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Survey: US Tech Companies Optimistic about Exports

By APICS Staff | 12 | 19 | October 02, 2012

According to a survey, most high-tech manufacturers in the United States expect to increase exports of consumer electronics, Reuters reports. Only 23 percent of respondents say they had export growth over the past two years, but 74 percent expect growth in the next two years. The survey, conducted by IDC Manufacturing Insights for UPS, polls supply chain and logistics managers at 125 manufacturers in industries including consumer electronics, semiconductors, communications equipment, and electronic components and accessories.

Reasons cited for the increased optimism about exporting include a growing middle class in developing nations, a growing number of free-trade pacts among nations, and rising labor costs overseas. The increasing middle class has “more disposable income and a heavy appetite for technology products like cell phones, tablets and laptops,” says Ken Rankin, marketing director at UPS. Respondents also reveal that unstable global suppliers, security concerns, and the difficulty of managing global inventory are the biggest barriers to raising export levels.

The survey also reveals that manufacturers expect India, the Middle East, and Africa to be the biggest areas of tech export growth, followed by Brazil, South America, Eastern Europe, Korea, and China. Currently, the companies surveyed sell and ship 97 percent of products in North America. That number is expected to decline to 90 percent within three to five years. About 70 percent of respondents also say they will alter distribution networks in response to a widening of the Panama Canal to allow larger ships in 2015.

IKEA Switching Entirely to LED-based Light Bulbs

Swedish furniture giant IKEA will sell light bulbs based only on light-emitting diodes (LED) starting in 2016, the Financial Times reports. Light bulbs installed in its stores also will transition to LEDs in the next few years. Reasons cited for the change to LEDs include better lighting, cheaper running costs, a desire to push consumers toward greener technologies, greater flexibility regarding colors, and the lack of mercury compared to compact fluorescents.

“Lighting becomes much more exciting,” says Steve Howard, chief sustainability officer at IKEA. “The old technology is pretty inflexible. People don’t like waiting some seconds or minutes for full brightness. If people can see how good LEDs can be, we think they will swap.”

One hurdle for mass consumer adoption of LEDs is the higher purchasing costs compared to other types of  light bulbs. However, their lower operating costs should still make them cheaper in the long run than other options.

Currently, LED technology is less effective at performing some functions compared to other bulbs, such as dimming. This is part of the reason IKEA is giving itself a few years to make the switch. Howard says the company is nevertheless fully committed to the plan. “The advantage of pushing everything behind it with the scale we have is that we will be able to bring down the cost,” he says.

Fewer Drug Shortages Occurring in 2012 

According to the US Food and Drug Administration (FDA), drug shortages are at about half the levels compared to this time last year, MedPage Today reports. There were 181 total tracked shortages in 2010, 251 in 2011, and only about 100 so far this year. The drop is credited to improved quality at drug manufacturers, leading to fewer regulatory actions and recalls.

Drug shortages occur primarily in difficult-to-manufacture sterile medicines made for injection. A very small number of companies produce these materials, which amplifies the consequences of even a single shortfall. “We have fewer new shortages, but ... some of these firms that [were] having problems are still having problems,” says Valerie Jensen, registered pharmacist and associate director of the drug shortage program in the FDA Center for Drug Evaluation and Research. Her group has increased its efforts in the past few years to assist drug companies in managing quality and supply issues. Often, the FDA asks companies to increase production when there is danger of a shortage, although it lacks the authority to enforce these requests.

Congress recently passed a bill that requires drugmakers to inform the FDA of known supply disruptions that could create or worsen shortages, which helps the agency to carry out prevention and response tactics. However, some congressmen blame strict enforcement policies surrounding recalls as a root cause of drug shortages. 

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October 14–16, 2012
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