Transcript Making the Most of the Global Economic Paradox

Making the Most of the Global Economic Paradox
AFLA
September 14, 2006
The Competition for Natural Resources
Limited Industrialization
Limited Development
Global Industrialization
Global Development
Equal Learning
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Associated Press
• RELATED STORIES
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environmentalists say
A pipeline sonogram. Walls with less than 20 percent of
their original thickness are flagged. Scott Horsley/NPR
Trade Deficits
Continental Integration
NAFTA, CAFTA, etc.
Europe has remained largely steady on the path toward greater continental integration. The European Union (EU)
admitted ten new members on May 1, 2004, bringing its total membership to twenty-five countries. These new
members are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and
Slovenia.
Romania and Bulgaria are tentatively scheduled to join in 2007, while preliminary membership talks are set to
begin with Turkey and Croatia.
http:www.southerncenter.org
The Future of Knowledge Workers
Graphical Order
Configurators
Help the customer describe what
they want and then translate
accurately to manufacturing or
distribution
Real Time Scheduling
Once you have a batch of orders, you
need a way to schedule
manufacturing to optimize
production
Object oriented, memory resident
programs that model manufacturing
processes and their constraints that
quickly produce an optimized
manufacturing schedules
Shop Floor Flexibility
Combine real time production with
modular product designs and
small, flexible assembly teams
A networked client-server product
that controls the sequences of
operations and queues of
materials on the shop floor and
links with ERP systems
Customized Engineering
A custom design change can force a
quick product engineering change
Sits between MRP and CAD systems
to manage changes real time
Demand- Driven Logistics
Logistics - getting the right quantity of product to the
right customer in the right form at the right time
Create customer specific profiles and track the flow of
product
Linking to Suppliers
EDI
Bar Coding
E-Mail / The Internet
EFT
Seamless integration of
customers, distributors,
manufacturers. The
opportunities for service
improvement will be
tremendous.
Composition of GDP
Government
spending - 19%
Capital
Spending -16%
Consumer
Spending -70
Other - 5%
Composition of Consumer Spending
(PCE*)
Durable Goods
- 12%
Nondurable
goods - 29%
Services - 59%
* Personal Consumption Expenditures
The Reports on Business
• Surveying manufacturing since 1931
• Over 350 respondents
• 20 SIC Codes
• Weighted by contribution to GDP
• 70% response rate
• Nonmanufacturing started in June 1997
The Reports on Business
• A series of diffusion indexes measuring
change from month to month
• Above 50% indicates growth
• Below 50% indicates contraction
• 50% is the breakeven or “no change”
Economics and Calculus
50 %
The Rate of UP is DOWN
50 %
The Rate of DOWN is UP
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Manufacturing PMI - 54.5 (Sep)
Non-manufacturing BAI - 57.0 (Sep)
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PMI
BAI
Manufacturing New Orders
August 2006 Index: 54.2
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Manufacturing Production
August 2006 Index: 56.6
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Production
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Manufacturing Employment
August 2006 Index: 54.0
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Manufacturing Inventory to Sales Ratio
(New Orders - Inventories)
August 2006: +4.0
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The recent trend is that new
order growth has slowed and
inventories have
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Manufacturing Prices vs Supplier Deliveries
Pricing Power is created by Slowing
Supplier Deliveries
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Supplier Deliveries
Prices
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ECONOMICS 101
1.
The Law of Abundance vs the Law of Scarcity
2.
Currency rates are more important than interest rates
3.
Technology and Services drive the economy
4.
Over time the economy solves its own problems
5.
There are winners and losers in every economic scenario; how
losers are compensated is as important as how winners are
rewarded
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All things in nature, the faster they grow the faster they die
7.
Most of what we regard as objective is really subjective
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Human beings are not wholly, or in some cases, even
substantially rational
9.
Uncertainty is the norm; certainty is the exception
10. Large parts of what we know are wrong; we just don’t know
which parts