Round-up re: Globalisation

Well just thought I would collect some of my posts about Globalisation, interspersed with random headlines. Note that the inability of Proctor and Gamble to see the upcoming inflection point is not surprising–none of their competitors really saw it coming either. This ties in exactly with Seadrome planning. But I find it encouraging that they are trying to re-examine their business network, realizing that we are at an inflection point. So they are trying to imagine what P&G will look like in 2015. Scenario planning, anyone?

My Post:

From Great Cover, Wrong Article 13 September 2006

Or the fact that the cheap energy that has kept cotton going to China from Texas to be made into T-Shirts, and then back again to be sold at Wal Marts that Americans get to in their SUV’s, has just come to an end?

And the realization by all except a very few oil-industry lobbyists that even if cheap oil wasn’t coming to an end, the environmental costs of it are just way, way too high?

Random Headline:

Oil costs force Procter & Gamble to rethink supply network
Jonathan Birchall & Elizabeth Rigby / Cincinnati June 28, 2008, 0:11 IST

Soaring energy prices are forcing Procter & Gamble to rethink how it distributes its products, with the world’s biggest consumer goods company shifting manufacturing sites closer to consumers to cut its transport bill.

Keith Harrison, head of global supply at P&G, the maker of Tide detergent, Crest toothpaste and Pampers, said the era of high oil prices was forcing P&G to change.

“A lot of our supply chain design work was really developed and implemented in the 1980s and 1990s, when our capital spending was fairly high as a cost of capacity and oil was 10 bucks a barrel,”

“I could say that the supply chain design is now upside down.”

My Post:

In Rita, educating us all 29 November 2006 I quoted an earlier comment I had made, in January of 2006, briefly describing some of the new topology of the world economy:

John:

It would seem that the types of global organizations that will arise from this effect will be massively decentralized, with the flow of information dramatically increasing, while the flows of manufactured objects reducing, and commodities becoming more dear, rapidly and temporarily in some cases.

The really interesting thing, once we get past the immediate and obvious effects on the price of commodities is the effects on Science and Technology, as replacements for certain commodities are sought, and the R&D funding for replacements becomes economically sound.

The re-localization of manufacturing seems to be another developing trend here, with the only necessary global flows being of IP.

Posted by: enigma_foundry | Sunday, 29 January 2006 at 03:32 PM

EF. You are exactly right. Resilient decentralization is the inevitable long-term answer. Unfortunately, it’s not something that most people want to hear.

Random Headline:

Oil hits record above $142 a barrel

By Chris Flood

Published: June 27 2008 09:01 | Last updated: June 27 2008 20:57

CBOT July wheat rose 8.5 per cent this week to $9.40 a bushel, amid growing concerns about the outlook for Australia’s crop.

Oil’s strength and dollar weakness helped gold, up 1.4 per cent to $924.95 a troy ounce on Friday. Gold gained 2.7 per cent over the week, helped by renewed buying interest as the dollar retreated against the euro following the Federal Reserve’s statement on Wednesday, which suggested an imminent rise in US interest rates was unlikely.

Among the base metals, copper rose 1 per cent to $8,520 a tonne over the week while aluminium dipped 0.6 per cent at $3,120 a tonne.

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Round-up re: Globalisation

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