It’s been proven that supply chain risk events can cause a company’s stock to tank and company to lose market value. Now enter the new supply chain risk market makers: the channel checkers. These are the analysts who follow large manufacturing firms’ supply and demand and make a living out of predicting whether production plans are increasing or decreasing. In an article in today’s WSJ, Supply Data Now a Focus of Probe, several such channel research firms are being investigated for possible violation of insider trading rules. Are these firms turning into market makers who cause stocks to go up and down?
Some feel that the insider trading investigation has gone too far in implicating research firms. Certainly these research firms can manipulate stock prices with their reports. While I’m not sure where one draws the line in these cases, I am bothered by the sheer parasitic, non-value added nature of such activities. Making money from both predicting and manipulating the market at the same time? Well, this is America, as some like to say. While channel checkers can create wealth for themselves and those who buy their research, they don’t create jobs.
Manufacturing is an engine of wealth and jobs. For example, the fact that Massachusetts’ jobless rate has remained lower than the rest of the country and is decreasing more rapidly has been attributed to the growth of its manufacturing sector. I wish more resources and focus would be placed on the manufacturing sector. In a blog post on the future of manufacturing, Robert Reich once asserted that “it doesn’t make sense for America to try to maintain or enlarge manufacturing as a portion of the economy.” Unfortunately, this point of view seems to be fairly widespread in our society. Manufacturing is dirty and working-class, while service jobs are more preferable. Having worked in manufacturing, I can attest that this belief is simply not true.
I was recently in Shanghai where I was giving workshops to several groups of supply chain and purchasing executives. Every single workshop participant worked for a manufacturing company, many of which were the Chinese plants of multinational corporations. When I give talks or workshops to groups in the U.S., there is no longer a group composed of 100% manufacturers. The rapid economic growth that manufacturing is fueling in China is palpable.
It strikes me as sad that we’ve got the channel checkers and China has the manufacturing.