Posts tagged ‘economy’
Supply Chain Disruption Hits Automakers Following Japan Quake
JW Yates
New York City, NY
According to recent reports circulating on the web, the ongoing auto parts shortage in Japan may lead to a sharp decrease in worldwide car production throughout 2011. European, Asian and American car makers rely heavily on auto parts produced in Japan, and, as with most modern manufacturing systems, they rely on just-in-time delivery to maintain rigorous production schedules. Even a temporary delay in supply delivery can have lingering effects on output.
One analyst’s report, cited in The Wall Street Journal on Tuesday, predicts that auto production may be cut by 15% to 30% in the next year. This estimate would suggest that 20 million fewer vehicles will roll out of factories than expected before the recent quake tragedy and nuclear crisis in Japan.
http://blogs.wsj.com/drivers-seat/2011/03/29/could-shortages-cut-car-production-by-30/?mod=e2tw
Many industry watchers say that US auto producers will likely experience a lesser impact than their Asian counterparts who rely more heavily on Japanese parts. Still yet, there are fears that, as the supply chain disruption continues, consumers will start seeing fewer choices of vehicles, longer waits and higher prices in the short-term.
The BBC reports that Toyota Motors will curb its North American production due to parts scarcity, and General Motors as well recently announced suspension of production at one its US plants due to parts shortages.
http://www.bbc.co.uk/news/12858580
If the situation in Japan worsens, or becomes more protracted, there is little doubt that assembly lines across the world will face further slow-downs as a result. Auto manufacturers are not the only businesses reeling from this month’s record-breaking quake and tsunami. Already big-time electronics players like Toshiba have experienced supply chain disruptions since the crisis began. Industry watchers here and in Asia are scrambling to make predictions about what’s to come.
The true toll of Japan’s disaster may not be seen for some time, as manufacturers rely on stock parts and supplies that were already in transit when the quake struck. Once supplies on hand run out, further shutdowns are imminent.
One thing is for certain: if Japan continues to struggle with its ability to generate electricity nationwide, there is little hope for restoring auto parts production to pre-quake levels. In addition, the human toll, and the scope of the social tragedy in the wake of the disaster, may have inestimable effects on Japan’s productivity in the near future.
These various factors have compounded to make Japan’s manufacturing future unpredictable at best. This most recent example of supply chain disruption serves as a reminder that, no matter what industry you are in, it is essential that you keep as close an eye as possible on every aspect of your supply chain. In a world of interdependent production models, every industry must be able to react quickly to supply chain problems. That is why so many modern manufacturers rely on Supply Chain Management Software and Product Lifecycle Management tools to help oversee and control their supply chain.
If you are concerned about supply chain oversight, or would like to find out how a PLM system could help you weather the storm of supply disruption, please get in touch with us here at BMS. Our VerTex software system could be the management tool you need to prepare for the next global supply chain crunch.
Business Management Systems
330 West 38th Street
Suite 705
New York, NY 10018
(800) 266-4046
info@bmsystems.com
This week in Apparel World Tug of War …
…”Tensions rise in the apparel industry as retailers push garment makers for a faster turnaround on smaller orders in time for Christmas. This lowers the risk for a fashion miss…” writes Elizabeth Holmes. Teen retailer Aeropostale, Inc. is noted as one of the companies that has honed in on the ability to quickly follow up on orders, never having a problem with a turnaround. Read more of this article “Tug of War in the Apparel World” below
Fast Retailing Co. Ltd. gives Bangladesh a Boost
Our client Theory’s parent company Fast Retailing Co. Ltd. is giving Bangladesh a boost “launching an intiative to produce low-cost clothing and create jobs for the people of Bangladesh”. Read more in the following links:
BMS at the California Fashion Association’s ‘Economic Crystal Ball’
Business Management Systems is a proud member of the prestigious California Fashion Association, and greatly looking forward to attending tomorrow’s special CFA event: ‘Economic Crystal Ball’.
“The California Fashion Association presents a relevant program for today’s
economic uncertainty. A diverse panel of experts will weigh in with their
‘crystal balls’ for Retailing, Transportation, International Trade, and all
things related to the future of the Apparel & Textile industry of
California.”
We look forward to what is sure to be a rich and enlightening program, and excited to once again connect with fellow CFA members (and to meet some new faces as well)!
Business Management Systems Presents: ‘PLM Basics: What it Means to be Lean & Green’
“We as businesspeople are feeling the heat more than ever to make thousands of dollars in cuts in order to stay afloat in this floundering economy and to “go green” to aid in the preservation of the Earth’s dwindling resources. And fortunately, most of us are heeding the call.
We all know we need to make our businesses leaner and more efficient, but few of us know how to go about it. Those of us who are hesitant to make these kinds of changes may simply be getting overwhelmed by the “big picture”. The idea of essentially reformatting the fundamental way our businesses function may seem a daunting task, if not an impossible one.
This is the precise reason that companies such as Business Management Systems (BMS) have developed specialized product lifecycle management (PLM) software solutions which allow the user to synchronize an entire business from design to delivery, as well as streamline all processes, save money, maximize efficiency and profitability-all while minimizing clutter and paperwork for an increasingly paperless and more eco-friendly company.”
Download our full white paper on Just-Style PLM Hub now!
Extra Measures taken for PLM Industry during Economic Hardship
CIMData sent out a release today stating that due to the current economy’s continued downward spiral, they are calling for a mid-year update on the economic outlook for the PLM industry. They assure us that although the short-term forecast may be bleaker than initially predicted, a rebound is expected over the latter part of 2009 and 2010.
Click to read the press release now.
BMS Blogs! - Fashion, Technology, Software & Beyond... 
PLM for Inventory Control – ‘Storing Cash’ from Footwear News
I recently read an excellent article in Footwear News called Storing Cash by Jocelyn Anderson, which focused on inventory control as a means of improving cash flow in times of economic decline.
SVP of RMSA Retail Solutions Paul Erickson is quoted as saying, “Inventory is No. 1, and the faster you sell it, the better your cash flow.”
To achieve this delicate balance, Bob Schwartz, president of of Eneslow Pedorthic Enterprises says, “If you think of each shoe box as dollars, the most important thing to do is tighten your inventory. Never be out of your core and don’t worry about the fringe—there’s no room for B- and C-level product right now.”
As a member of the PLM industry, it got me to thinking about and appreciating PLM in terms of inventory control and economic soundness.
Anyone’s who’s looked into PLM knows the gist of what PLM achieves—it creates a more efficient business and saves appreciable money, materials and labor, all while generating outstanding ROI. But when you break down the big picture, just like Erickson says, inventory control really is at the heart of it all.
For example, one of the core ways PLM saves a company money is by allowing a user to determine not only how much of a material is needed to create a product, but to determine exactly how many passes of the needle are required to stitch it together. This allows for laser-precise inventory control, saving fabric, thread, labor and time—and money on all of the above. Once a product is created and sold, meticulous records are generated, logging how many pieces where sold and delivered to each store, making it easy to re-order materials and produce the correct amount to fill another order.
One could argue that during an afore mentioned period of economic decline may not be the time to invest in a PLM system. I would like to argue that PLM may be the one safe investment during times of economic hardship. In my experience at BMS (where our clients enjoy 100% successful implementation and customer satisfaction rates) it is the one investment statistically proven generate profits, and could be just what the doctor ordered in terms of inventory control and economic stimulation.
Has anyone else read the article? I’d appreciate any comments or thoughts you may have on this topic!
September 24, 2009 at 9:06 pm Leave a comment