resources sector supplier advisory forum’ comprising representatives from major raw materials companies, manufacturers, mining technology firms and unions. The goal is to boost the role of domestic companies in the mining industry. Wayne Swan, Australia’s deputy prime minister and treasurer, said: “This package responds to the challenges and opportunities emerging from the current patchwork economy and the high Australian dollar by assisting manufacturers to take advantage of new growth prospects. “This package will help manufacturers to build on existing skills and identify new supply opportunities in the resources sector.” To read more http://www.supplymanagement.com/news/2011/mining-boom-to-boost-local-suppliers-in-australia/

Japanese supply chain disruption cuts Toyota profits

Thu, 12 May 2011 01:00:00 +0100

Supply disruption to Toyota’s car production caused by the Japanese earthquake has contributed to the company missing profit forecasts by ¥81.8 billion (£620.8 million). In results for the 2011 financial year published yesterday, the automotive manufacturer said suspension of vehicle production and a fall in a number of sales caused by the earthquake in Japan last March meant it made less profit than it had expected. The company made an operating profit of ¥468.2 billion yen (£3.5 billion) against a predicted ¥550 billion (£4.1 billion). Car manufacturers have been forced to cut production at plants because of supply chain disruption such as compulsory power cuts and problems getting parts to factories. Toyota said production was not expected to return to normal until November at the earliest. Akio Toyoda, president of Toyota said in a statement: “In Japan, we are currently operating at about 50 per cent. We will mark that as the low point from which we intend to increase production. As for production outside Japan, we are currently producing at about 40 per cent. To all the customers who made the decision to buy a vehicle made by us, I sincerely apologise for the enormous delay in delivery.” The company statement added it “is carefully monitoring the situation in each region and for each vehicle model and is every day working its hardest to identify every way to restore production as much as possible.” Toyota chose not to report other fiscal forecasts for the year ahead, because it said it needed more time to understand the full impact of the earthquake. To read more: http://www.supplymanagement.com/news/2011/japanese-supply-chain-disruption-cuts-toyota-profits/

Coca-Cola Bottling Co raises glass to supply chain optimisation

Thu, 12 May 2011 01:00:00 +0100

Coca-Cola Bottling Co has said that supply chain improvements will play a key role in a campaign of "adjustments" that it is undertaking to maintain profitability as high commodity prices hit sales.

William B. Elmore, president and COO, said: "As we have been doing over the past several years, we will continue to look for ways to improve our supply chain and minimise our operating costs. We will also review our pricing and make adjustments as necessary to maintain our profitability."

He added that rising fuel prices have been hitting sales: "However, we believe that our greatest challenges in 2011 lie in the months ahead. As we look to the remainder of 2011, the challenges are expected to get tougher as higher commodity prices will have greater impact on costs. We are also starting to see lower sales trends in our convenience store business as consumers react to higher fuel prices."

Reporting its first quarter 2011 results the company announced it earned $5.9m on net sales of $359.6m for the first quarter of 2011, compared to net income of $4.7m on net sales of $347.5m for the first quarter of 2010.

The results for the first quarter of 2011 included $0.4m of after-tax losses ($0.7m on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminium hedges.

J. Frank Harrison, III, chairman and CEO, said: "We are pleased with our first quarter results. We continued to grow our revenue and effectively control costs which resulted in a strong start to 2011."

However, he went on to warn: We continue to face many challenges including the potential for significant increases in commodity costs and persistently high unemployment in the areas we serve. "

To read more: http://www.procurementleaders.com/news/latestnews/1911-bottling-co-raises-glass/

Vehicle logistics needs 3 to 5bn euro investment

Thu, 12 May 2011 01:00:00 +0100

Europe’s vehicle logistics sector needs to invest some 3 to 5bn euros to restore capacity shed in the downturn or risk choking off the motor industry’s wider recovery, according to Costantino Baldissara, president of EGC the Association of European Vehicle Logistics. Speaking at the association’s annual assembly in Warsaw, Baldissara said: “Demand for new vehicles is on the rise in most of the major European markets, and this will inevitably translate into greater demand for logistics services. Looking ahead, this spells better times for our sector.” However, he said, logistics service providers cut some 20 per cent of capacity as demand plunged through the economic crisis. Capacity shortages remained, even in countries like Italy where demand has fallen sharply. In addition, rates were under pressure and costs were on the rise, squeezing margins and profits. Baldissara stressed “the need for 3 to 5 billion euros of investment to restore the capacity shed during the downturn”, this for a sector that, with the exception of a few larger, capital-intensive companies, is barely breaking even. There is a risk that without this investment a lack of transport capacity may choke off the industry’s wider recovery. To read more: http://www.logisticsmanager.com/Articles

Record year for procurement outsourcing

Tue, 12 Apr 2011 01:00:00 +0100

Procurement outsourcing had a record year in 2010, a report from the Everest Group has found. The research firm’s survey of the procurement outsourcing market found new contract signings and extensions reached an unprecedented level last year. Meanwhile, annual contract values grew 13 per cent to reach $1.3 billion (£792 million) in 2010. And cumulative total contract value (TCV) for existing and new engagements hit $9 billion (£5.48 billion) - an increase of 15 per cent from 2009. Everest vice president Saurabh Gupta, said: “We continue to see an increase in sourcing-focused contracts, driven by the need to generate quick savings, and we expect to see these contracts expand into transactional services to ensure compliance and sustainability of savings.” Everest forecast that annual contract values for procurement outsourcing would grow to $1.5 billion (£914 million) in 2011, up 15-20 per cent on 2010. Consumer goods firms, retailers and manufacturing companies are expected to continue to lead the outsourcing trend, while financial services, hi-tech industries and telecoms are expected to see significant increases too. The report highlights a number of prominent procurement outsourcing deals including: Doosan Infracore Construction Equipment’s tie up with ICG Commerce
BlueScope Steel’s contract with Capgemini
General Electric’s deal with Genpact