Summer vacations provide a time for rest and reflection. While relaxing in the sun in August, we could not help but reflect on a critically important piece of business, economic and policy news you won’t often see reported in the mainstream press. What is this headline? China is losing the first salvo of the trade war with the US. While no one – except perhaps President Trump himself – believes that trade wars are “easy” to win, the victor of round 1 appears hard to dispute. Regardless of where you sit – either by industry or manufacturing supply chain tier – it’s clear that on an overall economic basis, China is taking a greater beating than the US. According to Trading Economics, the Caixin China’s Manufacturing PMI (formerly the HSBC PMI), “fell to an eight-month low of 50.8 in July of 2018 from 51.0” and both output and new … [Read more...] about China Takes a Beating in Round 1 of the Trade War
Industry News
Unraveling the Complexities: China & US Relations
If one subscribes to the narrative as presented by media headlines, it would appear that the relationship between China and the US is languishing at an all-time low. Some of this may simply be misunderstanding due to a lack of direct dialogue. For example, evidence suggests the “spy balloons” were likely anything but after further examination, despite US headlines during the crisis that stoked serious vitriol within the Chinese politburo initially, without functional relations between the countries to deescalate the situation. And of course issues concerning Taiwanese sovereignty and the South China Sea continue to reach potential flashpoints on a weekly basis. Nevertheless, beneath the frosty rapport between the US and China lies a host of internal challenges within China itself — separate from its relations with the West. China is … [Read more...] about Unraveling the Complexities: China & US Relations
Managing Through Tariffs — the End of the China-to-U.S. ‘Chicken Run’
As Surplus Record goes to press, U.S. manufacturers are once again threatened with the potential of having to manage through a new round of China tariffs. Never mind the fact that in 2018, 12 out of 18 manufacturing industries in the U.S. saw record profits, despite tariffs, according to a recent MetalMiner analysis. Regardless, if you ask a typical procurement manager today about tariffs, he/she will generally have nothing but negative things to say about their impact. A recent ISM (Institute for Supply Management) study that asked procurement managers in manufacturing if they “believe that tariffs have raised the price of the goods that you produce and deliver to your customers,” 59% of survey participants said “yes.” According to the ISM findings, the average price of goods raised to customers was 6.8%. However, only 30% of … [Read more...] about Managing Through Tariffs — the End of the China-to-U.S. ‘Chicken Run’
Terrorism, the US Corporate Response, and Economic Implications
The tragically horrific events of early October in Israel are unparalleled in the 21st century for the global Jewish community. Not since the Holocaust have so many Jews been targeted and killed simply for being who they were. The tragedy was not limited to Israelis. A minor fraction of the deceased were US citizens. As of October 13th, the death toll of US citizens stands at 27, with 17 still missing. Arutz Sheva reports that this ranks as the fourth deadliest assault on US civilians by foreign entities in history, following 9/11, the 1992 bombing of Pan Am Flight 103, and the 2016 ISIS attack on an LGBTQ nightclub in Orlando. Surplus Record resolutely condemns the appalling violence and terrorism inflicted upon Israel by Hamas and its allies, including Iran. Our hearts go out to the grandparents, parents, teenagers, children, and … [Read more...] about Terrorism, the US Corporate Response, and Economic Implications
Should You Trust AI in Manufacturing?
In our day jobs, we analyze, build and invest in technologies that leverage AI and machine learning to do things such as optimizing procurement cost savings strategies based on an underlying price forecast for a particular grade of metal. This can tell manufacturers when to lock into long-term agreements with a supplier, when to float the underlying material price via an index, when to buy on the spot market, etc. We’ve found AI (especially neural networks for price prediction) to be a pretty exceptional tool in our technology crib for building solutions which enable manufacturers to do things they could not previously accomplish with the same degree of efficiency, speed and consistency — not to mention delivering a superior outcome. Moreover, in one of the companies we run, we estimate that we are doing the work of at least twice the … [Read more...] about Should You Trust AI in Manufacturing?
