Search
or Search by TOPIC
Search Supply Chain Videocasts
 
 
  Sign-Up Free Newsletter
 
   
   
     
  Supply Chain Trends and Issues: Our Weekly Feature Article on Important Trends and Developments in Supply Chain Strategy, Research, Best Practices, Technology and Other Supply Chain and Logistics Issues  
 
 
  - Feb. 3, 2014 -  

Predictions from Supply Chain Gurus for 2014 - Full Text Version

Complete Predictions from Mike Regan, Gene Tyndall, Art Mesher, Dittmann and More

 
     
     
  by SCDigest Editorial Staff  
     
 

Last week, SCDigest editor Dan Gilmore highlighted supply chain predictions for 2014 from a number of supply chain gurus. You can find that column here: Supply Chain Guru Predictions for 2014.

As promised then, we are also offering the full text comments from each of our gurus.

SCDigest Says:

If a carrier's costs are going up by 5% and management expects you to reduce costs by 5%, how will you satisfy your CEOs, or COOs demands to lower your freight costs?

 

Mike Regan


Click Here to See Reader Feedback

This week, here are the full text predictions from pundits Gene Tyndall, Mike Regan, Art Mesher, Marc Wulfraat, Karin Bursa, and Jim Barnes. Good stuff.

 

Next week in Gilmore's First Thoughts column we are going to highlight a few predictions from leading supply chain analysts.

 

So let's get right to it, starting with Mike Regan.

 


Predictions for the Trucking Industry

Mike Regan, TranzAct Technologies

 

As we head in to 2014, here are a few of stories shippers and motor carriers will be reading about throughout the year.

Prediction # 1: Capacity issues become a big deal

Even as we approached 2014, the big story over the Christmas holiday was the "hiccup in Santa's supply chain." His reindeer were overwhelmed, and the last minute holiday volume meant Fed Ex and UPS couldn't get all of their Christmas packages delivered. This highlighted the finite capacity that currently exists in the transportation sector.

Capacity will be a big story because in 2014, shippers will experience firsthand the correlation between economic and freight activity. Experts have predicted that if we saw sustained growth in the GDP of 2.5% or higher, shippers would have a hard time finding trucks to move their freight. Guess what? We have hit the 2.5% number and saw gains in the certain trucking indexes last November and December, which showed improvements in year-over-year data for the industry. The improving economy will result in more tonnage to haul and signals a warning to shippers: Expect to see higher rate increases in 2014 if you want to secure capacity from your carriers.

Understanding the capacity issue is pretty simple. First, carriers have not been adding capacity in their fleets, as the anemic economy of recent years has lessened the demand for trucks. With supply and demand factors in balance, carriers have not been able to get the type of rate increases they need to earn the financial returns they need to justify expanding their fleet.

Second, the War on Trucking is real, and it is negatively impacting productivity in the trucking industry! The FMCSA's Hours of Service rules, which became effective in July, 2013, are impacting truckers, and there are more rules and regulations to come. In 2014, the FMCSA will be issuing their proposed rule for Electronic On Board Recorders, (EOBR's). They will also look at how trucking companies should address driver health issues such as Sleep Apnea. The ATA's recent (and outstanding) Regulatory Update Webinar highlighted additional big issues affecting trucking companies. Together, these factors mean it will be more costly to operate a truck, as tighter capacity enables carriers to be more aggressive in passing increases through to shippers.

Third, capacity will be affected by continued carrier consolidation. Industry experts have predicted that an improving economy will cause trucking company owners to look to "head for the exits"—a.k.a sell their companies. That prediction is becoming a reality, and we will see an increasing number of acquisitions in the trucking industry. As acquiring carriers rationalize the procured networks, shippers will have fewer options.

Finally, on the LTL front, shippers (as well as other LTL carriers) will breathe a sigh of relief that YRC has, (despite the momentary setback with the Union vote in January) reached agreements with their lenders and unions, which gives them some breathing room. As one senior executive for a major LTL carrier pointed out, "bad news from YRC would be very disruptive for shippers and carriers."

Prediction # 2: Look for a gradual but significant shift in LTL carrier pricing strategies

In 2014, expect more carriers to move away from shipper-based FAK or multi-tiered FAK rate structures. LTL carriers will push for traditional class-based rate structures, or alternatively, a density-based pricing structure that more accurately reflects the actual freight being placed on their trailers.

The change in LTL carrier pricing strategies will be fueled by the investments carriers have made in equipment and technology that accurately "dimensionalizes" the freight that they are hauling. Well run carriers know how much of the trailer is being utilized for your freight. By including this data in their Operating Ratio calculations, they can determine account profitability.

As capacity tightens, look for LTL carriers to seek higher rates--especially on accounts where the operating ratio is 110 or higher - or seek incremental charges for cubic capacity/dimensional freight issues. Additionally, expect LTL carriers to be more aggressive with accessorial charges as they look to be compensated for how their equipment is being used and for additional demands being placed on their drivers.

Carriers who have invested in Big Data technology capabilities will be the second driver of changes in LTL carrier pricing strategies. Shippers who negotiate with carriers once or twice a year may not understand how the carriers' investments in Big Data technology have changed the negotiating process. For example, carriers have a much better understanding about how a shipper's freight "fits" in their network.

Consequently, they will continue to shift away from market-based pricing, where the carrier bids to capture volume, to network-based pricing, where the carrier bids based on how the shipper's freight fits in the carrier network. Practically speaking, this means shippers may have to consider using more carriers in their bid process, or make sure they are including the right carriers as defined by their ability to handle freight in pre-defined lanes.

Prediction # 3: More rules and regulations from the FMCSA, but no legislation on a new highway bill to replace MAP-21

In the 4th Quarter of 2013, the NTSB's focus on trucking safety did not get much attention. After a couple of high profile accidents involving trucks, the NTSB questioned whether the FMCSA was doing enough to keep unsafe trucks off the road. Expect the FMCSA to respond to the NTSB's concerns about safety in the trucking industry with more aggressive enforcement proceedings.

In 2014, the debate will continue over the FMCSA's CSA program. Some CSA critics argue that the CSA program is ineffective because the data is not accurate and is being used against truckers in litigation. Critics on the other side will argue that it is ineffective because the FMCSA is not using the data to more aggressively target carriers with unacceptable scores for enhanced proceedings or additional enforcement (e.g. more field audits). To quell the criticisms, the FMCSA will want to prove that it's committed to its (unrealistic) goal of getting every unsafe truck off the road.

On the legislative front, MAP-21 expires on September 30, 2014. Politicians will pontificate about the significance of our national transportation infrastructure and the importance of creating jobs and improving our economy--and then do nothing about it. Everyone wants better roads and bridges, but nobody wants to pay to get it done.

In 2014, you'll read stories about funding our highways through a Vehicle Mileage Tax (VMT); increasing the gas tax, or alternatively taxing fuel at the wholesale level; variable tolling; or tolling existing interstate highways. But remember this: nothing is going to happen! With no new Highway Bill to replace MAP-21, the government will, as it did in 2009 - 2011, be funding our nation's transportation requirements based on Continuing Resolutions. It's a terrible way to manage this critically important part of America's future. But with a mid-term election in November, there won't be enough politicians to vote for anything that resembles a tax increase - even if it is for something as essential as our Nation's Transportation Infrastructure.

The failure to act on a new Highway Bill will also doom common sense legislative initiatives such as the push for increased weights (that is being led by the Coalition for Transportation Productivity) or the push for an increase in trailer length for tandem moves (from 27 feet to 33 feet). Each one of these initiatives would increase trucking productivity, improve safety and annually save billions of dollars for our country. That said, nothing will happen in 2014 on these fronts.

Now for some practical advice for transportation and logistics professionals as you manage your transportation costs for 2014: Fasten your seat belts! With a recovering and improving economy, here are two things that will warrant your attention. First, tighter capacity means freight increases may be in the range of 4% to 6%; rates that are higher than you may have included in your annual budget. Second, higher than anticipated costs may draw an increased level of attention from C-Level executives with one question on their mind: What are you going to do to reduce freight costs?

And that "What are you going to do about it?" question highlights a paradox that logistics and transportation professionals will be addressing in 2014: Transportation If a carrier's costs are going up by 5% and management expects you to reduce costs by 5%, how will you satisfy your CEOs, or COOs demands to lower your freight costs?


Predictions for Supply Chain Strategy

Gene Tyndall, Tompkins International

 

I am pleased to offer my predictions for Supply Chains in 2014. Waiting until mid-January to provide a 2014 Outlook has the advantage (or disadvantage) of being able to read the dozens of other views and predictions already out there. Whether the predictions are in general for supply chains, by industry segment, by technology, by solutions, or by market, the number and variety expand each year.

As a strong advocate of working with smart strategies, and especially the right Operations strategies, I will comment on top priorities for CSCO's and other C-Levels who drive Operations. To focus this discussion, I would like to refer to 2014 as the "Year of the Customer". Not to adopt the Chinese tradition of naming years; but to emphasize the dramatic changes we are seeing and expect to see increasingly focused on the "customer experience". It has been several years since we have seen the customer treated so prominently in almost every industry, and actually driving new strategies.

While companies have evolved over the past 10 years to mass merchandising, large volume orders, standard operating practices, and marketing demographics (thus the push to "Big Data") not so quietly recently has come the trend toward personalization, which is so needed to appeal to both consumers and businesses alike. We all know that the Internet changes everything, but no one has been certain how the opening up of multichannels would impact selling, ordering, fulfilling, delivering, and satisfying. Amazon continues to exceed all predictions of growth - and the selling of "everything from A to Z" has proven that both B2C and B2B are wide open for growth on the Internet.

So, the "Year of the Customer" will see massive changes of Operations strategies - which determine capabilities, business and operating models, customer experiences, and supply chains - not just by retailers, and CPG companies, but by all businesses. These "personalized omnichannels" will dominate the supply chains going forward, as having too many choices translates into operational challenges. How can we personalize our sales and marketing, and related operations, without changing our supply chains? It just cannot be done.

Let's consider 5 big predictions for Supply Chain Strategies in the Year of the Customer:


1. All companies will have to deal with personalized multichannels - not just retailers
. The opening of an online market for any company's goods, no matter who does that, creates the need for new supply chain Operations. While the business strategy determines what products will be sold in what markets, and why customers will buy them, an Operations strategy MUST determine the capabilities needed to meet the service promises. This is every company's business model and operational challenge.

2. How will companies deliver to personalization and still remain profitable? It is well known that the cost of customer services can easily overrun the cost of infrastructure and processes. It takes superior skills to balance these two, and we will see new tools and models for dealing with this vis-à-vis online ordering growth. The new "holy grail" of supply chains is more than balancing supply and demand - it is balancing costs vs. services, again. And, yesterday's Network Planning models do NOT fit this issue. Modern network design considers both costs and services, and profit contribution. This requires scenario evaluations, and creative ones at that. Fulfillment centers must be different than distribution centers made for "pallets-in, pallets-out"; furthermore, they may need to be in many different locations. Capital investments need to be made carefully, as markets and customers change more frequently. Supply chain "flexibility" will finally become more required, not just visioned.

3. Customer Experience Management (CEM) will become the buzz word in 2014 for the new business and operating models. While CRM has fueled relationships, CEM will fuel personalization. This will give rise to customer innovations such as those being led by Amazon - e.g., same-day delivery, Sunday delivery, alternate locations, consolidated orders at shopping Malls, expanding product lines, new delivery methods (drones?), and beyond. Innovating the customer value proposition (why buy from us?) will become necessary even for survival. We have already seen Retailer examples of this (Best Buy, J.C. Penney, others) so get ready for much more. The Dell strategy of "transform, connect, inform, and protect" has relevance for everyone.

4. Expect another year of disruptive technologies that impact the customer. New technologies and its creative uses such as robotics, mobile Internet, social media, near real-time supply chain demand-driven, POS unified transactions, and "Connecting Everything", will impact supply chains and their capabilities as well. Again, finding ways to improve services, while not raising prices out of market, and still earning profits, is the NEW CHALLENGE. The only way to do this is to introduce new technologies that are smart and enhance productivity. The Supply Chain strategy issue is what do we need and how do we determine that? These are strategic choices to be made by the CSCO and his/her peers, and not by other corporate interests.

5. And, far from least, is the process for defining operations strategy itself. Before, supply chain leaders drove their networks and processes by demand forecasts out 2-4 years. Supply chains were there to "deliver" as expected. But, something happened and the "expected" has all too often not occurred. Not only is this due to the rapid expansion of online ordering by consumers and businesses - but it is also due to more rapidly changing market conditions - for example, the economy, business and community relocations, the near-shoring, the product proliferations, the many pharma drugs coming off patent, the changing preferences of customer groups (and within groups), and new product flows, and other factors.

 

Business strategies are there to be enabled by supply chains. Yet surveys are finding that many supply chain managers do not believe that their supply chains are connected directly with strategic enablers. This is sad. CSCO's need to change this attitude. The operations strategy needs to define what capabilities are needed to enable the business strategy and how to get them. This is the new CSCO agenda.

I hope these predictions for supply chain/operations strategies help supply chain leaders better prepare for 2014. When we anticipate certain trends, we can develop plans to deal with them; when we are surprised, we end up "fighting fires", which unfortunately is too often the situation in today's volatile markets.

 


General Supply Chain Predictions

Art Mesher, just retired CEO, Descartes Systems

 

In marketing, students are taught the governors of marketing in a framework called the four P's: price, place, promotion and product. In supply chains a similar framework is defined as the three V's (visibility, variability and velocity).

 

In 2014 it will become clear that constant presence of networks and the transparency of supply chain channel members will create a new world of concurrent engineering and omni channel behavior that will drive "clean slate" supply chains (i.e., physical and systems reinvention). Marketing and supply chains will mesh over networks and become structurally co-dependent. Thus, we will see the birthing of a new set of governors of "web commerce" - four new peas in a new a pod: proliferation, presence, proximity, and personalization.


To be present, proximate, personal and prolific


The proliferation of the microprocessor (technically) new distributed machinery ( e.g., 3D printers) and business suppliers (physically and systems) and their presence on "the network"s will become a major driver of supply chain behavior, as the always on always connected world creates a new world transparency where there is no where to run and no where to hide, service and pricing becomes transparent, and qualities are instantly exposed (e.g., likes and dislikes in Facebook). Capacities and capabilities are instantly searched and found and commerce enabled. Within process and discrete component assembly manufacturing , the reduction in the gap of wage differences from first and third world nations, will force the need for new and real productivity improvements.

The most common denominator in the past to optimize supply-chain and manufacturing was through cost, but not the actual process or delivery. With network presence you make nodes addressable and more important, understandable. This is where without understanding the details of supply chain and production, you can't design the most competitive products. Integrated product development and concurrent engineering is what is being enabled broadly with presence, when applied with analytics and marketplaces.


Proximity is rapidly changing supply chain landscapes


While the last two decades saw the development of long supply chains ( the slow boat from china) the very recent re industrialization of domesticated economies ( near shoring) and the desire for immediate delivery of goods and services in a omni channel environment will lead to the re emergence of the "local stocking location". While logistics control systems to manage long supply chain systems have been in vogue, these systems will wane in popularity and necessity as the the new and fad de jour challenges will be to optimize service policies in short high velocity supply chains without the inflation of assets ( inventory, warehouses or fleet cost). Real time location based services will become new drivers of velocity and community coordination as my trucks next door can a take your load today" becomes much more feasible.

Personalization of product, personalization of fulfillment‎, personalization of delivery will be key themes going forward. I want this product bundled with that product and I want it delivered to my house every month one the third Tuesday between 2 and 2:15pm…The give me what I want, when I want, the way I want any time I want it new world order will require a much tighter view of service policy optimization and asset utilization and will lead to new systems and supply chain designs driven by proliferation, presence, proximity and personalization.

 

Most current systems are like 8 track cassette players in their notion of future obsolescence as they were not designed to be social extended, proliferated, personalized or even networked, and as such we will see many new "clean slate" systems and services vendors develop solutions to satisfy requirements in these arenas. Like a feeding piranha, they will take small bites out of the market individually but in mass can fell large prey ( SAP, Oracle, etc.).

What if you could take everything you learned and start over? What would you see differently? How would you think differently? What would you do differently?


(Supply Chain Trends and Issues Article - Continued Below)


 

 
 
CATEGORY SPONSOR: SOFTEON

Learn More about Softeon's Innovative Supply Chain Solutions

 


Predictions for Distribution Center Operations

Mark Wulfraat, President, MWPVL International Inc.

 

 

Retail is the frontline of distribution. Changes taking place in the retail sector ultimately impact suppliers upstream within the supply chain. The notion of Amazon same day delivery is now causing order cycle time (i.e., speed) to be a strategic focus for retailers. This subsequently increases pressure for faster response throughout the supply chain. This in turn has an impact on how distribution centers are operated, not just for e-commerce fulfillment centers but in many different industry sectors. In other words, a domino effect is taking place.

Companies are seeking ways to accelerate order turnaround time as a means to increase competitive advantage. Place your order today by 2PM and we will ship tomorrow is no longer good enough - it has to ship today. This pressure to accelerate speed impacts all players in the supply chain because as soon as one competitor raises the bar then the others must follow lest they lose market share. This is important because it creates the need to increase throughput capacity within a smaller time window which implies that traditional conventional operating processes are an impediment to success. This explains why we are seeing a significant increase in capital spending in material handling systems that enable faster throughput, improved accuracy, with less people - namely automation and any related technologies that increase speed and throughput capacity. Front and center - three technologies that we believe are poised to take off over the coming years are:

1. Make to order packaging: The order management system and/or warehouse management system communicate to an on-demand case-making system to produce a custom carton size for every order in advance of packing. For any high volume shipper that currently ships using standard carton sizes, this innovation takes out cube, lowers the cost of shipping, speeds up the packing function, reduces shipment damages, and reduces waste. Staples deployed the technology with equipment from Packsize International in facilities shipping 3,500 cartons/day and one machine can produce up to 300 cartons/hour. This one is a no-brainer to be looking at.

2. Goods to person (GPS) automation systems are hot
and we expect them to get a lot hotter, especially if the automation system enables: minimal risk of downtime, ease of redundancy, flexibility to expand and adapt to growth, and ability to maximize space utilization. It is important to cover all of these bases or the value proposition is lessened. For example, multi-shuttle and robotic systems that are being used to semi-automate split case picking environments are amongst the most exciting technologies to arrive in our industry in the past twenty years. The next evolutionary advancement will be the automation of the physical split case picking process such that a stationary robot positioned at a work station will reach and grab products from a donor tote and put products to the right shipping carton. This requires a combination of visual recognition technology and robotic technologies using grabbing or electro-static suction but eventually they will figure it out and it will be cost justifiable. It's happening now and we can expect to see this unfold over the next 5-10 years.

3. Wearable computing technology: Think Google Glass. This one has the potential to be a major game changer in distribution centers around the world. Imagine warehouse operators putting on wearable glasses at the start of their day. Using a combination of voice, put to light, bar code scanning and photo capture technologies - they interact with the WMS throughout the day. But wait - the technologies are built into the glasses and everything is virtual. Operators receive and confirm instructions with wearable technologies. Put to light displays are no longer physical -they are now virtual. Bar code image capture and recognition are now hands free. Sound futuristic? It's not. This is where things are going and quickly. Invata is a company that is already on top of developing first generation solutions in this area and I expect that leading edge distributors will be embracing this type of technology within the decade. This technology has the unique potential to take out expensive hardware and leapfrog us into the next generation of the technology curve. As importantly, it is a technology that has the potential to be accessible and affordable to companies of many different sizes in many different industries.


Predictions on Supply Chain Priorities for 2014

Dr. Paul Dittmann, University of Tennessee

 

What are top strategic challenges facing supply chain professionals in 2014? Sure, supply chain professionals need to worry every day about cutting cost, reducing inventory, and making sure customers get served on time and complete with good quality. Engulfed in this daily maelstrom, do they ever have time to reflect on strategic challenges? If not, they become like the hapless frog in the "frog-boiling story." (Put a frog in boiling water, he jumps out. But, place him in cold water and then raise the temperature one degree a minute and the frog eventually boils.) Strategic issues must be addressed to avoid a company's supply chain getting boiled like a frog.

We recently surveyed a 120 participants from 46 companies gathered at our Supply Chain Forum, and in addition, we surveyed 26 senior (VP level) executives from our Global Supply Chain institute Advisory Board.

The top strategic challenges ranked in order of importance are:

1. Acquiring, retaining, and developing supply chain talent:
It's no surprise that talent management is number one. But acquiring talent is only the first step. Leading firms retain top talent by having plans to develop and provide the right challenges for its future leaders.

2. Developing a comprehensive, multi-year supply chain strategy. Few would argue that their supply chain is a critical, and maybe the prime driver of shareholder value. Therefore, it is shocking that our surveys show only 15% (one in six) firms have a documented multi-year supply chain strategy.

3. The Global Supply Chain: managing global supply chain issues. The economics of global outsourcing and global sourcing are clearly changing, and the risk seems to be increasing. The outsourcing trend is slowing as companies consider more near-sourcing options. However, global supply chains will be always be with us. Companies need to make them as efficient as possible, by streamlining product lines and applying Lean techniques to minimize cycle times.

4. Demand-Supply Integration: How do we manage horizontally when all companies are organized vertically? This is the fundamental dilemma of business. Getting the supply side aligned with the demand side in companies, and further with the financial goals is the ultimate challenge in many companies. Second generation S&OP (sales and operations planning) or IBP (integrated business planning) is the right approach to achieve this goal, and manufacturers are ahead of retailers in implementing it.

5. Managing partnerships with suppliers and customers. Companies have been talking about collaboration for years, but sadly when all was said and done, there was a lot more said than done. However, win-win relationships are becoming increasing more common. The concepts of paying for results not activities; focusing on ‘what’s in it for we’; and common shared metrics based on a foundation of trust hold the key to breakthrough performance.

6. Network Optimization: achieving an optimized DC network. Most firms face questions like: "How any DCs should we have; where should they be located; and what customers should they serve?" Questions like these must be answered in an optimal way if a company is to survive and thrive in the brutally competitive global environment. These projects are complex, cross-functional, and require masses of cleansed data. However, the payback from the effort has proven to be well worth it in many companies.

7. Managing risk in the supply chain: Supply chains are at risk, especially global supply chains. Tsunamis, floods, political unrest, currency swings, labor issues, even pirate attacks are high profile reminders of the risk facing global supply lines. Few companies have a formal risk management/mitigation process in place to manage supply chain risk.

Firms face a long list of strategic supply chain challenges, but according to our surveys, the above seven are the most important areas to address now.


Predictions for the Retail Supply Chain

Jim Barnes, CEO, enVista

 

Amazon will not be using drones anytime soon, although the 60 Minute interview with Jeff Bezos was a great publicity stunt, I am confident that Amazon and others will develop a last mile delivery strategy that is less dependent upon the FedEx and UPS duopoly by utilizing either their own carrier network or partnering with regional couriers and carriers. Amazon like other larger e-com companies (Walmart.com) cannot afford to put all their eggs in one basket with UPS or Fedex. Therefore look for Amazon to become more vertically integrated….last mile delivery costs can be as high as 20% of a e-com's OPEX and therefore there lies the opportunity for costs reduction by becoming vertically integrated or positioning more inventory closer to the customer (pick up locations).

Retailers are struggling with how to develop a synchronized omni-channel strategy, specifically in the area of inventory visibility and allocation across channels. I predict retailers will look at a nwe class of solutions that provide a hub for order and inventory orchestration solutions, relegating traditional ERP solutions to back office functions.

CIOs don't have the appetite to spend millions of dollars replacing their ERPs but feeling the pressure from their CMOs to find ways to market and sale to their customers anytime and from anywhere. Traditional retail ERPs lack the flexibility and are not engineered to allow a CMO to develop a competitive and innovative omni-channel strategy and have it deployed in weeks.

 

These new solutions will move beyond Distributive Order Management (DOM) and becomes the hub to manage and maintain items (catalogues), orders and inventory, fulfillment from stores and vendors, cross channel business intelligence, and reporting.

Last I predict more technology consolidations as the larger software companies like JDA, Oracle, IBM and VMWare acquire smaller boutique and strategic providers. The larger software providers want to provide an E2E solution suite and hence the acquisitions are filling functional or technology gaps. This however leaves the mid-market space wide open for new technology solution providers to enter the market. Hence consolidation (implosion) leads to explosion of new providers servicing customers that can't afford the Tier 1 providers or don't want partner with the larger providers.

I see that retailers will focus on improving the "Velocity Capital" by improving the flow of inventory from supplier to customer. Hence the need for merchandise planning, inventory optimization and improved inventory allocation across channels to meet the demands of their customers.


Predictions for Supply Chain Technology

Karin Bursa, Logility

 

Two supply chain themes that will gain increasing traction in 2014 are scenario assessment and the ability to strategically leverage analytics.

 

Supply chain planning has long been seen as a way to enable efficiency and reduce costs while improving service levels. In 2014, supply chain planning is becoming a strategic partner to the business and a way to both boost revenue and increase margins. As supply chain capabilities mature, your team s need the ability to model multiple scenarios that consider a broad spectrum of capabilities and response for variability in demand, sourcing, production and distribution. The end result is better information, less risk and a higher level of confidence in the decision-making process. Comparing multiple supply chain scenarios also gives you the ability to modify and reassess the global network as business and market conditions dictate.

 

Today's supply chains are more complex as we segment customers, markets, channels, and suppliers to drive more specific, and ultimately higher, accuracy through our planning processes. This agility and insight provides game changing supply chain results.

 

Supply chain analytics are also gaining increasing traction in 2014. Supply chain planning applications provide a a treasure trove of data, but many companies struggle to understand how to assess and leverage it.  Supply chain analytics help to rapidly transform this data into actionable information that can be leveraged for both strategic and tactical advantage.  Whether your planners are working against a prioritized list of alerts to help focus their time on areas of the greatest opportunity or evaluating demand and supply plans against the current S&OP plan for trend analysis, analytics are quickly becoming an important part of daily activities. 

 

With built in supply chain analytics, you can compare your current plans with corporate objectives and financial goals, identify trends, and provide a visual snapshot of the business that management can drill into for greater insight. Putting the right information to good use in a timely manner is going to be key this year and moving forward.

 

The coming business cycles will reward companies that plan for multiple scenarios and effectively use the right data to achieve lower costs, better service and higher margins.

 


 

Hope you enjoyed this year's guru predictions.

 

Any reaction to any of these 2014 predictions? Let us know your thoughts at the Feedback section (email) or button below.


SCDigest is Twittering!

Follow us now at https://twitter.com/scdigest

 
 

Recent Feedback

 

No Feedback on this article yet

 

.