GM: Shipments Down Further In February; Off 42% Versus Year Ago

Josh Green | March 30, 2009
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After the announcement that Rick Wagoner is being forced out, the Panjiva team decided to take another look at shipments to GM from their global suppliers.  About 10 days ago, we described the drop in shipments to GM from September of 2007 to January of 2009.  It turns out, from January to February of this year, there was a further 6% drop in shipments to GM.  Compared to February of last year, the number of shipments to GM is off 42%.

Panjiva Analysis of Shipments to GM in February 2009 Shows 6% Drop; 42% Versus Year Ago

Methodological note: though this graph looks much the same as the previous GM graph (i.e., massive drop-off), there is an important difference.  It turns out that we have data on shipments to GM’s Mexican operations, and this time around, we included these shipments in our analysis…  Hence, more shipments across all time periods.

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1 in 3 Buyers Working With Troubled Manufacturers

Josh Green | March 11, 2009
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Last month, we released data that highlighted the impact of the economic downturn on manufacturers around the world.  This month the Panjiva research team focused on U.S. buyers, in order to get a sense of how many are exposed to significant risk by virtue of doing business with troubled manufacturers.

Specifically, we focused on the most active U.S. buyers — those receiving 10 or more shipments in the last year.  It turns out that more than 1 in 3 of these buyers maintains an active relationship with an overseas manufacturer that is on Panjiva’s Watch List (as a result of suffering a 50% decline in volume shipped to U.S. customers during the most recent 3 month period, versus the same period a year ago).

The numbers:

  • 28% of significant manufacturers (those sending 10 or more shipments to U.S. buyers in the last year) are on Panjiva’s Watch List.
  • 38% of significant buyers received a shipment from a Watch List manufacturer within the last three months.
  • 47% of significant buyers received a shipment from a Watch List manufacturer within the last six months.

As we look higher up the food chain, the numbers are even scarier:

UPDATE, 9 AM — I just shared these numbers with a supply chain manager at a major retailer; he responded:

“Interesting.  Seems reasonable though given the number of suppliers I’ve seen go bankrupt recently…the worst part is they never even tell you they are in trouble or gone…they just disappear…”

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World Bank: Global Economy Will Shrink in 09

Josh Green | March 8, 2009
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Pessimistic, if not terribly surprising, 2009 predictions from the World Bank:

  • Global economy will shrink for first time since World War II
  • Global trade will shrink for the first time since 1982

If 2009 turns out the way that the World Bank predicts, it will be the year which illustrates both the success and failure of 20th century globalization.  The success was in stitching the world’s economies together, so that a rising tide would lift all boats.  The failure was either of imagination of or of will.  Either we couldn’t conceive that all boats might sink at once — or we couldn’t muster the political will to create a mechanism for effectively responding to a global economic meltdown.  Politicians will likely claim it was the former, but I think it was the latter.

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IBM on Supply Chain Issues

Josh Green | March 4, 2009
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Thanks to Cody for flagging this item from Supply Chain Digest.  IBM has released a report on the issues that supply chain executives are most worried about.  At the top of the list: supply chain visibility.  Second on the list: supply chain risk.

Apparently, this is consistent with what the team at Supply Chain Digest has been hearing.  And it’s totally consistent with what we’ve been hearing from our customers.

For more from IBM, consider taking a trip to Brussels.

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The Economist on “The Collapse of Manufacturing”

Josh Green | February 24, 2009
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Very interesting piece by The Economist on “The Collapse of Manufacturing.”  It lays out the argument against government intervention to support failing manufacturers.  The core macroeconomic point is right: “sectoral aid does not address the underlying cause of the crisis—a fall in demand, not just for manufactured goods, but for everything.”

However, I think the piece understates the risk that the widespread disappearance of manufacturers will further diminish aggregate demand.  As factories disappear, workers lose their jobs and companies that depend on these factories go out of business — so even more workers lose their jobs.  This growth in unemployment puts a damper on demand, further reinforcing the global economy’s downward spiral.

Nevertheless, there’s only so much recovery money to go around, and The Economist is probably right that there are better ways to spend this money than on failing manufacturers.  That, of course, doesn’t provide much comfort to those who depend on manufacturers for jobs or for supplies.

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Panjiva In The News

Josh Green | February 20, 2009
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It’s been a busy few weeks at Panjiva.  We launched coverage of all industries, released new data showing the effect of the economic downturn on the global supply chain, and began working with a great new customer — The Home Depot®.  Thought I’d share some snippets from the press coverage we’ve received:


Financial Times
“Josh Green, chief executive of Panjiva, said the number of Chinese suppliers shipping to US customers in December was 10 per cent lower than in December 2007.”
http://www.ft.com/cms/s/0/fbc46330-f612-11dd-a9ed-0000779fd2ac.html

CNN Money
“The second dimension of the merchandise problem could affect product availability in stores, said Josh Green, CEO of Panjiva, a firm that advises leading U.S. retailers such as Home Depot on supply chain risks.”
http://money.cnn.com/2009/02/13/news/economy/retail_merchandiseissues/index.htm?postversion=2009021314

Forbes
“[W]e took a look at the suppliers that were still active as of the end of 2008…  [C]ompanies [that] suffered a 50% or greater decline in the volume shipped to their American customers.. are on Panjiva’s Watch List, as they are in the greatest danger of going under.”
http://www.forbes.com/2009/02/12/panjiva-global-trade-opinions-contributors_0212_josh_green.html




Fast Company
“Panjiva is not just innovative, it’s revolutionary.”
http://www.fastcompany.com/magazine/133/a-morningstar-for-manufacturing.html

Supply Chain Management Review Cover Image

Supply Chain Management Review
“However, there’s good news for supply chain managers who are willing to confront risk head-on. While risk can never be eliminated, it can be significantly reduced through the intelligent application of information.”
http://www.scmr.com/article/CA6635446.html

AP Associated Press

AP
“Green said of the firms he tracks, the number of global suppliers shipping to the U.S. dropped 13 percent in December compared with October 2007.”
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20090203&id=9575003

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MetalMiner
“And sleuthing for answers has become a whole lot easier. Companies such as Panjiva provide tools which allow companies to identify overseas shippers, products and destinations.”
http://agmetalminer.com/2009/02/17/identifying-supply-risk-in-toxic-stainless-supply-chains/

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Toy Suppliers Disappearing?

Josh Green | February 10, 2009
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On Monday, Bloomberg reported that lots of Chinese toy suppliers went out of business in 2008.  Not surprising, given the various product safety incidents of the last few years, as well as the general economic downturn.  The real question is, what lies ahead  for toy suppliers, and the companies that work with them?

To answer this question, the Panjiva research team took a look at shipments whose commodity description included the word “toys.”

  • From October of 2007 to October of 2008, we saw a 10% decline in the number of companies sending “toys” shipments to American customers.
  • From November of 2007 to November of 2008, we saw a 13% decline in the number of companies sending “toys” shipments to American customers.
  • From December of 2007 to December of 2008, we saw a 25% decline in the number of companies sending “toys” shipments to American customers.

Obviously, this is not an encouraging trend.  In the months ahead, we’ll be keeping an eye on those companies that are still active.

In the meantime, if you want to browse through the 13,000+ companies that have shipped toys to the United States, check out Panjiva’s search results for “toys.”

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Chinese Factories Have “Deferred Reopening”

Josh Green | February 6, 2009
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In today’s New York Times, there’s an interesting article by Keith Bradsher about workers in China that are struggling to find jobs as exports falter.  Citing information from an industry association, Bradsher writes that “many plants have deferred reopening for up to three weeks for lack of orders from the United States and Europe.”

Will “deferred reopenings” turn into permanent closures?  We’ll see in the months ahead.  In the meantime, the Panjiva research team took a look at how Chinese factories fared through the end of 2008.

  • From December of 2007 to December of 2008, we found that there was a 10% decline in the number of Chinese companies (Hong Kong and Mainland) shipping to American customers.
  • From November of 2008 to December of 2008, in just a single month, there was a 6% decline in the number of Chinese companies shipping to American customers.

My hunch is that the worst is yet to come.

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Toyota, a Global Trade Success Story

Josh Green | December 23, 2008
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Toyota made headlines today by announcing its first loss in 70 years.  Check out the New York Times and Wall Street Journal stories.

Certainly this is a remarkable story that demonstrates just how pervasive the effects of the economic downturn really are.  But this story reminded me of the brighter side of global trade.  Global trade, at its best, can enable people to climb the ladder of economic development.  The story usually goes something like this…  People connect with the global marketplace by producing low value goods.  They then accumulate skills that enable them to produce higher value goods.

Indeed, this is the story of Toyota which, about 70 years ago, spun off from Toyoda Automatic Loom Works.  It never ceases to amaze me that Toyota began as a textile company.

Certainly, yesterday was a tough day for Toyota.  But the company itself is a remarkable success story that highlights the possibilities of global trade.

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Panjiva In The News

Josh Green | December 15, 2008
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A week ago, Panjiva released data showing that the economic downturn is decimating suppliers around the world, and we introduced new tools to help companies cope with the associated risk.  We appreciate the interest so many people have shown (see links to some of the coverage below).  We’ll be back with much more in Q1.  In the meantime, stay tuned for guest posts from a member of Panjiva’s technical advisory board.

Financial Times:

http://www.ft.com/cms/s/o/30c89a2e-c620-11dd-a741-000077bo7658.html

New York Times:

http://www.nytimes.com/external/gigaom/2008/12/08/08gigaom-panjiva-31244.html

Wall Street Journal:

http://blogs.wsj.com/runway/2008/12/08/the-daily-thread-abercrombies-sales-down-luxury-brands-modify-focus-uk-retail-sales-expected-to-drop/

CNN/Fortune:

http://money.cnn.com/news/newsfeeds/gigaom/startups/2008_12_08_panjiva.html

Forbes:

http://www.forbes.com/global/2008/1222/007.html

Gartner:

http://blogs.gartner.com/andrew_white/2008/12/10/%E2%80%9Cthere-is-information-gold-in-them-there-data-hills%E2%80%9D/

ARC Advisory Group:

http://www.arcweb.com/Domains/SCM/Lists/Posts/Post.aspx?List=7ae600da%2D7f89%2D41bb%2D8e5d%2D9838766ca24a&ID=154&RootFolder=%2FDomains%2FSCM%2FLists%2FPosts

About.com:

http://logistics.about.com/b/2008/12/05/finding-the-right-supplier-for-your-business.htm

GigaOm:

http://gigaom.com/2008/12/08/panjiva/

Ars Technica:

http://arstechnica.com/news.ars/post/20081210-downturn-hitting-tech-semiconductor-sector-hard.html

WWD:

http://www.wwd.com/business-news/us-apparel-suppliers-dwindling-1880152?justin=1880152

InformationWeek:

http://www.informationweek.com/news/internet/ebusiness/showArticle.jhtml?articleID=212300220

CIO:

http://www.cio.com/article/469565/Big_Supply_Chain_Troubles_in_China

SpendMatters:

http://www.spendmatters.com/index.cfm/2008/12/11/Supplier-Insight-That-Counts-Panjiva-Aims-High-Part-1

SupplyChainDigest:

http://www.scdigest.com/assets/On_Target/08-12-10-3.php?cid=2135

Logistics Management:

http://www.logisticsmgmt.com/blog/930000493/post/1790037779.html

Supply & Demand Chain Executive:

http://www.sdcexec.com/web/online/SourcingProcurement-News/Panjiva-Analysis-Shows-Economic-Downturn-Decimating-Global-Suppliers/27$10872

SupplyChainNetwork:

http://www.supplychainnetwork.com/?p=419

IT Governance, Risk, and Compliance:

http://itgrc.wordpress.com/2008/12/11/how-risk-management-tools-may-revert-decline-of-global-suppliers/

Enterprise Irregulars:

http://www.enterpriseirregulars.com/EI/34167

Alibaba:

http://news.alibaba.com/article/detail/apparel-news/100028342-1-apparel-industry%2527s-global-supply-chain.html

Home Textiles Today:

http://www.hometextilestoday.com/article/CA6621622.html

IT Professionals Database:

http://www.itpd.eu/panjiva-panning-for-gold-in-numbers

Sea Cargo Air Cargo Logistics:

http://scacli.blogspot.com/2008/12/apparel-industrys-global-supply-chain.html

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