Thankfully, the learned analysts, writers and soothsayers I follow aren’t quite as depressing. Let’s take a look at what some of the modern day prophets have been saying and the common themes that appear.
In the tradition of David Letterman, (in no particular order) let’s hit the Top 10 Supply Chain Predictions for 2012.
10. Supply chain risk will not go away
At the start of 2011, I wrote a blog (Supply Chain Risk and Charles Darwin) that highlighted 2010 as the worst on record for supply chain disruptions. Little did we know that 2011 would bring earthquakes in New Zealand, a tsunami in Japan and record floods in Thailand which, looking back made 2010 look like a cake walk.
Therefore it is not surprising that focusing on managing and mitigating risk across global supply chains appear on most lists. As Gartner predicts “Supplier risk will continue to be a major focus, and companies will look to technology for a scalable risk assessment and management solution” (Predicts 2012: Supply Chain Predictions: Talent, Risk and Analytics Dominate: Published: 18 November 2011).
IDC (Worldwide manufacturing supply chain 2012 top 10 predictions) agrees, saying “Risk Management will mature as a focus area for supply chain segmentation”. I think Adrian Gonzalez (in his Logistics Viewpoint blog) summarized the situation very well when he commented “risk is supply chain’s middle name. Companies that manage supply chain risks effectively will outperform those that ignore or are blindsided by them”.
9. Entering the “era of big data”
With the availability of data (both structured and unstructured) at an all-time high from all areas of the supply chain (demand signal repositories, RFID tags, GPS tracking, Smart Meters, etc.) the focus will migrate to leveraging data as a competitive advantage . This was well described by Lora Cecere of Altimeter Group (Supply Chain Shaman blog) who stated that “the concept of the big data supply chain is the evolution of technologies to harness the explosion of data and new data sources to drive a near real-time response”. However, IDC warns “Big data will create an even bigger data quality problem for manufacturing supply chains”.
8. Supply Chain “clock speed”
It’s no secret the pace of business is accelerating and 2012 will not see this changing. The reality is that today’s supply chains are expected to be more responsive to change. Changes in supply, demand, or changing economic factors, the old adage still applies to supply chains: “only constant is change itself”. In the IDC Manufacturing Insights Predictions 2012, Simon Ellis of IDC explains the importance of finding ways to better align the clock speed of supply with the clock speed of demand in an effort to become more responsive. Ellis said this defining comment came from a Heinz executive (SAP Influencer Summit: The Need for Speed!) who observed that his company thinks about speed on two dimensions: the speed of the initial IT implementation and the decision-making to support the ongoing business.
7. In-Memory technology enters supply chain space
When (clock) speed meets big data, the need to analyze massive amounts of data for instant business insights is required to transform organizations into a real-time business. As Bob Ferrari (Supply Chain Matters blog) predicts “Wider scale leveraging and adoption of in-memory computing technologies among enterprise and specialty supply chain vendors, coupled with broader leveraging of data mining, have the potential to be game changing influences on supply chain business planning and response management”.
6. Supply chain visibility and analytics
The old adage of “you can’t manage what you can’t measure” certainly holds true when it comes to predictions. Bob Ferrari talks about the concept of a “supply chain control tower’ coupled with more leveraged use of predictive analytics coming to the forefront. Gartner also predicts that by 2016, “50% of Gartner’s Top 25 will rely on predictive analytics to further exploit low-latency, network-based data” (Predicts 2012: Supply Chain Predictions: Talent, Risk and Analytics Dominate: Published: 18 November 2011).
5. Social supply chains
I recently posed the question “Are you ready for the social supply chain?”According to most pundits, the answer is “YES”. With an estimated 1.2bn people (20 per cent of the world’s population) on social networks, we are at a point where social software capabilities need to be prevalent throughout enterprise systems. And increasingly, we are accessing this social network through mobile devices. As Adrian Gonzalez (Logistics Viewpoint) stated “Companies will continue to adopt social media tools in supply chain and logistics processes.” He pointed to a proof point that “it was standing room only at the social media in supply chain management session I moderated at the CSCMP Annual Global Conference this past October”.
4. Supply chains in the cloud
In another blog I joked that Santa was the 1st supply chain “in the cloud”. However I believe that we will start seeing more applications and deployments leveraging this approach moving forward. In Supply Chain Matters, Bob Ferrari predicts that “Cloud computing and managed services options directed at enabling supply chain business processes will continue to gain more traction”. IDC agrees that “Cloud applications for supply chain will move from a total-cost-of-ownership focus to a total-value-in-ownership Focus.” Adrian Gonzalez of Logistics Viewpoint concurs: “Traditional enterprise and supply chain software vendors will accelerate their investments in cloud computing and software-as-a-service”. He references two proof points from SAP, namely the acquisition of SuccessFactors, and the investments in B2B connectivity with its acquisition of Crossgate.
3. Collaboration is key
As supply networks become more global and more organizations turn to outsourcing, networked business environments are becoming the norm (see Collaboration – The new battle cry of supply chains). To improve performance, businesses will continue to strategically partner with suppliers and other supply chain participants to collaborate and share information. As Adrian Gonzalez of Logistics Viewpoint said, “When it comes to collaboration, more companies will start to ‘walk the talk’.” He believes companies know they’re leaving money on the table by not collaborating more effectively with suppliers, customers and industry peers. Over the past two years, however, sparked to action by the economic downturn, companies are revisiting collaboration.
2. The customer is (still) king!
With the world population now past seven billion – with 20% of those having access to the internet and social networks – the global end consumer is now more connected, informed and demanding than ever. Gartner (and formerly AMR) have long bestowed the virtues of a Demand Driven Supply Network and most, if not all the other analyst firms are in agreement. For example, IDC predicts the “factory of the future will be driven by capabilities to fulfill customer demand rather than pure production capacity”.
1. Sustainable and compliant supply chains
As cross boarder trading rises (a necessary evil of Globalization) so does the incidents of counterfeit products, cargo theft and other scurrilous. Bob Ferrari claims this “will finally motivate government and industry to step-up process standards and corrective mitigation efforts” in 2012. This was also a talking point for Lora Cecere (Altimeter Group) who is predicting a focus on “safe and secure supply chains” due to changing legislation for serialization in pharmaceuticals and food safety in global supply chains.
A famous Chinese proverb says “May we live in interesting times.” Like it or not, we do live in interesting times. If possible, I’d make this my 11th prediction. If the past few years are anything to go by, a new challenge will arise in 2012 to make the life of a supply chain practitioner “interesting.” Let’s just hope it is not as “interesting” as Nostradamus or the Mayans predicted!