For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts about particular commodity markets. From price movements to policy decisions, we scour the landscape for what matters this week.
For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts about particular commodity markets. From price movements to policy decisions, we scour the landscape for what matters this week.
KKR’s David McNellis, the head of research for KKR’s Global Macro and Asset Allocation Team, shares his views on the macro economy, with a forecast for a downturn in the U.S. and other countries. Of note to procurement professionals are McNellis' view on inflation and commodities outlooks, as well as the top four risks that businesses need to prepare for heading into 2020.
Spend Matters welcomes this guest post from Naseem Malik, managing partner at TYGES International.
Life should be good for procurement professionals these days, if conventional wisdom is to be believed. Companies are hiring, spending and facing growth-related opportunities/challenges not seen in almost two decades. There’s renewed confidence with the business-friendly policies, and there’s a sense that a 4% GDP growth can be the new normal for the U.S. economy. But reality is not quite as rosy. From vitriolic trade negotiations to overnight tariffs, sanctions and currency fluctuations, companies are facing levels of volatility not seen in decades.
China Labor Watch released a lengthy report Tuesday detailing appalling work conditions at Catcher Technology, a supplier of computers, digital cameras and other products to Apple, Dell, HP, IBM and Sony. The factory under investigation, however, is primarily an Apple supplier, producing iPhone frames and MacBook components. Among many other labor violations, China Labor Watch found toxic gas poisoning, unsanitary food, inadequate protective gear and excessive pollution during its investigation of the Catcher factory in Suqian, China, conducted from October 2017 to January 2018.
Luckily, as a consumer mainly buying Echos or pairs of Christmas socks, the answer is not much. (Or at least, the passalong effects should be negligible.)
However, if you're a U.S. buying organization with a domestic manufacturing footprint, international supplier base, and significant steel or aluminum spend, the answer might indeed surprise you — depending what happens in the trade policy arena over the next several months.
Our sister site MetalMiner recently launched a new podcast series called "Manufacturing Trade Policy Confidential." Procurement organizations with a domestic manufacturing footprint and global supplier networks — especially those with a significant steel or aluminum spend — take note. (If you'd rather bone up on some trade policy intelligence for work rather than half-focus on your latest James Patterson on the plane to visit your in-laws, you're welcome.) The latest episode takes listeners through China's recent setback at the hands of the U.S. Department of Commerce regarding China's non-market economy status, and which other trade cases and investigations matter in the current political and economic landscape and why.
Just in case you missed it…
Last December, we presented ways to innovate AP and AR, and Spend Matters Founder Jason Busch had a conversation with SAP Ariba President Alex Atzberger on Chinese trade and economy.
Spend Matters welcomes this guest post from H. Cole Hassay, economist at IHS.
China is finally escaping a persistent deflationary environment as price levels rise. However, inflation rates will not be increasing.
Producer prices in China rose at their fastest pace in five years in December, increasing by 5.5% year-on-year. This follows a 3.3% year-on-year increase in November. Price increases in upstream sectors, particularly in coal, steel and oil, were the main drivers in the price uptick. However, increases were seen across several industries, indicating that the rise in inflation was broadly based.
Have you noticed prices from your Chinese suppliers increasing in the last month and a half or have you been living in a cave? Is there anything you can do to stop these increases from impacting your bottom line as much? If you read us, the answer is yes (about the prices, not the cave). While many of these costs go to a supplier’s bottom line, being an educated buyer can stop you from having them passed directly to yours.
In the first part of this Spend Matters Conversation, Founder and Head of Strategy Jason Busch talked with SAP Ariba President Alex Atzberger about how Chinese trade policy has evolved in recent years and where it may be going. This second installment explores opportunities in light of China’s evolving economy, as well as potential for innovation. Those interested in the topic of China's ascent in the world economy, trade policies and market economy status (MES) should also look at our dedicated multimedia site on the topic.
Spend Matters welcomes this guest post from Gareth Bowen, head of SAP Greater China.
For centuries, China has been the largest manufacturer in the world. And it has led the way in developing innovative processes that have fundamentally transformed production and supply chains. But China is changing. And a new lexicon may be in order: Digitized in China.