In late 2009, based on a presentation I had done for a conference, I came out with a list of 10 fairly specific predictions for what I thought would happen in the supply chain by 2015. Have subsequently given versions of this presentation a number of times.
As I said then, it is easy to give vague predictions about the future, and very safe to say we are going to get more integrated, more collaborative, more optimized, etc. We will. But getting beyond that level of prediction gets a lot harder, and just as tricky is timing. This stuff is going to happen eventually - but when?
So I put myself out on something of an analytic limb with these 10 predictions about things that would happen by the end of 2015, which were:
1. A majority of companies will have reconfigured their supply chain networks: Many companies have supply chain networks developed for a different era. Fuel prices, green SCM concerns, virtualization and more will lead many to fundamentally rethink those networks over the next few years.
2. Supply chain planning and execution will start to blur: A topic we covered in detail in a major report, the need for response based on market demand and other factors is outstripping current planning cycles. Tactical and even some operational planning become completely intertwined with execution, causing changes in organizational structures, processes and technology.
3. We see substantial drops in overall inventory levels: Inventory levels have remained flat for many years now. But the lessons of this recession - that maybe we can get by with less combined with supply chain simplification programs and new technology - really will drive step change drops in inventory levels by 2015.
4. Web-based supply chain software comes to dominate the landscape: I haven’t completely been on this bandwagon until recently, but by 2015, this is how it is going to be – which has many major implications. More confident of this than about any other prediction on the list. Once this becomes the lead approach for almost all vendors, the shift will happen rapidly.
5. Green drives transportation collaboration: The logic of transportation collaboration and the financial benefits haven’t done it. The capacity crunch of 2005-06 almost did, but then that went away. Green will finally do the trick, and we will see much more cross company load-linking and even sharing of capacity between competitors. But does this commoditize logistics?
6. Visibility to everything, all the time: The technology is really here now to have it, and despite RFID’s current lack of direction, it will become very commonplace by 2015. Understanding what to do with this information is the real challenge.
7. Common deployment of real-time performance management: Scorecards are rear-view looking; dashboards help you make decisions right now. A few companies have already developed these kinds of capabilities; they will be widely deployed by 2015.
8. Distribution centers will take one of two paths: Lean and un-automated (and very flexible), or automated to a level hard to imagine today. Again, something else we have written about in the past. The robots are coming.
9. Supply chains focus turns to emerging markets: This is simply where the growth will be – perhaps explosively so. This will impact product design, pricing, logistics and much more. Those that get it right will have huge corporate advantage – as companies like Procter & Gamble smartly focus on “micro-logistics.”
10. Digitization increases impact on the physical supply chain: A tsunami wave of digitization is happening, dramatically impacting physical supply chains, often in not obvious ways. We all know that itunes is putting CD makers out of business, but that filters down to record stores and even producers of the plastic resins used to make CDs. Think the future is bright for watch and mid-level camera makers when you will have both in your cell phone? I have many more examples. Look forward on how your company – and your career – might be impacted by digitization.
So, how am I doing? I am going to grade myself. Naturally, SCDigest readers can also give me a grade.
1. Re-configured Networks: Kind of a no brainer, in a sense, and happening apace. Gartner in one of its "predicts" for 2011 noted basically the same thing. Many networks will look quite different by 2015 for both current coast and globalization reasons.
2. Blurring of planning and execution: Absolutely happening, and accelerating. Technology is driving it. Factories are being dynamically rescheduled multiple times per day by some companies, as just one example. Operational planning and execution are becoming one. Need to change org structures to truly leverage.
3. Inventory levels will drop: Cautious yes, but data is inconclusive. Not sure if predicted drop in SKU counts will stick (see WalMart's retrenchment). The curve is shifting, but may not be as pronounced as I predicted by 2015.
4. Cloud-based software dominates: A definite yes, in my opinion, and am more convinced than before. It is better in the end for everyone, vendors and users, though whether it works for complex, multi-app optimization is still unclear.
5. Green drives transportation collaboration: Well, it may not be just "Green," but I do think we will finally see a lot more of this by 2015, though perhaps a bit less than I expected. Still, there are signs. Kraft's "collaborative transportation engineering." A pilot program currently under way in the UK for multiple consumer goods companies to ship to retail in one truck. It will happen, and have a profound impact on logistics - and careers.
6. Turbo-visibility: Happening faster than even I expected. More on this soon.
7. Real-time dashboards: Coming on strong too, though some people still confuse dashboards and scorecards. Technology is not the challenge now, but what data is needed for better decisions. True dashboards are the next logical direction after scorecard work becomes largely done.
8. Two paths for DCs: I am a little less sure about the "two-path" aspect as I am about coming new generations of very highly automated DCs. This is happening, with a number of adoptions already and more coming, driven largely by automated case picking (ACP). May take a little longer, but I am convinced it will be fairly commonplace by 2015, at least in terms of new facilities in high cost markets.
9. Supply chain focus on emerging markets: There sure isn't much growth in the US and Europe. Note P&G and WalMart's (separately) aggressive investment and thinking in these areas. Companies are (e.g., Siemens) regularly announcing new product designs for the less wealthy - and even poor - consumer/businesses. Not unrelated to point #1 about reconfigured supply chain networks.
10. Digitization and the supply chain: There is a finite end to this at some point, but we are nowhere near it. Just think, for example, the impact that cell phone payment systems are going to have on many other physical supply chains (credit card makers, POS terminals, check companies, etc.). There are hundreds of these examples. Be looking over the curve as to how it could affect your company and career - often in not immediately apparent ways (e.g., you supply magnetic stripe encoding systems to credit card companies).
So, I gave myself a pretty good score. Timing may be a couple of years off on a few of them. But I am biased. You can let me know your grade.
How do you think Gilmore's predictions for 2015 made in 2009 are holding up? Let us know your thoughts at the Feedback button below.