More on Megatrends:
I read your Megatrends with interest and agree in principle. In addition, I would include the following items:
1. Financial Supply Chain - bridging the gap between financial and physical SC, which will change the way corporates are financing business activities.
2. Business Continuity Management (BCM) - Globalization entails risk and corporations need to become smarter in assessing geo-political and socio-economic risk factors, not to mention the 'day-to-day' risk factors contained within any SC. Contingency planning is still pretty much in its infancy and more often than not restricted to IT.
Personally I'd include environmental issues such as carbon footprint within BCM, given that before long, legislative measures will come into force, mainly as another source of revenue (environmental tax, etc.) which impacts on the SC.
Your description of the Megatrends is accurate and I am looking forward to see the next five Megatrends described.
My question would be how you rate the importance of 'global supply chain footprint', means how a company masters to find the right setup between managing the supply chain and distributed physical planning and execution across continents. China, Offshoring, Outsourcing play a major role, as well as being able to meet customer demand more quickly (e.g., through an optimized network design).
In addition I would like to get your opinion on the influence of private equity activities on global supply chains? M&A and more short-/medium term profit focus is having significant impacts as well.
A thought on Megatrends to add or maybe frame your list as I have had this vision for past 10 years in watching how a lot of US businesses fail to understand value creation vs. short term SEC profits.
Last night I heard 5 analysts on CNBC describe how they expected the US to lose our #1 super power status to China in 30 years or so. They likened it to the way the US usurped the British at the turn of the 20th century at the end of the industrial revolution. They went on to make it clear as investors they see obvious signs that China, Japan, Northern Europe etc. all make it easy for their business to setup domestic operations in the US, but make it hard for US business to do the reciprocal in their countries. One investor, a former professional football player, took it one step further that the US should be using maximum negotiating leverage with China prior to next year's Olympics as the need for China to show “off” prior to the Bejing Olympics as this might be the best negotiating leverage the US has in the next decade. Not sure I agree, but was encouraged to see the competitive spirit.
So here is my Megatrend - that I think translates all the Megatrends back to the average US business / consumer – at some point in the next few years and makes supply chain leaders a lot more strategic than getting the next box out of the DC.
If business leaders and our political statesmen do not act now to leverage the supply chain for US business - worker competitive advantage, we will see the US prosperity engine increasingly unwind and erode and likely at an increasing rate. The fact the Japanese, Koreans, Northern Europeans and now Chinese can do business very effectively on our shores with equal access as US business, yet US flagged business continually struggle to do the same creating domestic domiciled equal footing in these countries, further compounds the trend. I have written extensively on one simple concept US business could use to compete (Domestic Postponed mfgr of offshore components) which all the international competitors use effectively on US shores (e.g. Auto assembly, hi-tech assembly, now appliances etc.). Even dedicated a not-for-profit web knowledgebase www.Texaslcc.org to the education first driven by philanthropic work we have done with the Texas governor’s office, local workforce boards and US dept of commerce and labor.
DCRA Inc’s exposure is US managed business continue to struggle with the concept – often lured by “just make the whole thing in China” CFO mentality and ship a lot of air in containers not realizing the risks to IP, costs, competitiveness, ability to tailor / modify / localize products. I find it part arrogance and part just lack of international multi-continent business exposure but am quite sure it is the mega trend of all mega trends for the US and North America. I don’t find many supply chain pros with this perspective but they don’t often have a strong enough voice to counter the quick profit leadership in charge.
One presidential candidate described all this as the US prosperity engine we have enjoyed since WWII, which was fueled by making things (manufacturing) adding value and taking on tough problems. Engineering business to “win” in global supply chains is the new key to unlock the next generation of the prosperity engines – thus a business Megatrend that encapsulates the right skills and practices in global supply chains. The 5% of top global business already knows this (e.g., Ikea, Phillips, Cisco, Dell, P&G, Nike, etc.) and use to drive global profits… when will we see this trend used to drive US competitiveness ?This is the mega trend I am quite certain has been on us for 5 years or more, yet I am still watching for – yet see little action to address - from our business leaders and statesmen.
Keep up the good work at SCDigest!
I agree with your choices, but I would add one more, Risk in Supply Chains. If risk is volatility, not pursuing a strategy that reduces it in global supply chains would be harmful to both the customer, creditor, shareholder and capital communities. Recent events, tainted fish, lead paint, toothpaste while clearly indicate a breakdown in quality control; these products were carried form producer to store shelf before discovery. I think supply chains have to get be involved.
More importantly, current generation supply chains are built for efficiency. Perhaps, with a risk component at the product level, supply chains will be split in two—efficient and responsive, where the responsive one is geared to key customers, gross margin, shareholder value.
John A. Deasy
The Transitions Group
A Supply Chain Risk Advisory Business