May 29, 2009

To answer the question of what the future of the supply chain will be, you must get more specific.

First of all, there is no global supply chain 'system' - Most of it just happens. 95% of the supply chain in India is a guy riding his bicycle up to a small mom & pop store asking the owner if they want anything he has on the back of his bike today.

Sure there are some global companies entering the picture there, however it will take a long time, although not as long we in the US took, for India to get to the level that the US is.

And that is not to say that the US is anything special. There is still far too much waste and loss in the supply chain. We have the technology and process experience to create a smarter supply chain system. One that takes into account all stakeholders: Raw Materials Suppliers, Ingredients Suppliers, CP Manufacturers, Wholesalers, Distribution Centers, Ingredients Processors, Retailers/Wholesalers, Non-Profits and NGOs, Trade Associations, Government...and others

These stakeholders need to develop standards in the best interest of the whole 'system,' not to only one or a few participants. GCI has done some work on this. The job is not done, but it is a start.

Ralph Jacobson
Global Consumer Products Industry Marketing Executive
IBM

May 29, 2009

There are a lot of questions here, too many to adequately answer in a brief comment, but I think there is one underlying point that is missed in all of the recent discussions of our future economy in general and the supply chain specifically.

More and more of our Gross Domestic Product is being derived from 'virtual goods.'

Whether it is merely surfing on the Internet or participating in virtual games, social networks, or viewing and listening to videos and music, more and more of our economic 'goods' are being distributed electronically. No matter what the supply chain of the future looks like, it will no longer represent the portion of the economy it did twenty years ago when much more was based on the distribution of physical goods.

Bill Bittner
President
BWH Consulting

May 28, 2009

I am a believer that even the most sophisticated supply chain models are always going to be dependent on the accuracy of the forecast.

Even with automated replenishment and the most modern forecasting systems, we are in a business that continues to be fairly dependent on price promotion and supply and demand.

In my opinion, these are the most important elements in the factors affecting forecast error and supply chain inefficiencies.

I think the 2020 supply chain might be better linked to an RFID-type system that is dependent on front-end sales and automated replenishment but will still be dependent on human input into promotional forecasting.

I also think we might find ourselves in a situation where the retail inventory is vendor-owned and vendor-managed until it goes through the checkout and is reconciled electronically.

Phillip T. Straniero
Executive-in-Residence
Western Michigan University

May 28, 2009

I think Dan has it exactly right: the future of supply chain is inextricably linked to the world's future.

Last summer alone is proof of that --after all of the work that people did exporting production overseas, high oil prices suddenly made it economically viable to reopen production not only in Mexico but also in the States, and made shipping from overseas almost prohibitively expensive for certain goods.

That kind of evolution will continue. What will differentiate supply chains is how quickly they can detect these shifts and react to them. Integration and automation give us the information and speed we need to identify a trend, but if integration and automation are applied solely to make supply chains more efficient, we will miss the boat.

The future is flexibility, not efficiency. The challenge will be to achieve that flexibility without giving up the efficiencies we have already gained. That sounds to me like the supply chain game is far from over.

Nikki Baird
Retail Systems Research

May 29, 2009

UTi Worldwide Group has been working on the supply chain of the future and basically on the trends that will change the supply chain practices and landscape in the next 5 to 10 years.

No secrets, though, neither fantastic stories about super advanced technology, but at least a good thought process based on the IBM study you mentioned. We also used a PRTM study and other material from AMR Research as input together with internal and external meetings with UTi's and our clients'executives.

Here the main 8 trends we found out would make significant impact on future supply chains:

1) Flexibility & Agility To Sense & Respond To Changing Environments
2) Focus On Value Networks
3) Integrated Supply Chain View To Improve Predictability & Reliability
4) Inventory Optimization To Free Working Capital
5) Customer Centricity To Gain Market Share
6) Sustainability As Strategic Differentiator
7) Leverage Growth From Developing Markets
8) Rebalance Supply and Demand
9) Supply Chains as Shock Absorbers

Our study is summarized in a deck explaining these trends. Just wanted to double check with you if you see any alignment of this with your analysis and of course we are really interested on what comes out from your research and the final product you will present at the conference.

Eduardo Vargas
Senior Consultant, Supply Chain Design & Innovation
UTi Worldwide Group

May 28, 2009

Back to the future of Supply Chain.

Meat and potatoes, blocking and tackling, back to basics, and back to the future in supply chain.

What I see in the supply chain crystal ball is that we all will still be reliant for some time to come on the fundamentals, namely sourcing and purchase order management, global transportation, compliance and regulatory management, visibility, event and total cost of ownership management.

Above all, the requirement to successfully manage relationships will remain a critical factor in managing the S.C.not only of the present but of the future as well. What will change according to this sage of S.C?

We will, as a discipline, achieve a much greater degree of how much we will be able to integrate all the members of the S.C. We will, via technology advances, be able to pull the supply chain knot much tighter and that will enable the entire chain to be more effective and efficient. I.T. will drive this and make it all possible however, I.T. advances alone are not and never will be a panacea for supply chain execution. Rather, I.T. is a key enabler of a comprehensive integrated supply chain solution and work on this front will be ongoing as we move into the future.

The Long term fundamentals noted above will now need to incorporate sustainability considerations The S.C. is greening and this will change how we do business in the future. We will all need to ensure we are on top of this segment and become conversant on this subject matter.

The realization and recognition that oil will not stay cheap needs to be considered, as most of us have built our S.C. based on cheap oil. Now is the time to become more efficient, and plan for this reality.

Will the Supply chain ever go on auto-pilot? I do not think so. By definition, the S.C. is way too dynamic of an activity, heavily reliant on integral relationships. No surrogate for relationships indigenous to the S.C. has yet been devised nor is it very likely in the future.

Segments may become more refined and better managed etc. by various means however, until Cray builds a super duper computer that can read body language, facial expressions, discern the pitch of a voice; or until demand for all industries becomes linear, or when they raise the Titanic, I think that we can all rest assured our jobs will entail a bit more than hitting the auto pilot switch.

John Mariano
Fellowes

May 28, 2009

In my 16 years of career and number of educational degrees in different discipline; I think we are making supply chain more complex than what it is.

Two things always we have to remember financial aspect & Human aspect while thinking about future supply chain. Honesty think about any organization implements new technology or software system mostly dominated by financial and manufacturing views.

Some what I am agree with that too but truly how many organization have used cross functional across the organization and outside organization i.e. vendor and customer while developing tool? It is always simple math each of role player wheather inside or outside of organization have to perfom their part absolutely 100% and understand immediate upstream and down stream effect, better communication can solve atlest 50% of our problem or risk in supply chain management.

For this need to educate people in all because supply chain is only area which highly dependent on others with too many responsibIlity with too little authority or voice then anyone.

Mehul S. Pandya
Buyer
Award Windows

May 27, 2009

I believe cash will still be king and efforts to create efficiencies will reign.

Not all companies are able to pursue newer technologies to advance their supply chain performance, however, most companies, are driving cost and complexity out of their processes as a way to improve their financial performance.

A company's business model will dictate whether or not a Supply Chain strategy can support an increased lead time as a trade off for increased financial performance -- we are in the process of rationalizing our service portfolio and comparing proposed models against cost to serve data with the hope of providing differentiated services as well as decreased costs.

Loire Marteney
Customer Logistics Manager, Americas
Novozymes A/S

May 28, 2009

I would have to say that Wal-Mart's retail link replenishment system is pretty close to state-of the art that you are going to get today. I can see what I sold yesterday in the store, I can tell what I have in the store, the DC, I can see it all.

Having this information does allow us to service the business at maybe a higher lever than a customer that we don't see this level of detail.

When the market place is stable things run smoothly. Today a competitor drops a hot price at going from $3.80 a unit to $2.25. I can see tomorrow that my sales may have slowed a little or drastically. With a call to the field I know what is going on and make my adjustment to the supply chain. I did not see that coming! Still have to react!

I think that the bottom line is that no mater the supply chain you will not have control of all of the variable, there is always going to be a level of the unknown. The key is to be able to identify the anomaly as quickly as possible, make a decision and set motions in action.

Forecasting would be easy if it wasn't for promotions’and merchandizing!

Thanks for your great insight!

Supply Chain Manager
Food/Beverage Company
Name witheld by request

May 27, 2009

Certainly continuous supply chain visibility of more granular data supported by robust rules engines will yield many more situational/localized optimization opportunities. Look for a wider application of rules based pricing that adjusts dynamically to both supply and demand at the point of purchase.

Jim Uchneat
Business Development
Viewlocity