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Are You Ready for a Busy 2012

By Herb Shields | 11/23/2011 | 9:44 AM

When I read or listen to the news, I am often reminded of the old adage:  “Bad News Sells.”  This “good news” post suggests that the challenge for supply chain professionals in 2012 will be based more on upside risk than downside.  I had the good fortune recently to attend an economic forecast presentation by Brian Beaulieu of the Institute for Trend Research.  Brian’s firm does economic research and he and his brother Alan are frequent speakers to many business groups.  Here’s the 20,000 foot view of 2012 from Brian’s perspective:

  • In spite of the news as reported by the media, the data is positive, both GDP and Industrial Production indices are up in 2011 versus the same periods in 2010.
  • Employment is rising, (many mid-size companies that I talk to are hiring)
  • The Purchasing Manager’s index published by the Institute of Supply Management continues to show that the economy is growing.
  • There is a stimulative monetary policy and companies have liquidity.
  • Exports are increasing.

From a supply chain perspective, Brian made these recommendations:

  • Check your distribution system for readiness to handle increased activity.
  • Build inventory where appropriate considering lead time and turnover
  • Introduce new product lines
  • Implement more training for employees.

More positive news:  Material Handling and Logistics News just published some very encouraging transportation numbers based on a summary from the Georgia Center of Innovation for Logistics.  Here are just a few:

The Dow Jones Transportation index was up 6.9% during the month of October and the NASDAQ Transportation Index was up 2.3% for the same period. The USDOT's freight transportation services index increased 0.9% in September 2011 from the previous month. The index’s reading of 109.6 was the highest reading since July 2008. The index is up 4.4% year-over-year.

In September, the U.S. exported more than $180.4 billion of cargo (the highest on record). September U.S. exports have increased 1.4% in terms of value over the previous month and grew 15.9% year-over-year.

I don’t mean to discount the challenges that many companies still face.  Some specific industries  are recovering more slowly – i.e. housing and construction, but consumer products should continue to produce positive growth through 2012.  I would add one suggestion to Brian’s list – focus on building collaborative relationships with suppliers and customers in 2012.

Happy Thanksgiving.

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About Herb Shields

Herb Shields

Herb Shields has run Chicago-based HCS Consulting since 2000, helping clients across multiple industries and in higher education improve their supply chain strategy and execution. Shields has more than 30 years as an operations executive for capital equipment, automotive, electrical machinery and consumer products companies. As vice president of materials management at consumer goods company Helene Curtis, Shields led the supply chain organization that helped Helene Curtis win "Vendor of the Year" awards from Wal-Mart Stores and Target Corp. Shields has a B.S. degree in Electrical Engineering from Clarkson University and did graduate work in business at Bowling Green State University.


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