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STOCK SUMMARY
Nasdaq 2778.79-34.90
S&P 500 1295.22-9.64
Armstrong 43.33-0.11
The Bon-Ton Sto 3.70-0.32
Harley-Davidson "45.27
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Hershey 67.41-0.94
Penn National G 44.52-0.23
Glatfelter Comm 14.93+0.22
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Weis Markets Inc"44.63
 
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October 10. 2011 12:00PM - Last modified: October 10. 2011 12:32PM

Hershey not alone in logistics restructuring trends

By Jim T. Ryan

Dauphin County-based The Hershey Co. isn't alone in its recent announcement that it will partner with Italian candy maker The Ferrero Group to save money on their logistics. Alliances, supply chain savings and new growth are high on the priority list of many large global manufacturers, according to a recent survey.


About half of companies surveyed said reshaping supply chains was a top priority, according to KPMG, a Netherlands-based cooperative of tax, auditing and business consulting firms.

Thirty-nine percent of large manufacturers said they will invest more into and expand cost-containment efforts in the next two years, nearly on par with research and development efforts at 35 percent.

Part of that equation is reducing volatility by shortening supply lines as transportation becomes more expensive, according to the survey. That means increased buying from countries closer to end markets in developed nations, according to the survey.

KPMG's 2011 Global Manufacturing Survey also found:

  • 53 percent of executives were "optimistic" about their company's growth prospects over the next two years, compared with 51 percent a year ago.
  • 25 percent were "very optimistic," down two percentage points from a year ago, reflecting some caution among large corporations.
  • 41 percent of companies expected new business growth to come from U.S. markets, slightly edging China at 40 percent. Germany and developing nations India and Brazil also were big for top growth potential.
  • 36 percent of companies said they planned to increase sourcing from the U.S., second to China at 42 percent. India, the United Kingdom and Brazil round out the top five.

KPMG surveyed 220 executives from global companies with at least $1 billion in revenue. Hershey had net sales of $1.3 billion in the second quarter of this year.

Last week, Hershey and Ferrero, the maker of Tic Tac and other candies, announced they would form an alliance to share warehousing, distribution and transportation costs for their North American businesses. The companies said they would begin to see unspecified savings on logistics by next year.

Hershey representatives did not immediately respond to requests for more information on the Ferrero deal.

Derry Township-based Hershey's shares are traded on the New York Stock Exchange under the ticker symbol HSY.


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