Calyptus Quarterly Manufacturing Update - Q2 2020

Calyptus consulting group, inc.

Dr. George L. Harris, Principal

• A new study published by the Journal of Supply Chain Management indicated that supply chain manager perceptions on supplier pro-activeness, trustworthiness, friendliness, and helpfulness had a significant bearing on the quality of their working relationship and results. Given these findings, new measures should be developed.

• We have been following and reporting on additive manufacturing for 10 years. With the disruption in the supply chain caused by COVID-19, the need for more just-in-time low batches of products are enormous. Recent adoption of Additive Manufacturing (AM) include the following: Bastian: Material handling Equipment; Curtiss: Bikes; Steelcase: Furniture; COAPT: Medical Device; Cobalt Robotics: Producing security robots; Husqvarna: Outdoor power products.

• BLS Data for April 2020: Reduction in manufacturing employment

  • 11.8 Million employed

  • 13.2% unemployment Significant increase

  • Average Hourly Earnings: $29.11

  • Average weekly hours: 38.3

  • Average median wage for Machinists: $45,810/year (2019)

  • 33.7% of annual wages are benefits (9.8% insurance and 3.7% retirement)(Q4 2019)

  • Output per hours decreased 3.3% Significant decrease

  • Labor costs up 3.6% (Q1 2020)

  • Import index down 1.1% in April 2020 (Second quarter in a row)

  • Export index down 2.5% in April 2020 (second quarter in a row)

• ISM Manufacturing report, May 2020: Manufacturing is contracting with U.S. economy growing

  • New orders are slowing; lower backlog

  • Inventories are growing (This could be due to COVID-19)

  • Supplier deliveries slowing

  • Employment is slowing (10 months in a row)

  • Customer inventories too low (44 months in row)

• Federal Reserve: Sign of reduced output

  • Industrial production fell 11.2% in April 2020 (largest monthly drop in 101 years) 70% reduction in output of motor vehicles

  • Capacity Utilization: 64.9% (1.8 points below its all-time low in 2009)

  Assessment: Two leading indicators, ISM and Federal Reserve continue to show decline in manufacturing sector.

Calyptus Quarterly Manufacturing Update - Q4 2019

Calyptus Consulting Group, Inc.

Dr. George L. Harris, Principal

1. The top 25 supply chain were published by Gartner for 2019. Colgate-Palmolive, Inditex, Nestle, PepsiCo, Cisco Systems, and Inditex were the top performed based on 3 year weighted ROA, inventory turns, 3 year weighted Revenue growth, and corporate social responsibility. These companies should be benchmarked.

2. Car companies in the United States are re-working their supply chains due to the USMCA, the trade deal with Mexico and Canada. Difficulties exist in finding and certifying new suppliers and restructuring plant locations. Points to re-defined supply chains in auto industry

3. U.S. Census Annual Survey of Manufactures Manufacturing jobs predominate in the Midwest

   1. Highest of Manufacturing workers

      1. Wisconsin: 9.4%

      2. Indiana: 9.1%

      3. Iowa: 8.2% 

4. BLS Data for October 2019: Few gains in manufacturing employment

   1. 12.8 Million employed

   2. 3.1% unemployment

   3. 9% are members of unions

   4. Net job gain was 26,000 employees

   5. Average Hourly Earnings: $27.94

   6. Average weekly hours: 40.3

   7. Average median wage for Machinists: $44,970/year (2018)

   8. 34.5% of annual wages are benefits (10% insurance and 4.5% retirement)(Q2 2019)

   9. Output per hours decreased .1%

   10. Labor costs up 3.6% 

5. ISM Manufacturing report, October 2019: Industry is contracting with U.S. economy growing

   1. New orders are slowing; lower backlog

   2. Inventories are slowing

   3. Supplier deliveries quickening 

6. Federal Reserve: Sign of reduced output

   1. Industrial production fell .8% in October 2019 (following .3% in September) 7.1% reduction in auto production

   2. Capacity Utilization: 75.5% (little change from 2012 (74.8%)) 

Assessment: Two leading indicators, ISM and Federal Reserve show decline in manufacturing sector.

Calyptus Quarterly Manufacturing Update - Q4 2017

Overall: Manufacturing performance improves in all areas since November 2016. 

Manufacturing Capacity Utilization Rises 0.6% since June 2017

New Orders and Production Growing; Backlog unchanged in November 2017

I.S.M. Purchasing Management Index (PMI) up 6.7% since December 2016

Manufacturing Employment up 1.5% since November 2016