Tradewinds: July 2011

July 19, 2011
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Gartner Announces Supply Chain Top 25

Apple keeps No. 1 spot

Results of Gartner’s seventh annual Supply Chain Top 25, which raises awareness of the supply chain discipline and how it impacts business, finds Apple on top for the fourth year in a row.

According to Debra Hofman, research vice president at Gartner: “Four key themes emerged this year among the leaders, including how they deal with volatility, their approaches to value chain network integration, their focus on sustainable execution, and their abilities to orchestrate.”

Gartner analysts noted that among the trends they’ve seen in recent years is a move from the notion of “supply chain” to “value chain” and a concomitant increase in the span of control of the supply chain organization.

“The old image of a supply chain organization limited to either inbound materials management or logistics, with procurement, planning, manufacturing, and customer service as totally separate functions, is fading,” Hofman pointed out. “What’s replacing it is a supply chain organization, often reporting at the board level, that includes the functions of plan, source, make and deliver. It also increasingly includes functions such as customer service and new product launch, and links them through the cross-functional processes and roles that are so critical to being demand-driven. The consumer-oriented companies, with their need to renew product lines constantly and their appetite for downstream data, have led the way in this change, which may at least partially explain the steady drift away from industrial companies making the list.”

Controversial Truck Plan Moves Forward

EU allows charges for air pollution and noise

Last month, the European Parliament voted to allow individual EU governments charge trucks for air pollution and noise—a controversial plan that may prompt a shift in cargo from road to rail.

The charges will be included in truck tolls, which could rise 12 to 27 percent.

European lawmakers said the plan would reduce harmful emissions and costly delays on highways.

Road transport is responsible for 75 percent of nitrous-oxide discharges from transport and the cost of traffic jams amounts to about 1.1 percent of the EU economy, according to the European Commission. Trucks create about a quarter of these effects, says the commission, which proposed the legislation in July 2008.

China Backs Down on Clean Tech Subsidies

Several hundred million dollars at stake

The U.S. is claiming victory on its latest effort to prevent China from subsidizing its clean tech sector.

In June, U.S. Trade Representative Ron Kirk announced that the WTO had agreed with the U.S. that grants provided by the Chinese government to wind turbine manufacturers that used key components made in China were not in compliance with global trade rules.

The U.S. estimates that the grants provided since 2008 could have totaled several hundred million dollars.

Both the U.S. and China regard clean energy as a growth sector with large export potential because of high oil prices and concern over limited global supplies of fossil fuels.

Ford Announces $1 Billion Investment in Spain

Other European plants to benefit too

Ford is making massive investments in its European automotive plants, including a $1 billion investment in Spain that marks the company’s biggest investment in that country in 35 years.

The U.S. automaker will also create new jobs at two German sites as part of a plan that will see subcompact cars manufactured in Cologne, Germany and Romania and compact cars built in Saarlouis, Germany and Spain.

Spain has much to gain from the move, considering it has the highest rate of unemployment in the euro zone at 21.3 percent, more than twice the European Union average.

U.S. Launches New Program

SelectUSA to spur foreign investment

The U.S. government has launched a new program, SelectUSA (, that aims to highlight the advantages of doing business in the U.S., whether for American-based firms or foreign companies.

According to U.S. Commerce Secretary Gary Locke, the goal is to “encourage foreign businesses to operate in the United States, ask U.S. and foreign businesses to expand and grow in the United States, and help U.S. businesses operating outside our borders to return their previously off-shored operations back to the United States.”

Both domestic businesses and U.S. subsidiaries of foreign firms play an important role in the U.S. economy, the Commerce Department explained. U.S. subsidiaries of foreign firms support over 5 million jobs--accounting for over 10% of U.S. private-sector capital investment--nearly 15% of annual research and development expenditures, and nearly 20% of U.S. exports.

The SelectUSA site offers a searchable guide of federal programs and services available to businesses operating in the United States—including grants, loans, loan guarantees, and tax incentives; industry snapshots that describe the competitive landscape; and a catalogue on “Why to Select the USA?” that explains the advantages of operating a business in the United States. In addition, the site offers a clickable map of the United States to direct visitors to individual states’ economic development agencies—their principal partners in the site selection process. 

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