I wonder, with the situation right now in Europe, how the the rest of the year will shape up.
@Bolaji, already the weakness in the europe is pushing the oil prices lower. If this trend continues oil will soon reach 80$ which will help push the transportation cost lower.
Waqas, for the last several years the economic and financial sectors are in a self reform state. Now it’s moving towards the growth phase and for growth it requires further investments. If investments are happens, then more job opportunities may create as a part of expansion and in turn a better return for the investment.
"88 percent of members plan to make the same or higher capital investments in 2012 than in 2011. More than half (56 percent) plan to increase staffing and 72 expects their revenue to increase"
Barbara, I think this is a very positive sign for the economic system. After recession and slow down phase, now economic systems are showing the growth phase. So this type of optimistic thinking of companies and investors can further accelerate the financial positions.
With costing worries in the manufacturing and purchasing circle, optimism in the economy may well mean that consumer-side buying may increase. If consumer-side buying increases, the lesser profit margins (due to higher costs) may well be covered by increased revenue. Also, efficiency improvement in process may afterall cover a lot of impact of cost increases.
Investment in IT and recruitment reflect the confidence buying entities have in the economic situation. With target cost controlling as a result of increasing efficiency in processes, right kind of investment in IT and human resources may help achieve that.
@Barbara: Great to see the positive change in the hiring trend. What do you think is the reason behind this? Are buyers looking to expand their operations and need more resources for it? Or, is because they had layoffs earlier on and now want to bring the headcount back to normal?
@Bolaji: Because of the hike in fuel prices, I think the logistics cost will be severly impacted. I believe this is the primary reason why many companies are forecasting their raw material prices to go up.
Thanks for that clarification. You are right in that so many things derived from crude oil and used in the electronics industry have been subject to crazy price swings in recent months. I am also now thinking of transportation (logistics) costs for many of these companies. Negotiating long-term agreements in this area too must be difficult for the service providers and the companies involved. I wonder, with the situation right now in Europe, how the the rest of the year will shape up.
Hi Bolaji--actually, for these buyers, it is more than just components: they source things like steel (encasings); plastics (ditto); and a lot of things that are based on petroleum and oil. So, while components have been stable, there are a lot of heavy materials that have been subjected to peaks and valleys over the past few years.
Barb, This has been one of the longest-running period of generally low pricing in the history of the electronics components market. Even following the Japan earthquake last year and the Thai flooding, pricing didn't really get seriously out of hands. I can understand therefore that many in the purchasing community are more concerned about processes rather than about pricing.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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