@Risk

North American manufacturing suppliers are generally healthier than they were in 2009.

But, we’re not out of the woods, yet.

BBK, a business advisory and performance improvement firm, says that among the private companies it analyzes, 65 percent now rate as financially stable, compared to only 46 percent that earned that rating back in 2009.

However, nearly one-quarter (24 percent) of those in the latest BBK ratings are still showing signs of financial distress. As a result, many manufacturers remain concerned that their suppliers’ financial health can deteriorate quickly and potentially disrupt their operations. (more…)

Even though many have had to cope firsthand with disruptions caused by recent natural disasters such as Iceland’s volcanic eruption or the earthquake and tsunami in Japan, executives now see cyber attacks –rather than physical attacks –as potentially the most damaging to their supply chains, according to new report from PwC.

The report, Volume 4 of the Transport & Logistics’ 2030 series Securing the Supply Chain, is a joint project between PwC and the Supply Chain Management Institute (SMI) at EBS Business School in Germany.  It warns that cyber attacks are now so sophisticated that any business, or even country, could be at risk. (The German internet, for example, is attacked every two seconds, PwC says.)

On average, the 80 science, government and business executives polled agreed that there is a 56 percent probability of a rise in attacks in some form. Overall, those surveyed said they were even more concerned about hacker attacks affecting their supply chains than they were about actual physical attacks.

In addition, survey respondents said there was a 70 percent probability of logistics companies having to perform obligatory security checks on their whole supply chain, and they said there was a 60 percent probability that modern technology would offer businesses better protection.
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An earlier study showed us that the US auto industry is poised for growth over the next few years.

Now, a new analysis concludes that the aerospace and defense industry can expect growth, too –although it’s likely that any gains on the commercial side will be counterbalanced with the burden of tightened national defense budgets.

Last week, the global business-advisory firm AlixPartners released a study which forecasts a 25 percent jump in commercial-aircraft deliveries by 2014, driven in large part by increasing air-traffic demand globally.

At the same time, however, the defense sector will be focused on affordability.

What will these contradictory challenges mean to supply chains? David Fitzpatrick, managing director at AlixPartners and co-leader of the firm’s Global Aerospace and Defense Practice, anticipates a bumpy ride.

“While bruised, the aerospace and defense industry emerged from the economic downturn in better shape than most industries, due largely to increased demand in the defense sector, plus some pretty vigilant cost-cutting overall,” he said. “However, the industry now faces the ‘big squeeze’ – the contradictory challenge of quickly ramping up production for expected growth in the commercial sector coupled with the need to address expected cuts and therefore a sharpened focus on affordability in the defense sector.  And those squeezed the most will be the supply chain.”

More specifically, the AlixPartners study predicts that global aircraft production is expected to increase 30 percent to 50 percent over the next three years. However, original-equipment manufacturers (OEMs) will face several challenges as they ramp up to meet this demand.  For instance, OEMS will need to: (more…)

Analysts are predicting that tin prices are going to increase over the next few years, possibly rising to as much as $40,000 per ton.

According to a new market research report from Merchant Research & Consulting, Ltd., the global tin supply will remain tight through 2013, due in large part to insufficient mining capabilities. “Tin Market Review” concludes that consumption in major users continues to grow although supply remains constrained after decades of lack of investment in new mines.

For now, high tin prices have stimulated a limited supply response, mostly from small-scale miners in Indonesia and recycling activity in China.

New mines are expected to come on-line within the next few years. A new facility in Argentina will produce tin as a by-product of silver, and another mine in Kazakhstan is scheduled to open in 2012.

Merchant Research & Consulting, Ltd. forecasts that production from these additional mines will start to ease global tin tightness by around 2013. (more…)

In a hearing held by the US House Subcommittee on Energy and Mineral Resources last week, a variety of mining industry stakeholders voiced their concerns about American dependence on foreign mineral imports and emphasized the need for a comprehensive US minerals policy that improves the regulatory approval processes for domestic resources development.

“Without increased domestic exploration, significant declines in US mineral production are unavoidable as present reserves are exhausted. We will continue to ship American jobs overseas and forfeit our economic competitiveness unless we take steps to develop our own mineral resources,” said Subcommittee on Energy and Mineral Resources Chairman Doug Lamborn (CO-05). “Developing our Nation’s mineral resources is not only an integral part of an all-of-the-above energy plan but it will create long-term family wage jobs, stimulate our economy and reduce our foreign dependence on mineral resources.”

The US Geological Survey’s (USGS) Mineral Commodity Summaries, released earlier this year, reports the US is completely (100 percent) dependent on foreign sources for rare earth elements (REE), 97 percent of which are provided by China.

However, in 2010, the USGS released a report revealing 13 million metric tons of REEs exist within known deposits in 14 US states. According to the House Subcommittee, the Obama administration is not doing enough to facilitate utilization of these domestic resources.
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