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Top 10 Predictions for the Supply Chain in 2012

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Материал из категории  News of logistics (in English)
12.02.2012 22:57

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2012 will see the consumer take a more prominent role in directing the course of supply chain management, as volatile demand has become the new norm.

In late-2011, IDC Manufacturing Insights spoke with technology vendors, consultants and buyers about what 2012 will hold for manufacturing supply chain organizations. The result is our 10 predictions for 2012. The predictions reflect a mixture of supply chain, IT and emerging agenda topics, framed by the four forces of IT as articulated by IDC Manufacturing Insights: mobility, big data, cloud and social business.

Manufacturing supply chains continue to be affected by both internal choices and external forces, and as we move into 2012, IDC Manufacturing Insights sees a number of major industry trends that we expect to impact both the behavior of the supply chain and the resulting IT investment priorities:

--  The “rise of the consumer” is more obvious in some manufacturing sub-segments (i.e., consumer goods, consumer electronics, automotive) than others, where there seems little question that the “power” now resides with the consumer who uses ubiquitous access to information to make more informed decisions and purchases through the use of mobile and social business tools.

-- Complex and extended global supply networks are a consequence of globalization and the chase for “low cost” manufacturing. The reality is that many manufacturers now experience significantly longer product lead times than ever before, driving a level of complexity in the supply chain that can prove problematic if agility and responsiveness are required.

-- Volatile demand is the new norm. Consumers are less brand loyal, and far more selective, than ever before — and, frankly, are willing to “leave their wallets at home” if the value they require in a purchase is not apparent. Peer reviews and recommendations are driving brand switching, and private label choices are becoming more popular. All these conspire to drive forecast accuracy down and demand volatility up.

-- The accelerating pace of business is putting pressure on manufacturers to be more agile and run the clock speed of their supply chains more quickly. Many businesses are facing sub-48-hour order lead times, often with poor supporting capabilities.

-- Inflation and direct input costs remain a concern for manufacturers that lack the ability to make price increases stick or are already at a cost disadvantage versus the competition.

At the core, though, the challenge — and opportunity — for manufacturing organizations is to better manage the inherent friction between the supply and the demand sides of the supply chain. Indeed, the supply chain is increasingly defined by these two halves, and they are operating at two very different clock speeds.

The past five years have brought dramatic change to the manufacturing supply chain — more so, perhaps, than any other five-year period in recent memory. From 2008 to 2011, IDC Manufacturing Insights identified an annual theme that we felt would drive supply chain activity and IT investment for the year. Even if not all of the detailed predictions for each year under these themes have come to pass, the broad themes have proven to be instructive:

2008 — cost centric, but thinking about speed, flexibility and service

2009 — financial crisis and manufacturing slump drive efficiency in assets, inventory and supply chain modernization

2010 — evolving from fixed-cost-driven supply networks to variable-cost value networks

2011 — supply chain complexity, balanced with the need to simplify and segment

For 2012, IDC Manufacturing Insights sees a focus on speed and responsiveness across the demand and supply sides of the supply chain to support the intelligent economy. Building on 2011, then, and our view of the overall state of supply chains moving into 2012, here are our top 10 predictions for the year:

1. Manufacturers Will Focus on Clock-Speed Alignment across the Supply and Demand Sides of Their Supply Chains. As we move into 2012, increasing demand volatility and supply complexity threaten to create higher and higher cadence mismatches, to the point where cost performance and service levels will really begin to suffer; consequently, we expect manufacturers to focus on better aligning these internal clock speeds.

2. The Requirement for Speed and the Ubiquity of Information Will Create a New Landscape for IT Support of the Supply Chain. The accelerating pace of the business is also affecting how IT operates and, specifically, how IT supports the supply chain organization. The cadence mismatches that we discussed in the prior prediction apply equally to IT, which is also expected, and required, to deliver faster and more nimble capabilities and tools.

3. Big Data Will Create an Even Bigger Data Quality Problem for Manufacturing Supply Chains. 2012 will be the year when manufacturing supply chains recognize the data quality challenges inherent in big data and begin to take the necessary steps to ensure that the capabilities that emerge are supported by a solid data foundation.

4. Supply Chain Organizations Will Rediscover the Need for Differentiation — What Does My Supply Chain Stand For? Are we a product-focused organization, with the overriding goal to produce the highest-quality products possible to the marketplace (and to the consumer)? Are we a cost-focused organization, with the overriding goal to produce competitive products at the lowest possible cost? Are we a service-focused organization, with the overriding goal to deliver the highest service levels in the marketplace?

5. Risk Management Will Mature as a Focus Area for Supply Chain Segmentation. What we have been hearing from some manufacturing companies in 2011 is the notion of looking at risk management as another dimension in how they look at supply chain segmentation, and that leads us to our prediction that in 2012 risk management will mature as a focus area for supply chain segmentation.

6. As Manufacturers Adopt S&OP, Integrated Forecasting Capability Will Facilitate Progress in Responsiveness. At the same time that clients are inquiring about sales and operations planning (S&OP), they are also wrestling with the question of best-of-breed versus an integrated planning approach. While S&OP has, in the past, been largely the purview of the small, niche software vendor, that is no longer the case, with market-leading options now available from the larger, platform vendors. One consequence of this is the appeal, then, of the integrated planning platform as a way to better align demand and supply and come to a consensus view — rapidly and repeatably.

7. Manufacturers Will Continue to Look at Extended Lead Times as a Source of Cost and Rethink Sourcing Approaches Where Necessary. Supply network structures do not change overnight, and traditional cost views still predominate, but we have seen manufacturers view lead time through the lens of supply chain segmentation and expect to see more of this in 2012.

8. Cloud Applications for Supply Chain Will Move from a Total-Cost-of-Ownership Focus to a Total-Value-in-Ownership Focus. IT budget pressures will continue to motivate CIOs to look in increasing numbers at cloud computing and focus on TCO, but it can be so much more than that. We would advocate taking a total-value-of-ownership approach to cloud offerings and indeed think this is what manufacturers will start to do in 2012

9. Manufacturing Supply Chain Organizations Will Focus on Fulfillment Excellence as Service Performance Grows in Importance in a Consumer-Centric Marketplace. While cost remains a critical factor, many companies are thinking about how to embed a service centricity. Combine that with the increasing pressure for compressed order lead times, mass customization, and the “need for speed,” and we end up with a focus on fulfillment excellence.

10. Supply Chain Organizations Will Get Serious about New Product Development and Introduction with the Adoption of PLM Tools and a Focus on Clear Internal Business Process. For many manufacturing segments, portfolio churn puts a great deal of pressure on the innovation process, not only to deliver future revenue and profit but to not soak up too much of the company’s resources in doing it. Manufacturers need to do a better job of early recognition of products with low potential (that should be killed off quickly) versus those with high potential (that should be fast tracked).

The manufacturing industry has played a significant role in the economic recovery to date, with a prominent lead in activity, profitability, technology investment and job creation. Although company revenue and profitability numbers appear to be back to prerecession levels, there is still a reluctance to declare a full and complete recovery, and it is important to acknowledge that the industry is never going back to the operating conditions that predated the recession.

Supply chain organizations have been taking and will continue to take a targeted approach to IT investment priorities and capability development, while attempting to better manage the complexity inherent to their demand and supply structures. It has also become quite clear that companies must find ways to reconcile the cadence mismatches that exist between the supply side (supply complexity) and the demand side (demand volatility) of their supply chains if they are to successfully compete in the intelligent economy.

 

Source: http://mhlnews.com/


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