Supply Chain Matters alerts subscribed and general readers that our Q2-2018 Quarterly Newsletter published on Tuesday. Registered blog subscribers and clients will find notification and links to the Q2 Newsletter in respective email inboxes.
The past quarter remained incredibly busy as well as challenging for industry supply chain teams, with global trade and tariff developments and high levels of uncertainty and likely unplanned costs occupying much of multi-industry supply chain developments.
Global Supply Chain Activity Levels
Global manufacturing and supply chain activity again declined from prior levels of momentum reflecting some initial signs of trade and tariff induced slowdown. Multi-industry supply chains are increasingly being tested on their ability to respond to either product demand or global supply chain developments adding unplanned costs and added risks.
Developed Economies, the prime engine of prior growth generally experienced a continued slowdown in momentum during Q2 while the Developing Regions we track were holding steady, but generally experiencing flat activity. Compiling the regional geographic numbers, we observed that of the four major Developed regions that we monitor (United States, Eurozone, Japan, Taiwan) all reflected reduced activity levels in Q2-2018. The fastest growing region by the end of June was the United States while the lowest performing region was that of the Eurozone.
Our overall tracking of Emerging Regions indices at the end of Q2-2018, reflected a steadier picture that that of the developed regions that we monitor. Among the five Developing regions we track (China, India, Indonesia, Mexico, Vietnam) the average PMI rating of Q2 was a mere 0.2 percentage points higher than that of Q1. The fastest growing developing region in Q2 was that of Vietnam, while the slowest were China and Indonesia.
A review of Q2 events leaves little doubt that as what occurred in Q1, heightened supply chain risks dominated business and industry supply chain developments.
Once again, the most dominant theme in the quarter was a chronology of non-stop trade and tariff developments that have unquestionably raised multi-industry supply chain uncertainty levels. As our blog readers are likely aware, the pace of developments and/or implications has been so pronounced, the Supply Chain Matters blog is now providing weekly and bi-weekly highlight and insight commentaries related to global tariff developments to keep our readers informed.
A number of specific business and industry supply chains remained under the business media looking glass, including the ongoing manufacturing and supply chain challenges related to electric automaker Tesla and the company’s ramp-up of volume manufacturing.
Commercial aircraft producer Airbus again remain in the business and industry media spotlight having to deal with compounding challenges related to required supply of new aircraft engines. During the quarter, Airbus had more than 100 semi-finished single-aisle aircraft parked on factory adjacent runways waiting for aircraft engine deliveries
Other Q2 Newsletter Highlights
We provided yet another assessment on higher U.S. transportation cost increases that are now impacting various corporate bottom lines. Our stated insight is that businesses, now more than ever, will need to rethink existing strategies for logistics and transportation flows, not to mention the need for the reset of annual cost and budget expectations.
During Q2, our research arm, The Ferrari Consulting and Research Group was busy with the publishing of three industry research advisories with topics on the morphing of supply chain and enterprise business planning, along with our initial research advisories addressing industry-specific efforts in orchestrating and deploying digitally enabled response networks in customer online fulfillment.
As we reach the mid-year point in 2018, we provided our newsletter readers with a revisit of five of our previously published: 2018 Predictions for Industry and Global Supply Chains. That revisit included our predictions related to:
- Industry direct materials procurement
- The supply chain talent perfect storm
- Cyber-risk and information security safeguarding
- Shifting of priorities for supply chain digital transformation, data management and technology-enhanced business relationships.
- Changing global trade policies providing a challenging tactical and strategic landscape for U.S. manufacturers.
Finally, we updated our Newsletter readers with the completion of our web site upgrades involving both research and Supply Chain Matters blog online presence, as well as the appearance of our new business logo.
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Thanks again for your continued readership.
Bob Ferrari, Founder, and Executive Editor
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