New Jersey’s legal crusade against the energy sector won’t solve climate change, but it will have far reaching consequences for the supply chain and – paradoxically – may undermine attempts to reduce carbon emissions.
The state has filed a lawsuit against five major energy companies and a petroleum trade association over carbon emissions. New Jersey is just the latest in a long line of states, counties, and cities to file such a lawsuit. These legal fights have dragged on for years, with backlogged courts wasting precious resources on back-and-forth litigation and a seemingly endless appeals process. Meanwhile, the energy companies are spending money on defense and taking on unnecessary risk. This means higher fuel prices for trucking companies and consumers, and inflated costs for hauling and delivering goods.
Lawsuits won’t just raise the price of fuel; they’ll also reduce investment in more energy- and emission-efficient solutions. A crucial piece for solving the climate change puzzle is ensuring resources are dedicated to innovation and the next generation of energy technologies.
Attorney General Matt Platkin, flanked by New Jersey Department of Environmental Protection Commissioner Shawn LaTourette and acting Division of Consumer Affairs Director Cari Fais, outlines the claims New Jersey is making against several major oil companies in October 2022.
President Biden is pushing for American energy independence by incentivizing increased fuel production. Why then is the Garden State suing the companies for having sold these necessary products in the first place?
Our elected officials should view the leading fuel producers as partners – not adversaries. Energy companies are already reducing emissions by embracing carbon capture technology, fixing methane leaks, and expanding renewable energy portfolios. Expensive and time-consuming lawsuits only hold the industry back as companies look to make these vital changes.
We need real action, not lawsuits. As executive director of the New Jersey Motor Truck Association, I know first-hand how much work needs to be done to repair and modernize New Jersey’s infrastructure in preparation for future weather events. The state should expedite using the billions of dollars that Congress allocated for resiliency projects and other improvements in the Bipartisan Infrastructure Law.
Fixing our crumbling roads and bridges will do far more than any lawsuit ever could to make life easier for both truckers and consumers. Infrastructure improvements will bring carbon emissions down by reducing the amount of time cars, trucks, and buses spend idling in traffic, increasing efficiency in the supply chain and keeping the economy moving.
We can do better. Instead of fighting the industry in the courts, New Jersey should seek to partner with energy companies, other states, and the federal government. In doing so, we can foster technological innovation that will reduce carbon emissions while improving infrastructure to protect our communities and the economy from the effects of extreme weather events.
How’s your supply chain? During the pandemic and in its immediate aftermath, the media were filled stories about the difficulties U.S. businesses were having getting the goods they needed. NJBIZ was no exception. Now that COVID-19 is no longer ravaging the economy, now is a good time to check in on whether supply chains have recovered.
So this edition of NJBIZ Conversations features a discussion with Francis Walsh, the CEO of Lyndhurst-based NRS, a trucking and logistics company. NRS works in some of the industries most severely affected by the pandemic, including medical supplies, food and beverage and retail. Walsh describes what it was like running a logistics provider during the pandemic, the problems that remain with supply chains and what it will take to get back fully to normal.
To watch the interview, click on the image below.
For podcast fans
NJBIZ Conversations is now available as a podcast, as well as a video. Subscribe to NJBIZ Conversations on Apple or Google Podcasts. Find direct links here: njbiz.podbean.com
Faced with short-term manufacturing issues and unprecedented demand after its diabetes-related drugs became popular as a quick fix for weight loss, Novo Nordisk is working to resolve shortages of Ozempic and Wegovy by the end of the year.
The Danish multinational pharmaceutical company – which maintains its U.S. headquarters in Plainsboro – has taken several steps to minimize demand from new patients and increase the likelihood there will be enough medications available to meet the needs of current patients.
Approved in 2017 by the U.S. Food and Drug Administration, Ozempic (semaglutide) is a treatment for adults with Type 2 diabetes that is self-injected under the skin. The drug works by mimicking a natural hormone the body releases when a person eats, potentially causing weight loss as a secondary effect.
Along with diet and exercise, Ozempic can improve blood sugar and reduce the risk of major cardiovascular events, such as heart attack, stroke or death in adults with Type 2 diabetes and known heart disease.
Allison Schneider, director of media relations & issue management at Novo Nordisk, noted that Ozempic “was clinically researched and studied in patients with Type 2 diabetes” and not approved by the FDA “for chronic weight management nor is it intended to be used as a lifestyle medication.”
Novo Nordisk is a Danish multinational pharmaceutical company that maintains its U.S. headquarters in Plainsboro.
On the other hand, Wegovy, which also contains semaglutide, was authorized in June 2021 specifically for chronic weight management in adults who are obese or overweight with at least one weight-related condition, such as high blood pressure, Type 2 diabetes or high cholesterol.
The drug, which is given through injector pens, is meant to be used with a reduced-calorie meal plan and increased physical activity. It is also “not intended to be used as a lifestyle medication, nor has it been studied for this,” Schneider said.
In recent weeks, numerous media outlets reported on increased demand of Ozempic and Wegovy, particularly among celebrities and social media influencers who are willing to shell out big bucks to take advantage of semaglutide’s ability to curb hunger.
Wegovy was on the market for about six months when Novo Nordisk announced it was in short supply, attributing the shortage to an issue with its contracted manufacturer.
After that, many physicians reportedly shifted to off-label Ozempic prescriptions for their patients who needed or wanted to lose weight but could not access Wegovy. This trend intensified under the influence of social media campaigns promoting semaglutide, eventually leading to shortages of Ozempic, as well.
And although Wegovy and Ozempic contain the same active ingredient, Novo Nordisk says they are not interchangeable.
Right now, certain dosage amounts of the two drugs are flagged by the FDA as “in shortage.” Ozempic was first added to the FDA’s list in August due to a “demand increase for the drug” that could result in localized short-term stock outages in pharmacies that will continue through November.
The drug costs around $900, however since it is not approved for weight loss, Ozempic may not be covered for an individual without diabetes.
In March, Wegovy, which costs about $1,350 for a month’s supply, was included on the FDA’s drug shortages database because of “requirements related to complying with good manufacturing practices.”
Throughout 2022, Novo Nordisk has posted substantial growth in its global diabetes care sales and obesity care sales. According to its most recent financial results reported in August, during the first six months of the year, global diabetes care sales increased 16%, mainly driven by a 45% increase for its GLP-1 (glucagon-like peptide 1) portfolio, a segment that includes Ozempic, Rybelsus and Victoza.
The boost has helped Novo Nordisk capture over 30% of the global diabetes market. Within North America, Novo Nordisk is the market leader, with a nearly 53% value market share compared to 50% a year ago.
According to Novo Nordisk, the growth is due, in part, to increased prescription volume of the GLP-1 class of more than 35% in the first quarter of the year, the company reported. During the first half of 2022, weekly-new-to-brand scripts for Ozempic increased from 20,000 to 28,000 in the U.S.
“There are multiple factors contributing to the supply disruptions of Ozempic, including greater than expected overall demand for Ozempic,” Schneider said. “While we recognize that some health care providers may be prescribing Ozempic for patients whose goal is to lose weight, it is up to the clinical discretion of each health care provider to choose the best treatment approach for their patients. We trust that health care providers are evaluating a patient’s individual needs and determining which medicine is right for that particular patient. Novo Nordisk does not promote, suggest, or encourage off-label use of our medicines and is committed to fully complying with all applicable U.S. laws and regulations in the promotion of our products.”
After reporting an 84% increase in obesity care sales (102% in North American operations and 60% in international operations), the company told investors during an Aug. 3 earnings call that it is continuing to address the previously announced supply issues related to Wegovy.
“Our focus remains to ensure continuity of care in the patients that have already initiated treatment,” said Doug Langa, executive vice president and head of North American operations. “In line with expectations, this has negatively impacted Wegovy prescription trends.”
He added that, “Regarding Wegovy supply, commercial production at the CMO [contract manufacturing organization] was reinitiated in the second quarter of 2022 and inventory building is ongoing. We expect to make all doses of Wegovy available in the U.S. toward the end of the year.”
According to the company, its top priority remains supporting “current patients who have started treatment with Wegovy” and making sure they can advance through the dose escalation and stay on the maintenance dose.
As part of that commitment, Novo Nordisk said it has:
Asked health care providers to notstart new patients on Wegovy
Paused advertising and promotions of the drug
Temporarily stopped shipments of the first two dose strengths (0.25 mg and 0.5 mg)
In addition to restarting commercial production at the contract manufacturing site and conducting ongoing inventory building, Novo Nordisk is making plans for additional production capacity to come on-line in 2023.
With the drugs now in short supply, there are concerns over how it will impact diabetics who need to get their prescriptions filled.
Dr. Robert Gabbay, chief scientific and medical officer at the American Diabetes Association, said the organization “feels strongly that people that have a medical condition should have access to treatment” and is “very much concerned about anything that limits access to effective treatments for diabetes.”
Ozempic “has been an important tool for people with diabetes,” he said. “Not only does it lower blood glucose and weight but it has been shown to decrease cardiovascular events (heart attacks) one of the leading causes of death for those living with diabetes. If they do not have access to the drug, their blood glucose increases, and this turns out over time to a greater risk for complications of diabetes.”
Gabbay went on to say that, in general, when an individual takes a drug off label, the safety and efficacy of the medication may not be the same.
“Drugs go through a rigorous evaluation by the FDA for approval for a particular group of people to know it is safe and effective,” he said.
For more than a year, companies have been confronting supply chain snafus. The hitches are particularly acute for manufacturers, which typically require sizeable volumes of numerous components. We spoke with some experts about how to ease the pain.
Friedberg
“We’re trying to keep our supply chain short by working with local vendors — but they often have their own issues,” said Gail Friedberg, CEO and co-founder of Zago Manufacturing Co., which produces components like self-sealing screws, nuts and bolts. “We have also sourced additional vendors; and we’ve always treated them right, paying them quickly so we’re first in line.”
The company also tweaked schedules. “We’re ordering out longer, from six months to a year, instead of the traditional three months,” she added. “We build anticipated delays into our production schedule, and we consider that when we quote deliveries to customers. But we are not stocking more inventory.”
Manufacturers have faced a host of overlapping issues. “It’s been one wrinkle after another,” said Blair Robbins, an EisnerAmper partner. “First, the COVID pandemic created a lot of issues, then you had backlog at the ports, and then we faced the threat of a national rail strike.”
Robbins
Previously, companies could get around threats – such as the rail dispute – with alternatives, like using trucks to transport products. But still-high gas prices and a shortage of drivers could stall that option, he added. “When we meet with manufacturing and other clients, we talk about the need for a ‘Plan B’ alternative,” said Robbins. “With ongoing port delays and other challenges, one option is to use air freight, but that’s a lot more expensive and it’s usually feasible when only a few components are involved.”
Another strategy to deal with supply chain disruptions involves changing the mix of product offerings. “Using price promotions and other incentives, manufacturers and other companies are trying to move the goods they’ve got in stock, while they wait to replenish low- or out-of-stock products,” he added. “Also, in an effort to cope with supply chain snarls, some manufacturers are moving away from the low-inventory ‘just in time’ approach to a higher-inventory ‘just in case’ game plan.”
In a bid to avoid stock-outs, some manufacturers are also turning to long-term supply contracts. “For the longest time, many manufacturers didn’t enter into formal contracts with suppliers,” explained Robbins. “Instead they cultivated relationships with suppliers. But now I’m seeing some of them signing two-year purchase commitment contracts in the hopes of being shielded from price increases, while increasing the odds that they’ll have access to raw materials or components. But commodity prices can go down as well as up, so down the road they may be paying above-market prices for their purchases. And they’ll be committed to making those purchases regardless of the actual demand for their products at the time. So some will win, but some will lose.”
Accountants to the rescue?
Knibloe
When NJBIZ asked Wil Knibloe – a principal in advisory services at Crowe LLP – about the supply chain crisis, he channeled his inner Charles Dickens and replied, “For manufacturers, it is the best of times, it is the worst of times.”
Many manufacturers and other companies “are having some of their best years, ever,” he explained. “But they’re also running themselves ragged chasing parts and labor. And the situation has been exacerbated across manufacturing and other industries by a shortage of people entering the trades.”
Another Crowe advisory services principal, Bart Kelly, illustrated the challenges, noting that, “Two of our clients – a $2 billion residential floor installation company, and one of the largest commercial floor installers – are looking at lead times of up to 28 weeks, compared to their historic six-week leads. There’s a great deal of uncertainty, and companies are hoarding supplies, and using 3PLs [Third-Party Logistics providers] and other outsourced solutions to store whatever excess inventories they can get.”
But the inventory scramble can have unexpected consequences, he added, pointing to recent announcements from Target Corp. and other retailers whose profits took a hit because they had a glut of inventory, which had to be unloaded at fire-sale prices.
“Many companies have to do a better job of coordinating, communicating and planning between their sales and operations divisions,” said Knibloe. “Too often, they operate as separate silos. And in manufacturing and other companies, buyers often do not coordinate their internal forecasts with vendor-suppliers. That has to change.”
Kelly
The challenge can be exacerbated by “knee-jerk reactions,” Kelly added. “Faced with supply chain kinks, many manufacturers, retailers and others are putting in highly inflated orders for every kind of component, which not only bruises their cash flow, but also means that they are overstocked with some parts and understocked when it came to others.”
Advisers like Crowe are trying to help with performance improvement services, Knibloe noted. “We help companies to think through their planning, ordering and pricing strategies. We also counsel them to consider the long term. Right now they may need to go bigger on inventory, but they don’t want to get their levels too high — because once this supply chain crisis is resolved, they may be saddled with excess inventory, and then it becomes a balance sheet issue.”
Most planning models utilize algorithms that consider lead times and production schedules, added Kelly. “But lead times can be a variable, because you’re dealing with outside suppliers. So, supply-chain professionals have to be more thoughtful when it comes to how much they trust their vendors’ stated lead time and be flexible enough to build in some buffer to the order-production calculations, instead of cutting their time right to the edge.”
Some advisers are taking other steps to ease manufacturers’ supply-chain blues. “Analyzing a company’s inventory management can make a difference,” said Alan Markowitz, a Marcum LLP partner. “For example, are clients overbuying or underbuying inventory? We also go deep to see how clients are managing their cash flow and inventories; and whether they are properly aligning their forecasting and buying activity to maximize efficiencies. It all adds up.”
For Patrick Enright – senior vice president of academic affairs, workforce development & student success at the County College of Morris – the crisis has hit home. “We work closely with more than 30 manufacturers, and they are very busy, while their cost of materials has significantly increased. And if you want to buy something with a chip in it, it’s going to be delayed.”
When CCM launched a new welding program, “our order for welding units was delayed for months, so we had to rent some,” Enright added. “It’s costly but you have to do it. Going through this has sparked talk about creating a new industry focused course on supply chain training, aimed at people who already have a bachelor’s degree and want to add to their skill set.”
Some local help
Gung
“Manufacturers have increased collaboration and communication substantially since the pandemic, largely with the help of their local MEP [Manufacturing Extension Partnership] centers,” according to Alan Gung, NJMEP copywriter and media specialist. “That is why there is a need for a more centralized national supply chain database, so businesses can continue operations without any disruptions and the communication of needs and potential support can be standardized across the nation.”
NJMEP has been working with U.S. Sen. Bob Menendez, a Democrat, and other legislators to develop and implement a National Supply Chain Database, he added. “This would offer manufacturers key information to be a resource in their decisions for retooling in critical areas to meet product demand. This National Database addresses the need to have an extensive and centralized database to minimize future U.S. supply chain disruptions.”
Bringing more manufacturing to the U.S. would reduce the risk of supply chain disruptions, observed Gung. “The main issue we saw over COVID was the semiconductor shortage. If the U.S. has a strong semiconductor industry, consumers wouldn’t have felt that burden. The same goes for masks. Surgical masks were mostly produced overseas. Now that [mask] manufacturing came back, regardless [of whether] countries close their borders to us we can stand on our own.”
Storm of the century
It’s not unusual for supply chains to develop some hiccups, and “generally, they involve either price disruptions or delivery delays,” said Sanchoy Das, an NJIT professor of Mechanical and Industrial Engineering. “But we are in the unique position today of experiencing both pricing and delivery disruptions simultaneously. This drives a multiplier effect and a level of disruption that exceeds what companies have planned for.”
Manufacturers can take some steps to mitigate the pain, however. “Technology can be leveraged to create more visibility across supplier networks, functioning like an early warning system,” he noted. “Also, companies typically concentrate their purchases among one or two suppliers as a way to increase their economy of scale — but today it may be better to set up relationships with multiple sources, and even across geographies, as a way to increase resilience and reduce sourcing risk.”
At the same time, Das thinks that manufacturers may edge away from the low-inventory “just in time” approach that’s held sway for many years, “and may go back to the future with higher on-hand stock as a buffer. That generally means higher carrying costs, including paying for more warehousing space, but the buffer may be worth it. To mitigate the investment, more companies may move to 3PL (Third Party Logistics providers), instead of saddling themselves with facilities that they may not need once the supply chain wrinkles are worked out.”
This concept of balance is second nature to Das. The author of “Fast Fulfillment: The Machine that Changed Retailing,” he provided advisory services to a large, New Jersey-based logistical facilities operator. “I’ve been working with them on the tradeoffs between operational efficiency and economic efficiency,” he related. “For example, they have the option of building facilities in Pennsylvania — where land is less expensive but the distance to centers like New York is longer, or in locations like Exit 8A off the N.J. Turnpike or in Secaucus. The latter two are more costly, but they are also closer to New York and a port like Newark. Today, with more shopping being done online, speed is more important than ever, so these kinds of considerations are even more critical.”
A June report by JLL Capital Markets, covered by NJBIZ, identified the New Jersey and New York ports market as one of the top five nationwide for rental growth, as many “ports are seeing their busiest years ever for containers.”
IMC Cos. and its H&M Intermodal Services brand are taking advantage of that port traffic and taking their investment one step further by jointly opening a new truck and depot terminal at 915 Delancy St. in Newark.
According to a July 14 announcement, the new 10-acre location features a paved, lit, fenced yard with 24-hour security-controlled access and storage for 1,200 containers. It’s located only 3 miles from Port Newark and features lifts to ground containers, as well as a warehouse and freight transfer facility.
H&M Intermodal Services’ new terminal is expected to open in spring 2023. – IMC COS.
“This location brings much needed velocity in the N.Y./N.J. market for those who ship through the ports,” Barry Bernard, president of H&M Intermodal Services, said in the statement. “Our new facility offers customers the ability for us to pull their containers into our secured storage until they are ready to take delivery.”
Expected to open in the spring of 2023, the building will feature a 20,000 square-foot warehouse with 21 dock doors and 5,000 square feet of office space. It will also offer warehousing and transloading services.
“The transfer facility is another value-added service for our customers, allowing the quick transfer of freight from container to over-the-road trailer, which will reduce per diem and chassis usage expenses,” Bernard added.
H&M also has locations in Kearny and Philadelphia. Its parent company, IMC, is headquartered in Collierville, Tenn., according to its website.
In effort to work directly with certified local and diverse-owned businesses, RWJBarnabas Health launched BuyLocal, an online platform designed to increase connections with such enterprises and loop them into its products and services supply chain.
RWJBarnabas Health announced the online platform July 11. According to the health care system, more than 200 eligible businesses have registered to date.
Manigan
“As an anchor institution that prioritizes addressing the social determinants of health, our commitment to our patients and neighbors extends beyond traditional care delivery,” said RWJBarnabas Health President Mark Manigan. “Our health system is one of the largest employers and purchasers in New Jersey, and we are dedicated to investing those dollars back into the communities we serve.”
Businesses that could potentially meet RWJBarnabas Health’s future service or supply chain needs can register on the BuyLocal platform. Then, as RWJBarnabas Health BuyLocal vendors, they’ll be included in a database of businesses considered for procurement and contracting opportunities within the health system.
New Jersey-based, certified minority-, women-, veteran-, disabled veteran-owned; small businesses; and disadvantaged business enterprises are all eligible to participate.
“Through this new portal, our organization will gain instant access to local and diverse businesses and will be able to contribute to the economic growth of their communities in a very measurable way,” said Dr. Paul Alexander, executive vice president and chief health equity and transformation officer of RWJBarnabas Health.
BuyLocal is the latest initiative in the system’s Social Impact and Community Investment practice, through which the health system aims to increase economic growth by increasing opportunities for certified local and diverse businesses.
BD (Becton, Dickinson and Co.) named Rishi Grover as executive vice president and chief integrated supply chain officer, effective July 7.
In this position, Grover will lead the Franklin Lakes medical tech company’s supply chain; operations; procurement; sustainability; and environmental, health and safety teams. He will also serve on BD’s executive leadership team.
Grover
Grover, who has more than 20 years of experience in the manufacturing and supply chain realms, succeeds Alexandre Conroy, who will retire from BD at the end of 2022 after 31 years with the company.
Grover most recently served as senior vice president of operations for Carrier, a $20 billion company with 47 manufacturing facilities around the world. Before Carrier’s spinoff from United Technologies Corp., Grover served as vice president of global operations and systems for Collins Aerospace and held several positions with UTC Power, Hamilton Sundstrand and UTC Aerospace Systems.
“Rishi has deep expertise in lean manufacturing and supply chain operations that will continue to ensure BD is at the forefront of our industry in navigating the current environment of unprecedented supply chain challenges while we build for the future,” Tom Polen, BD’s chairman, CEO and president, said in a statement with the July 5 announcement.
Polen also thanked Conroy for his “decades of leadership and dedication to BD.”
Grover earned a master’s degree in electrical engineering from the University of Hartford, a master’s degree in systems engineering and management from Massachusetts Institute of Technology and an MBA from the University of Chicago. He earned his bachelor’s degree in electronics from the National Institute of Technology in Surat, India.
Supply-chain logistics company ArcBest is looking for a few good drivers, and it’s bringing its search to the Garden State.
Based in Fort Smith, Ark., the company announced June 16 that its less-than-truckload carrier, ABF Freight, will host a hiring event in Avenel on June 21 and 22 for full-time city drivers and participants in the company’s driver development program.
Hiring event details
June 21 and 22
7 a.m. to 7 p.m.
21 Englehard Ave., Avenel
No appointment necessary.
Driver candidates should be at least 21 years old.
The company is offering a $15,000 signing bonus for full-time city drivers and a $5,000 signing bonus for driver development program participants, the announcement stated.
“If you live in the Newark area and you’re looking to join a company with excellent benefits, frequent home time and ongoing training opportunities, we hope to see you at the event,” Seth Runser, ABF Freight president, said in a statement.
The company said the hiring event will offer assistance with job applications, interviews with ABF recruiters and potential job offers made that day.
Full-time ABF drivers and dock workers receive Teamster Union Scale wages, 100% company-paid health insurance for employees and their families, personal days, sick leave and paid holidays, and they are covered by a pension plan at no expense to the employee.
ABF Freight operates in both short- and long-haul markets across North America. The company said that it employs more than 10,000 people in over 240 locations and that 53% of its drivers have been employed with the company for more than 10 years.
A lot of things seem out of control these days. As costs rise and disruptions in the supply chain persist – and without clear-cut ends to some of the most prominent causes of those issues – the pandemic or the war in Ukraine, for example – it’s unclear how long these challenges will persist. However, there are things business owners and executives can do to put themselves on solid footing to navigate and operate under the current circumstances.
During NJBIZ’s The Future of Construction and Development virtual panel discussion experts explained where we are, how we got here, and shed some light on ways to work around and through the setbacks.
NJBIZ Editor Jeffrey Kanige served as moderator for the May 24 event, joined by:
Brad Bohler, principal, Bohler
Zachary Csik, director, Real Estate-Commerical-NJ/PA, Rockefeller Group
Kate Gibbs, deputy director, Engineers Labor-Employer Cooperative (ELEC)
Lisa Lombardo, director, Construction Law & Litigation Team, Gibbons PC
Mitchell Taraschi, co-chair, Construction Group, Connell Foley LLP
“[W]e’re really facing a perfect storm here,” Lombardo said of the current climate. She traced its start back to trade relations between U.S. and China under the Trump administration, leading directly into COVID and the disruptions the pandemic caused to production. “That was worldwide,” she explained. “So it’s not as if we can say all right, only a segment of the world is dealing with this, the entire world was dealing with it.”
And the entire world is still dealing with it, to at least some extent.
Not only have prices for commodities skyrocketed, but availability is precarious. “You just don’t know exactly what it’s going to be, and when it’s going to hit and it’s really difficult to plan for it,” Csik said of access to materials like steel, piping, roofing and even fire hydrants. Bohler agreed, pointing to swaps during construction due to delays for materials. One work around suggested by the group is to plan ahead.
Click through to register to watch the full panel discussion!
“Folks are ordering their materials in the approval process just to make sure they get in line so they’re not sitting there waiting … to go to construction for 12 months after they get their approvals,” Bohler said.
NJBIZ held its virtual Future of Construction and Development panel discussion on May 24, 2022. – NJBIZ
Taking that line of thinking a step further, Lombardo recommended ordering long lead items in advance—not hoarding, she cautioned, but warehousing the essentials, so “you have availability of materials that you know you use all the time in the industry,” she said.
An example provided by Taraschi spoke to another benefit that kind of thinking can provide: avoiding paying premium prices for the items you need. He cited an example of a client building a bridge in New Jersey. Looking ahead, the company purchased most – but not all – of the steel needed for the project when it was awarded the contract. Flash forward and today the cost of steel is almost 300% higher than it was when they purchased the initial load, Taraschi said. According to him, that issue affects all areas of the construction industry.
Another way to plan ahead, and work toward mutually beneficial outcomes, is in the contract process.
Taraschi said for existing contracts nobody wins if the situation does not work. For contracts you’re entering now, though, there are a couple things that you can do to combat pricing, supply chain and delivery issues and it all comes down to sharing risk. “You can have a price escalation clause. That’s now getting to be popular,” he explained. You can also build time into the contract for supply chain issues so that disruptions are “an excusable delay.”
“It’s all about sharing risk because … it benefits both parties to share the risk because if the owner takes a hard line now at the contract drafting stage that the contractor is going to bear that risk, what’s going to happen is every contractor is going to come to that owner with a very, very high price. So the owner is going to be paying one way or the other,” Taraschi said.
Lombardo echoed the idea of working together for mutually beneficial outcomes, suggesting that getting everyone involved in the process as early as possible can help. Having design professionals involved could assist with coming up with alternative materials or methods for getting work done. Bohler agreed, saying that some people are bringing contractors on a little earlier in the process these days, which benefits the design team as well as the developer.
And all that is in the interest of what everyone wants, especially when it comes to upgrading critical infrastructure in the state: getting the work done, according to Gibbs. She cited state legislation that allows for design build project delivery.
“Especially now with what is happening with the supply chain and price escalation, it makes more sense than ever to use this new procurement tool in order to move public projects forward as well as on the private side,” she said.
Raritan Valley Community College will offer a new supply chain management certificate of completion program, beginning this fall.
The online, 18-credit curriculum will provide educational opportunities to prepare participants for entry-level and middle-level employment in the supply chain management industry. It can be completed in two semesters and includes courses on supply chain management, transportation, purchasing, inventory management, logistics technology, and operations management.
Graduates of the certificate program will be able to apply inventory management and control concepts in planning and forecasting; explain purchasing processes, policies and procedures; demonstrate problem-solving utilizing technology in logistics and supply chain management; and compare modes of transportation and related policies.
The credits earned in this certificate program can be used toward RVCC’s associate degree of applied science in business management – supply chain option program.
Those interested in attending a virtual information session can register online. The session is slated for 5 p.m. on June 15.
Panasonic’s North America headquarters is in Newark. – CBRE
Panasonic, whose North America headquarters is in Newark, announced May 11 that its board of directors gave the green light to begin preparations for a potential stock exchange listing of the company’s supply chain management business (SCM).
Panasonic believes it can strengthen its competitiveness by enabling each operating company to act more independently. The board determined that listing the SCM business is the best way to accelerate growth.
The supply chain issue has been front and center as the world emerges from COVID-19, which has often led to shortages and higher prices. The environment has become more complex due to the pandemic, along with recent geopolitical uncertainty, and changes in consumer behavior. Panasonic determined that since the need for supply chain management solutions is increasing and the market is expanding rapidly, it means more fierce competition to strengthen R&D and invest in M&A.
Against this backdrop, Panasonic said that to elevate its business to the next level, preparing a stock exchange listing around Blue Yonder’s Saas Solutions is the most optimal way to accelerate global growth.
The company said it aims to create solutions that will revolutionize the digital supply chain through R&D, M&A and talent investments, while eliminating waste and stagnation that would reduce the global environmental footprint.
The listed company is expected to consist of businesses centered around Blue Yonder and complementary software and solution capabilities from Panasonic Connect’s Gemba Solutions Co. and Technology Research & Development Division.
The planned stock exchange listing will have to be approved by the relevant stock exchange and government agencies.
Panasonic acknowledged that reorganizations may be required. It also acknowledged the possibility that the company decides, ultimately, not to pursue the listing. Therefore, no details about the planned listing date, the listing venue or stock exchange have yet been determined.
Roadtex Transportation Corp. of Somerset has provided temperature-controlled supply chain solutions to the food and pharmaceutical markets since 1992. Nestle USA even selected Roadtex as its 2020 LTL Carrier of Year. Now, Echo Global Logistics Inc. of Chicago has taken notice of the business.
On May 5, Echo — a leading provider of technology-enabled transportation and supply chain management services — announced it signed a definitive agreement to acquire Roadtex. Financial terms were not disclosed.
“We’ve been following Roadtex and are very impressed with their capabilities,” Echo CEO Doug Waggoner said in a statement. “With this transaction, Echo not only adds a national warehouse footprint but also broadens its temperature-controlled service offerings and customer base.”
Roadtex currently has 32 food-grade cross dock facilities, and its network covers 85% of the U.S. within a 24-hour shipping period, according to the announcement.
“Roadtex brings an expertise with temperature-controlled deliveries into big box retail that few can match,” Dave Menzel, Echo’s president and chief operating officer, added. “Not only will this help Echo expand in this area, but we are also bringing on an experienced, well-regarded management team led by co-founders Bruno Ciacciarelli and Bob Kelly, and we are excited about the opportunity to partner with them.”
Ciacciarelli, Roadtex co-founder and head of transportation and administration, said the benefits of joining Echo are “substantial for our team members and clients.”
Stifel served as financial advisor to Roadtex. Kirkland & Ellis LLP served as legal advisor to Echo, and Zukerman Gore Brandeis & Crossman LLP served as legal advisor to Roadtex.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
Sign In
Free Newsletter
