Supply Chain weekly wrap-up: 6/14 – 6/20

Could supply chain issues stall growth in the automotive industry?

The automotive sector has had a bumpy ride over the last few years as the boom-and-bust nature of the industry fueled a full scale crisis. In a desperate attempt to survive this period, parts suppliers slashed production. In total, output was down by as much as 30% compared to before the crisis. Although the demand has now picked up, it seems the industry has driven straight into yet another critical situation.

According to an article this week, there is growing concern over automotive supply chain bottle necks, especially with regard to the availability of parts. As demand for new cars crashed in 2008, many factories were forced to close and businesses made wide-scale lay-offs. As a result, the industry is struggling to meet the recent boom in demand. Given that an extra 2 million units will be required by 2018 to satisfy demand and over 600 new models are expected to be launched, many question how automotive suppliers will cope.

For the full story click here.

Are we on the brink of creating the world’s biggest trade agreement?

Breaking news has emerged this week suggesting European and American leaders are set to start negotiating a trans-Atlantic trade deal. If the plan goes ahead, European companies could soon enjoy reduced tariffs and streamlined regulations when trading with US organizations. The agreement could enable EU firms to distribute an extra $250 billion worth of goods and services to US markets.

Although setting up such an agreement seems to have been on the agenda for some time, this will be a tediously delicate debate as not all leaders are convinced of the benefits of free trans-Atlantic trade. According to reports, French leaders have already objected to aspects of the agreement over concerns about protecting their national industries.

Given that the EU and USA economies combined currently account for nearly half of all global gross domestic product, if a trade partnership is formed, the EU and US could become a formidable force in the global economy. As a result, this is definitely a story worth following.

For the full article, click here.

State of logistics

An interesting article has been released this week reviewing the performance of America’s logistics industry during 2012. According to the report preview, 2012 was a very positive period overall, with a number of industries making major developments in the field of logistics. Despite a 3% rise in logistics cost, the report states that US supply chains are now more efficient than ever thanks to a leaner approach to logistics processes and inventory management. In addition, supply chain practices are typically more productive and make better use of available capacity.

However, it is not all good news; despite strives towards efficiency, a new law which regulates the working hours of drivers could leave the trucking sector struggling to meet future demand as the availability of drivers becomes heavily restricted. In addition, stormy seas have been forecasted for the ocean carrier sector which has been plagued by overcapacity throughout 2012.

The full report is expected to be released next month, but to read the preview click here.

Have a nice weekend!