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Focus: Supply Chain Trends/Issues

Feature Article from Our Supply Chain Trends and Issues Subject Area - See All

From SCDigest's On-Target E-Magazine

Feb. 2 , 2011

Full 2011 Supply Chain Predictions from the Analysts at Gartner, IDC Manufacturing Insight


The Smart Guys and Gals at Both Firms Look into their Supply Chain Crystal Balls


Supply Chain Editorial Staff

For the fourth straight year, SCDigest Editor Dan Gilmore asked a number of Supply Chain pundits to make predictions for what is likely to in supply chain and logistics management in 2011. Gilmore summarized the highlights of those predictions the last two week in his First Thoughts columns, which can be found here: Supply Chain Guru predictions for 2011, Supply Chain Guru Predictions for 2011 Part 2 . Last week, we ran the full text comments of our guru panel - see Supply Chain Guru Predictions for 2011 - Full Text Comments.

As promised, this week we publish more detail on the interesting predictions from our friends at analyst firms Gartner and IDC Manufacturing Insights.

Gartner (which of course now includes the former AMR Research) put out two sets of predictions for 2011 (and beyond): one for overall supply chain management, another for global logistics.

The supply chain predictions were compiled by analysts Tim Payne, Mickey North Rizza, Noha Tohamy, Dwight Klappich, William McNeill, and Chad Eschinger. They include the following prognostications:

    • Supply chain leaders will focus on redesigning their demand management processes and technology to help drive stronger market insights.
    • Determining how to manage supplier risk will become a key requirement for leading organizations.

    • Supply chain management (SCM) technologies based on software as a service (SaaS) and the cloud will continue to gain traction, but mainly in process areas, with strong alignment to the unique characteristics of these delivery models.

    • Although in the last couple years the pendulum has swung back to favoring best-of-breed (BOB) SCM applications over ERP, supply chain leaders have identified a successful hybrid model that leverages the power of both.

    • Supply chain segmentation is gaining traction in the business, and leading companies are figuring out how to formalize the process to make it consistent and repeatable.


Gartner follows that with the following planning "assumptions":


    • By 2015, demand-driven value network (DDVN) leaders will have re-architected their demand management organization, process and technologies.


  • By 2012, 50% of supplier management applications will have dynamic supplier risk mitigation capabilities.


  • By 2013, the market for cloud-based SCM technology will have grown by 100%.


  • By 2013, over 60% of DDVN Leaders will exploit a hybrid ERP-BOB application portfolio strategy.


  • By 2014, 75% of DDVN leaders will have a formalized supply chain segmentation methodology in place.


We will explore some of these Gartner specific predictions and assumptions in more detail in the coming weeks and months.


Gartner's global logistics group, including analysts Dwight Klappich, Greg Aimi, Jeff Taylor, and William McNeill, offers 2011 predictions that include the following:

    • Supply chain security has taken a back seat to cost reduction during the last three years. A major port disruption is likely within the next five years, however, which will force SCM organizations to formalize risk management.
  • "Co-opetition" — notably, partnering with potential competitors — will become a transformational SCM strategy, allowing early adopters to move beyond incremental performance improvements.


  • In media and related businesses, the move to digital SCM will reshape SCM strategies and practices in over half the companies in these industries during the next five years.


  • Growth in consumer classes in emerging markets will reshape supply chain networks, forcing multinational organizations to overhaul their supply chain networks.


  • Supply chain process outsourcing will become a strategic mandate as leading practitioners move toward lead logistics provider (LLP) relationships.

That in turn also leads to a set of planning assumptions, as follows:

  • By 2015, a major port security disruption will force companies to formalize supply chain risk management programs.
  • By 2015, co-opetition will become a differentiating best practice in best-in-class logistics organizations.


  • By 2015, over 50% of physical supply chains will be replaced by digital supply chains in media-related industries.


  • By 2015, consumer class growth in emerging markets will threaten the supply chain network designs of two-thirds of multinational companies.


  • By 2015, 20% of Fortune 2000 companies will orchestrate strategic outsourcing relationships with Lead Logistics Provider partners.

(Trends Story Continues Below)




Predictions from IDC Manufacturing Insights


The top 10 supply chain predictions from

Over the past few years, IDC Manufacturing Insights has done an excellent job in making predictions for supply chain for the coming year. For 2011, those include the following from IDC analysts Simon Ellis and Kimberly Knickle:

Prediction #1: Manufacturing supply chain organizations, recognizing the inherent complexity in their global supply chains, will look for ways to drive out unnecessary complication through segmentation, simplification, and the use of more practical analytics.


Prediction #2: IT vendors will continue to develop BI and analytics tools that enable manufacturers to improve decision making at the strategic, tactical, and operational levels.

Prediction #3: Although demand forecasting continues to be important, supply chain organizations will begin to recognize the critical role of supply-side responsiveness.


Prediction #4: Supply chain visibility will climb on the IT application priority list as manufacturing companies increasingly identify critical use cases to drive both cost savings and improved service levels.


Prediction #5: In the context of taking a broader view of total cost, supply chain organizations will gain a new appreciation for shortening lead times through profitable proximity sourcing strategies.


Prediction #6: Cost containment, and the desire for variable supply chain structures, will continue to drive outsourcing of operations, but will also bring a more enlightened perspective to SaaS and "skills resourcing."


Prediction #7: Supply chain modernization will pick up speed again as manufacturing companies look to drive fulfillment excellence through transportation, warehouse, and labor management tools.


Prediction #8: As manufacturers increasingly outsource manufacturing and expand in emerging regions, they will search Global Headquarters for ways to improve information sharing and support more organic collaborative processes across the extended supply chain.


Prediction #9: Value chain captains will put a stake in the cloud to level-set technology capabilities, with focus on aligning with the "clock speed" of the supply chain.


Prediction #10: Manufacturers will invest in learning how to incorporate mobility applications and smart devices into the supply chain while balancing IT management concerns with employee enthusiasm.

That's it for our guru predictions for 2011. We hope you have enjoyed them.


Which of the Gartner and IDC predictions to you think are most spot on? Any clunkers? Let us know your thoughts at the Feedback button below.


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