Procurious
#webringthedonuts
iPad Competition Terms & Conditions
Online Procurement Business Network
Procurement Business Network FAQs
Procurement Business Network Partners
Quiz test
What Would You Do If The President-Elect Criticised Your Supply Chain?
January 16, 2017 Procurious HQ
Major US organisations are starting to rethink their manufacturing strategies for fear of being labelled "un-American" by the President-Elect.
Every US-based supply manager with outsourced supply chains should follow Donald Trump on Twitter. Why? Because for major companies with overseas manufacturing operations, there's every chance that the President-Elect will label your organisation "un-American".
Since November 2016, Trump has criticised companies including Ford, Toyota, GM, United Tech and, more recently, pharmaceutical organisations including Johnson & Johnson, Pfizer and Bristol-Myers for moving U.S. jobs abroad. His focus appears to be on companies outsourcing to Mexico and China, where historically low-cost labour enables organisations to manufacture their products at a competitive level.
Companies changing plans
According to a report from Reuters, boards of a number of U.S. companies that manufacture overseas have directed their public relations teams to plan a response in case the President-Elect singles them out on Twitter.
Similarly, some companies are reportedly re-thinking mergers and other moves that would involve outsourcing to China for fear of being cast as "anti-American" by the President-Elect. Ford has backed away from plans to build a $1.6 billion plant in Mexico, while United Tech has announced plans to keep half of the 2,100 jobs it was shifting over the border. Reports have also emerged of dozens of major organisations contacting government relations and PR advisors to assess if they have any "red flags" that would draw Trump's attention and lead to a damaging Tweet being sent.
New risk metric: weighing national interest
According to the Reuters report, "corporate leaders can no longer focus only on maximising shareholder value; they must now also weigh national interest." Essentially, being labelled as un-American has become a new risk metric that needs to be weighed against the cost benefits of overseas manufacturing.
Trump's aggressive rhetoric against China may also lead to a reduction of outsourcing to the manufacturing powerhouse as the relationship between the two countries is expected to decline. Trump has also flagged high tariffs as another way in which he plans to move manufacturing jobs from China back to the U.S.
The effects of a Trump Tweet cannot be downplayed. Lockheed Martin lost $4 billion in value as share prices feel immediately after Trump criticised the organisation on Twitter, while Toyota saw $1.2 billion in value wiped in five minutes following a similar Tweet. Developers have even created an App to alert investors to Trump's market-moving Tweets. This week, the nine biggest pharmaceutical companies that use manufacturing plants in Europe, Asia and Africa lost roughly $24.6 billion in 20 minutes during a news conference in which Trump singled out the industry.
Alongside potential losses in share value, coming under fire from the soon-to-be President puts organisations at risk of brand damage and consumer boycotts.
It is unclear whether Trump will continue to use Twitter to drive his "Made in America" agenda, or use more traditional tools to affect change such as policies and import tariffs.
What do you think about "Made in America"? Are organisations right to be wary of a tweet from Trump? Let us know in the comments below.
We've kept one eye on the news headlines from around the world this week…
Proliferation of "non-human workers" accelerates
Amazon reportedly placed 15,000 robots across 20 fulfillment centres in 2016, increasing its machine workforce by 50%.
Similarly, iPhone manufacturer Foxconn has replaced 60,000 Chinese employees with robots, while Wal-Mart is automating up to 7000 jobs, including roles in the accounting and invoicing departments.
In the U.S. alone, up to five million jobs are expected to be replaced by robots by 2020.
Read more at Supply Chain Dive
Blood supply chain faces an uncertain future
Due to changes in medical practices, hospital demand for blood has been dropping steadily for the past decade.
The strong supply and weak demand for blood has led to a 10 percent drop in the cost of a unit of red blood cells in the US, with overall revenue for the blood banking industry dropping to US$1.5 billion per year in 2014, down from $5 billion in 2008.
S. blood banks are expected to lose 12,000 jobs in the next few years, or roughly a quarter of its workforce.
Read more at The Conversation
President Trumpprocurement newssupply chain news
Previous PostTop Reasons to Advance Your Career With an MBANext PostColin Powell To Complete Stellar Keynote Line-Up At ISM2017
Procurious Blog
7 Reasons to Hire on Contract for Supply Chain!
"Your Procurement Project Has No Budget. Prove You Need One." Too Harsh Or Just Right?
Why Procurement Will Soon be One of the Most Sought After Professions
Tired Of Small Orders Delivered In Huge Boxes? Technology Has The Answer
This One Surprising Trait Will Help Increase Procurement's Visibility In The C-Suite
#firstmovers
Big Ideas Summit
Future Of Supply Chain Now
Generation Procurement
Logistics and Warehousing
Procure with Purpose
Procurious News
technical procurement
Women in Procurement