The Price Forecast Category

Supply Dynamics: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

manufacturing

Direct materials procurement is similar in some respects to indirect procurement: you want to see your spend, aggregate demand and find opportunities to reshape your value chain to unlock value. But that’s where the similarities end. Analyzing direct spend (especially across multiple tiers of supply) is sometimes like seeing a cloud of smoke coming out of your tailpipe — you know there’s something wrong but don’t know the cause. For indirect spend, you basically change the oil, replace the air filter and hope for the best. But for direct spend, you need specific engine diagnostics to figure out what’s driving performance and how much you could potentially improve. And unfortunately, in many cases, the manufacturers of those engines parts don’t want you poking around under the hood.

Whether it’s for plastics, resins, hydrocarbon feedstocks, agricultural commodities, standard catalogue parts, electronic components or metals, you must translate your demand for parts into the raw materials that go into them. And you must understand the demand volumes, supply chain capacities and processing capabilities that drive that pricing — especially if you want to tap into aggregated buying channels beyond the stuff you buy to support your own internal factory requirements.

This intersection of supply chain modeling, demand forecasting, demand-supply reconciliation, demand aggregation and commodity price forecasting is where Supply Dynamics plays. The idea originated with one of North America’s largest privately owned metals distributors where the opportunity to roll up demand information across OEM customers and their outside contract manufacturers gave it a unique opportunity to build out specific analytics that would help it size up opportunities for its customers and itself. But last year that technology was liberated from its previous owners and is now a commercial offering for any manufacturer or distributor that wants to optimize its own extended supply chain.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help buying organizations make informed decisions about whether they need a solution like Supply Dynamics to expand their analytics initiatives into previously unchartered materials and supply chain components. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Supply Dynamics. The rest of this multipart research brief covers product strengths and weaknesses, competitor and SWOT analyses, user selection guides and insider evaluation and selection considerations.

How to Decide on Organizational Sourcing Structures, Supply Market Intelligence Sources (ICYMI)

category management

Last week, we ran two stories that have come out of our new feature, Ask Spend Matters. The feature asks readers to tell us what they’ve always wondered about procurement and supply chain, and our editors then select questions to pursue and investigate. While our first replies covered the intricacies of tail spend management and the use of big data in public procurement, last week we tackled two questions related to the sourcing side of procurement. Check out what your peers are wondering and be sure to leave us your own question!

Could an Answer to the Multiyear US-Canadian Lumber Trade War Soon be Here?

Spend Matters welcomes this guest post from Verity Michie, market analyst at Mintec.

Following the expiration of the nine-year-long softwood lumber agreement (SLA) in October 2015, the U.S. and Canada have yet to finalize a new trade agreement. But why do they need one?

The Butter Market has Gone Crazy

Spend Matters welcomes this guest post from Nick Peksa, opportunities director at Mintec.

Yes, the butter market has gone crazy. Normally these kind of rapid price movements are reserved for markets like vanilla, crude oil and currency, but not for shopping staples. At the end of May 2016, European butter futures had established a new monthly record for futures traded, with 1,382 butter contracts having been established. This phenomenon is not just confined to Europe; there has been an increased demand globally for all types of fats (people trending toward anti-sugar and organics).

Cashew Nut Prices Soar on Tight Supply

Spend Matters welcomes this guest post from Jara Zicha and Jonathan Stokes, of Mintec. 

A few years back, cashews were very competitively priced, being one of the cheapest tree nuts available on the market. However, prices have soared since the beginning of 2016, currently up 30% year-over-year, at over $11 per kilogram in Vietnam.

Scallop Prices Have Dived due to Large Catches

Spend Matters welcomes this guest post from Jonathan Stokes, analyst at Mintec.

Scallop prices peak seasonally at the start of the year due to declining stocks in line with the end of the fishing season, with prices rising 13% from December to January. U.S. sea scallop prices have, however, fallen 34% since March, due to not only the number of scallops caught by fishing vessels but also the size of the individual scallops.

Slow Running, Cheaper Fueling: London 2017 and Agricultural Commodities

marathon

Spend Matters welcomes this guest post from Nick Peksa, a director at Mintec. 

It’s 8 a.m. and I am waiting for a docklands light railway train, when it arrives a few moments later, with slight apprehension I step on board. The DLR train rapidly fills up with a Lycra clad army, the air is heavy with the scent of wintergreen, menthol and eucalyptus, and there is palpable excitement and nervous tension in the air, as people chatter away. Yes, that’s right, Regain, a fantastic charity that supports tetraplegics in sport, persuaded me to run the London Marathon for them this year.

US Soybean Prices Crash to 5-Month Low

GMO

Spend Matters welcomes this guest post from Jonathan Stokes, an analyst at Mintec.

In recent months, soybean prices have crashed to a five-month low. Previously, prices were edging upward and the sales outlook for American producers had been positive. So why was there this quick reversal in fortune?

Aircraft Prices Taxiing Toward Take Off

Spend Matters welcomes this guest post from Brandon Ruschak, senior economist at IHS Pricing and Purchasing Service.

Aircraft prices are expected to accelerate in the second half of 2017, a turnaround from the weak price growth that has occurred for several years. Low price growth emerged in 2013 due to the retrenchment of key input costs for aircraft manufacturing, but this trend has recently shifted. Rising input cost prices will contribute to the pricing turnaround to occur later in the year. Aluminum prices will move higher over the next two years, putting upward pressure on aircraft prices. Additionally, tightening labor markets are forcing up wages, adding more upward price pressure.

Could This be the End of the High Cotton Prices?

Spend Matters welcomes this guest post from Verity Michie, Market Analyst at Mintec.

Last year in June, we asked whether the cotton price recovery continue? The answer was yes, it did, all throughout 2016 and into 2017. But now the real question we need to ask ourselves is how much longer will the price continue to rise? To answer that question, we must understand why prices rose to almost three-year highs in the first place.

US Coal Prices Up on Increased Demand

Spend Matters welcomes this guest post from Rajiv Joarder, knowledge team leader at Mintec.

Coal prices have been on a steady downward trend since late 2012. But lately, the price of coal in the U.S. has risen by 36% since the beginning of October 2016 and is expected to go up further. So has Donald Trump delivered on his campaign promise to revive the coal industry?

US Cheese Price Bubble Could Be Set To Burst

cheddar

Spend Matters welcomes this guest post from Michael Liberty, market analyst at Mintec.

We last spoke about cheese prices in December, when the USDA purchased stocks of excess cheddar in November to help boost domestic prices, which resulted in a two-year peak in November. Fast-forward three months, and it’s deja vu; however, this time, the global markets are making their mark.