@ Supply Chain Management


Supply Chain : Pros to know

SDCExec.com has published its annual list of Pros to know in its article: 2008 Supply & Demand Chain Executive Pros to Know. An exhaustive list to be sure and it should point you towards personalities as well as up and rising firms that they lead and/or represent.

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Supply Management Talent Crunch

This story is not new but like all truths, it bears repetition – again and again and again…

I came across this story via Supply Excellence, which tagged a story in WSJ (registration required) and Aberdeen (free report available until April 28, 2008 with registration),

The professors from the business and management schools of Florida State and North Carolina State University note that managing the supply chain in the face of globalization, offshoring, and an ailing economy

Warming up to Sustainability

After a month of being deluged at work, I could do with a bit of warming – Will this Winter ever pass? I could do with a little bit of Global Warming right now. I’d settle for Local Warming too. Ahhhh Spring – How sweet thy sound? The title of this post is a little misleading though – I’m not warming up to Sustainability of any sort. I have no idea what it is that I’m supposed to be sustaining to begin with other than some mythical notion of some state of the world prior to the industrial age or the medieval age. Or the dark ages. Or …

For example, I, for one, would contend that it would be impossible to run out of oil as long as it is sold on the open market. Cheap oil? Sure, we could run out of cheap oil – cheap as we knew it once (there is no $10 a barrel oil available anywhere, no $40 a barrel and no $65 a barrel oil to be had). Perhaps one day in the near future, we might have $200 a barrel oil – we would still be pumping gas into our cars, I certainly don’t think that it would be half of what we do right now (assuming nothing else has changed). We’d still be driving. There is one switch that Americans hold when it comes to the price of oil – as one of the major consumers of oil. Threaten to go on a diet, get moody and pessimistic about the world at large, oil speculators fearing a top and the price of oil might just crash.

Here’s something to read from just ten years ago about how oil was viewed: Living with $10 oil

On the other hand it’s equally hard to see a sustained bounce back to $20 a barrel levels. OPEC only accounts for 40%of world production. Total stocks are high. And demand is barely growing.

Also, the temptation among cash-strapped producers to break ranks and start pumping more oil remains strong. It’s worth recalling that OPEC’s 1998 package of cuts achieved only 65% compliance.

So, being prudent, our financial planning continues to be based on the challenging assumption that Brent-based crude oil prices will average around $11 a barrel.

Today’s price of oil is about 10 times what it was less than 10 years ago. Dr. Smith contended then that demand for oil was barely moving then – demand for oil is booming today. Other than the threat of terrorism and political instability in oil producing countries, what accounts for a ten fold increase in oil prices in the face of burgeoning demand? Are we getting to Peak Oil? I think we’re about to find out soon enough. Why? As Dr. Smith points out in the article above, oil companies really didn’t want to make any investments in oil production when the price of oil was low and the profit margins to be had were slim. That is not the case right now – we’re at the threshold of determining the truth about Peak Oil.

On the other hand, did you notice that we’re not driving that much lesser either in the face of a ten fold increase in the price of oil?

Keeping with the notion of Sustainability from the previous threads – Sustainability – Solutions in search of problems and A brief background on sustainability issues, my intention was to delve a little deeper into the issue of Global Warming. I have no idea whether Global Warming is occurring or not – for the time being, let me take the word of scientists that it is happening and furthermore that human beings are causing it as well. So I pose this question to you – If you buy into the notion of global warming, what is the one thing that you should see happening (or will see happening in the years to come)?

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About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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March 2008