OEM Insights ~ August 28

Supply Dynamics’ OEM Insights

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Take a look at this week's roundup of the most current and compelling industry news, updates, and trends related to OEMs and anything that impacts them. Read on to discover the latest in:

1. Industry News: Procurement Transformation Can Cut Operational Costs by 45%
2. Trade War: Trump’s Drive for Rare Earths Opens Doors for New U.S. Mines
3. Metal Trends & Market Analysis: Copper Nears Multi-Year Low 

Industry News

• Hackett Group—Procurement Transformation Cuts Cost by 45%: According to a recent report from The Hackett Group, procurement organizations can reduce operational costs by up to 45% via the deployment of digital tools, achieving efficiency levels below those of today’s world-class procurement organizations while also enabling them to improve effectiveness and customer experience. (Supply Chain Digital)

• IHS Markit U.S. Manufacturing PMI™: The seasonally adjusted IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ registered 49.9 in August, down from 50.4 in July and below the neutral 50.0 threshold for the first time since September 2009. The decline in the headline PMI mainly reflected a much weaker contribution from new orders, which offset a stabilization in employment and fractionally faster output growth. (IHS Markit)

Trade War & Global Relations 

• Trump’s Drive for Rare Earths Opens Doors for New U.S. Mines: Trump’s directive to boost domestic production of magnets for military equipment to cut the U.S.’s heavy reliance on Chinese rare earths and magnets amid the protracted U.S.-China trade war has opened the door for U.S. mining projects seeking funding. The move could spur the re-establishment of an integrated supply chain for the extraction and processing of rare earth metals and their utilization to make magnets used not only in fighter jets and tanks but also electric vehicles, wind turbines, and many smart electronic gadgets. (South China Morning Post)  
• Powerful, Obscure Law Is Basis for Trump "Order" on Trade: After China announced on Friday (8/23) that it was raising tariffs on $75 billion in U.S. imports, Trump fired off a Tweet ordering American companies "to immediately start looking for an alternative to China." Trump later clarified that he was threatening to make use of the International Emergency Economic Powers Act. Trump's directive raised questions about the wisdom and propriety of The 1977 act, used to target rogue regimes, terrorists, and drug traffickers, as the newest weapon in the clash between the world's two largest economies. (New York Times) 

Metal Trends & Market Analysis

• Copper Nears Multiyear Low as Economic Worries Grow: Though copper prices steadied on Tuesday (8/27), the price of the red metal fell last Thursday (8/22), putting it within striking distance of a fresh multiyear low as weak U.S. manufacturing data bolstered concern over the health of the global economy. (WSJ)

• Steel Imports Down 11 Percent Year-to-Date through July: Through the first seven months of 2019, total and finished steel imports are 18,666,000 and 13,536,000 net tons (NT), down 10.6% and 16.4%, respectively, vs. the same period in 2018. (AISI)

About Supply Dynamics

Supply Dynamics provides leading Fortune 500 manufacturers with real-time visibility and control over the “material-input” requirements (metals, plastics, electronics, etc.) of their extended supply chain. Our innovative supply chain analytics solutions allow our customers to reduce the cost of raw materials and component parts that go into their products, enhance collaboration with supply chain stakeholders, and ensure that the timely purchase and supply of material-inputs is never the reason a part is late. To learn more, visit www.supplydynamics.com.