APICS is the premier professional association for supply chain management.

Delayed Payments Squeeze Suppliers

by | N/A 2013 | 0 | 0

Some large consumer products companies are turning to a strategy that involves delaying payments to commodity suppliers by up to six months, the Financial Times reports. Advertising agencies also are getting caught up in the delays. This has the effect of squeezing cash flows and constraining critical points in upstream supply chains.

“In order to remain competitive, reflect current industry standards, and drive world-class growth, we need to change payment terms,” reads a statement issued by Mondelez, a company recently formed out of Kraft’s snack foods brands. The company regards this as a way to better align with the industry and boost competitiveness while improving transparency and predictability of payment processes.

Low interest rates and healthy balance sheets are two realities enabling companies to delay payments, says Gary Karp of food industry consultancy Technomic, who adds, “At some point, there will be some bottom-line implications relative to which [suppliers] can stay in business and which will be put out of business ... This seems like an exercise of power because they have it.”

Removing Counterfeit Electronics from Military Supply Chain 

The US government is proposing a rule that would require military contractors to take specific steps to avoid the use of counterfeit electronics, the Washington Post reports. Recommendations include training employees to recognize fakes, increased testing, using trusted suppliers, and setting aside suspect parts. Under the proposed guidelines, contractors would be responsible for replacing parts discovered to be fake.

The proposal comes at a time of increased scrutiny for government contracts. The defense supply chain was described in a Senate Armed Services Committee report as relying upon “hundreds of unvetted, independent distributors to supply electronic parts for some of our most sensitive defense systems.” An investigation uncovered about 1,800 cases of suspected counterfeit electronics, more than 70 percent of which were found to originate in China. Government representatives say these counterfeits endanger armed forces in the field.

Advocates for the electronics industry are criticizing the proposed changes. “The government is washing its hands of its responsibility,” says Alan Chvotkin, executive vice president at the Professional Services Council. “It’s going to add significant costs for a lot of companies.”

Copper Industry Suffers Rising Delivery Fees

Commodity-trading firms are charging unusually high delivery fees to get copper out of their warehouses, and suppliers are passing on the costs along the supply chain, the Wall Street Journal reports. The rising cost of procuring metal is worrisome to many manufacturers. Copper prices are up 40 percent in the United States in the past two months alone, to a record high since benchmarking firm Platts began to track them in 1979.

The delivery fees are occurring alongside unusually high copper inventories. According to the London Metal Exchange, copper stored in its warehouses is up 92 percent this year. The Journal reports this metal is largely owned by two trading companies, which are incentivized to keep warehouses full in order to collect rent from customers for the storage, even as the inventory presents logistical problems for getting out the metal.

Recent supply disruptions also are increasing demand on warehoused metal, further contributing to higher delivery fees. This year, a landslide at a mine in Utah and an accident at a mine in Indonesia have led to a 125,000-ton decline in global copper output.

The warehouse system is mostly self-regulated. “Anyone who wants to get metal has to pay more than the warehouse,” says Ryan Belshaw, metals analyst with Macquarie Group. “The warehouses are absorbing anything they can.”

e-News Solutions

Upcoming Webinars

APICS Extra Live: Does Big Data Have Big Potential for You?
Presented by: Jonathan Thatcher
Director of Research, APICS
June 6, 2013 | 1:00 p.m.-2:00 p.m. CT
Click here to register.

Webinars On Demand Available

APICS Extra Live: Linking Supply Chains to Corporate Strategy
Watch the webinar now.

APICS Vendor Webcast: The Right Ingredients for Supply Chain Success [Sponsored by Logility]
Watch the webinar now.

Watch more APICS webinars on demand.


Upcoming APICS conferences

Learn more about APICS conferences.

Best of the Best S&OP Conference
June 13-14, 2013 | Chicago, Illinois, USA

2013 APICS International Conference & Expo
September 29-October 1, 2013 | Orlando, Florida, USA

Upcoming APICS seminars and workshops

Learn more about the APICS seminars.

Principles and Practices of MRP for the Manufacturing Planning
Monday, June 17, 2013, 9:00 a.m.-5:00 p.m. ET | Toronto, Ontario, Canada

Principles and Practices of MRP for the Manufacturing Planner
Thursday, June 20, 2013, 9:00 a.m.-5:00 p.m. CT | Chicago, Illinois, USA

Supply Chain Risk Management Seminar Orlando: Identify, Assess, Mitigate, and Manage Risk
Friday, September 27, 2013 | 9:00 a.m.-5:00 p.m. ET

APICS Strategic Sourcing Seminar, in partnership with the APICS San Diego Chapter
Wednesday, November 6, 2013 | 9:00 a.m.-5:00 p.m. PST | San Diego, California, USA


APICS folios are now a FREE benefit for APICS members

FREE - APICS member
$19.95 - nonmember

APICS folios provide a go-to resource on a variety of industry topics and trends. Grounded in research to keep supply chain and operations management professionals ahead of the game, APICS folios cut through the clutter and bring you best practices, how-to steps, and practical advice that give you and your organization a competitive advantage. APICS members now have free access to APICS folios as an added benefit to your APICS membership. 

Current APICS folios  

Visit apics.org/folios to download yours today.  

Supply chain professionals: Take the APICS CSCP Learning System Free Demo today
By earning the APICS Certified Supply Chain Professional (CSCP) designation, you will demonstrate significant commitment to your profession and your career, distinguish yourself as an industry expert, and excel with your newly acquired specialized knowledge.


Take the APICS CSCP Learning System Free Demo to get started on your way to earning the APICS CSCP designation.


APICS CPIM exam study options

APICS offers a variety of study options to help candidates prepare for the APICS Certified in Production and Inventory Management (CPIM) exams and enables them to choose the option that matches their preferred learning method.


Instructor-led courses

For students who learn best in a classroom-based environment, there are instructor-led courses.

Find courses at your local APICS chapter or find an APICS partner outside North America to find courses in your area.

Online certification review courses

Online courses are ideal for professionals who enjoy taking a structured class, but need more flexibility.

Other APICS self-study options

APICS offers a wide variety of tools for candidates interested in studying on their own, including the

  • APICS CPIM Exam Content Manual
  • APICS CPIM practice questions
  • APICS CPIM study notes.

See a list of self-study tools.

All comments will be published pending approval. Read the APICS Comment Policy.


  1. RadEditor - HTML WYSIWYG Editor. MS Word-like content editing experience thanks to a rich set of formatting tools, dropdowns, dialogs, system modules and built-in spell-check.
    RadEditor's components - toolbar, content area, modes and modules
    Toolbar's wrapper 
    Content area wrapper
    RadEditor's bottom area: Design, Html and Preview modes, Statistics module and resize handle.
    It contains RadEditor's Modes/views (HTML, Design and Preview), Statistics and Resizer
    Editor Mode buttonsStatistics moduleEditor resizer
    RadEditor's Modules - special tools used to provide extra information such as Tag Inspector, Real Time HTML Viewer, Tag Properties and other.