Daily Archives: November 9, 2009

Buick: Designed, Made, and Sold in China

Here are a couple of eye openers from a New York Times article:

For the first nine months of 2009, for instance, Buick sold 312,798 vehicles in China; in the United States, it sold 72,389.

— and —

The idea of creating a new Buick in a design studio in China, as General Motors has done with the 2010 LaCrosse, is not as loopy as it might sound. Buicks have a certain cachet in China, dating back some eight decades to when the emperor bought one.

So, there are 1.346 billion Chinese. They like Buicks, they design Buicks, and they build them too.

Do you have the feeling US efforts to keep our economy moving are misguided in the long term? Our government messes around protecting manufacturers of steel pipe while the higher value-add, higher technology, higher skilled jobs are slipping away. Anyone for education?

Oh, and the car looks good.

New and Upcoming Events from the #1 Supply Chain Resource Site

The Sourcing Innovation Resource Site, always immediately accessible from the link under the “Free Resources” section of the sidebar, continues to add new content on a weekly, and often daily, basis — and it will continue to do so.

The following is a short selection of upcoming webinars and events that you might want to check out in the coming weeks:

Date & Time Webcast
2009-Nov-9

14:00 GMT-05:00/CDT/EST

What You Need to Know BEFORE You Close: Tips and Tricks for a Stress-free Month/Year End Close
Sponsor: Infor
2009-Nov-10

11:30 GMT-05:00/CDT/EST

Supply Chain in the Cloud — A User Perspective on the Advantages of Hosted Applications
Sponsor: Red Prairie
2009-Nov-10

11:00 GMT-08:00/AKDT/PST

Optimizing Spend Management Strategies to Successfully Address Marketing Print
Sponsor: Ariba
2009-Nov-10

13:00 GMT-05:00/CDT/EST

Use Business Intelligence to Transform your Services Procurement Program
Sponsor: Fieldglass
2009-Nov-11

11:00 GMT-05:00/CDT/EST

Auditing Beyond Compliance
Sponsor: Pilgrim Software
2009-Nov-11

11:30 GMT-05:00/CDT/EST

Effective S&OP for Combating Risk and Volatility
Sponsor: IBM
2009-Nov-11

9:00 GMT-05:00/CDT/EST

Multisourcing Today: Techniques for Optimizing Cost Containment and Performance Management
Sponsor: Gartner
2009-Nov-11

14:00 GMT-05:00/CDT/EST

Are You Delivering the Right Messages to Your Customers?
Sponsor: Infor
2009-Nov-11

14:00 GMT-05:00/CDT/EST

How successful companies maximize their inventory data and streamline storeroom processes
Sponsor: Infor
2009-Nov-12

1:00 GMT-04:00/AST/EDT

Expand Your Contingent Workforce Program for Greater Cost Savings
Sponsor: Fieldglass
2009-Nov-12

15:00 GMT/WET

Driving Transformation in Your Financial Shared Services Organization
Sponsor: Shared Services Outsourcing Network
2009-Nov-12

10:00 GMT-08:00/AKDT/PST

The Business Execution Revolution
Sponsor: Success Factors
2009-Nov-12

14:00 GMT-05:00/CDT/EST

The Bottom Line on Asset Availability
Sponsor: IBM
2009-Nov-12

11:00 GMT-08:00/AKDT/PST

Generate Working Capital: Services Industry
Sponsor: Receivables Exchange
2009-Nov-12

14:00 GMT-05:00/CDT/EST

Consumer Goods Technology Webcast: Winning at the shelf with PLM
Sponsor: Infor
2009-Nov-12

11:30 GMT-05:00/CDT/EST

Order Capture and Fulfillment Best Practices – Setting the Stage for Growth
Sponsor: Sterling Commerce
2009-Nov-12

14:00 GMT-05:00/CDT/EST

Best Practices in Supply Chain Execution: AMR’s Insight, SAP’s Vision and Sony’s Innovation
Sponsor: Industry Week
2009-Nov-13

12:00 GMT-05:00/CDT/EST

Engaging in a Lean Transformation Through Product Development
Sponsor: Society of Manufacturing Engineers

Dates Conference Sponsor
2009-Dec-4 to
2009-Dec-4
Ariba Spend Management Day
Geneva, Switzerland (Europe)
Ariba
2009-Dec-10 to
2009-Dec-12
Conference of Hong Kong Society for Transportation Studies
Hong Kong (Asia)
Hong Kong Society for Transportation Studies
2010-Jan-10 to
2010-Jan-13
NRF 99th Annual Convention & Expo
New York, New York, USA (North-America)
NRF
2010-Jan-12 to
2010-Jan-12
Negotiating in Tough Times: Navigating Challenging Negotiations During an Economic Downturn
Minneapolis, Minnesota, USA (North-America)
Corpoate United

They are all readily searchable from the comprehensive Site-Search page. So don’t forget to review the resource site on a weekly basis. You just might find what you didn’t even know you were looking for!

And continue to keep a sharp eye out for new additions!

Drew Hofler on “Supplier Liquidity Options when Credit is Still Frozen” (Part I)

Today’s guest post is from Drew Hofler of Ariba (Working Capital Solutions).

The last couple of weeks have really driven home how important cash flow and access to credit is for suppliers right now. They have also served to illustrate the credit dichotomy between large, cash-rich, investment grade companies and their mid-sized & smaller suppliers in the current economic environment.On the one hand, economic indicators are beginning to show that the economy is stabilizing and that the recession may officially be over (e.g. a recent article in the WSJ reporting that GDP grew by 3.5% in the 3rd quarter). On the other hand, it is clear that short-term credit and cash flow, the life blood of most suppliers, is still severely squeezed.

Over the last two weeks, I have had the opportunity to speak to CFOs, Treasurers and COO’s of many small and medium sized suppliers, as well as representatives of many larger companies. And what they are telling me is that while large companies are having no trouble accessing credit right now, the medium and smaller companies are still finding short-term credit very difficult to come by and it is very expensive, or laden with restrictive covenants, when it is available.

Recent headlines back up this anecdotal evidence and continue to paint a clear picture of the gulf between the haves and have-nots in this economic environment. Large companies that have survived this crisis appear to be well positioned for future growth as they have stockpiled cash at record rates. According to another WSJ article, the largest 500 non-financial firms in the US held about $994 Billion in cash and short term liquidity investments … representing the greatest percentage of cash assets in the past 40 years. According to Carsten Stendevad of Citigroup, “Everyone is hoarding cash“. Well, maybe everyone who is fortunate enough to be able to, and therein lies the problem.

For those companies not in this august group, the picture is a little grimmer. Small and medium sized suppliers in every industry have seen their credit lines cut, their access to cash curtailed over the past year and a half, and the flow has not freed up significantly since then. Add to that last week’s not so surprising news of CIT filing for bankruptcy and suppliers’ options become fewer still. (CIT, who provides over $60 Billion in cash flow to over one million suppliers, is the largest provider of short-term credit and receivables financing to small and medium sized business). Rick Patterson, a partner with private-equity firm Spire Capital, sums it up best: “Everybody is looking for alternatives. Capital is much less fluid in these smaller markets than in the bigger ones. The financial crisis has trimmed the number of potential lenders to small companies by more than half, and that will hurt businesses that rely on a cycle of ‘repaying and re-borrowing’ to stay alive“.

While suppliers are finding it difficult to access short term cash flow through traditional markets, they do have options and there are alternatives that are becoming more and more popular with both Buyers and Suppliers to reduce supply chain risk and inject liquidity into the supply chain.

Supplier options really fall into two categories; collaboration/cooperation with their buyers OR working independently to create liquidity.

The first set of options require a close working relationship between buyers and suppliers and the latter requires a supplier to look at new ways to monetize their greatest assets in this economy, their receivables.

In part II, we will explore these options in detail.

Thanks, Drew!

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