A manufacturer without an efficient, flexible, and multi-dimensional supply chain will find itself quickly trailing rivals and in danger of losing market share as competition heats up in the global market, according to IDC . The IT consulting firm believes significant changes are afoot for 2013, and companies will find themselves inundated with constantly changing customer requirements that would stress even the most agile supply chain.
Any company that fails to respond swiftly to changing market demands by modifying its supply chain swiftly will fall quickly behind the competition, IDC analysts said during a recent webinar presentation on their predictions for the global supply chain in 2013. Simon Ellis, a practice director and analyst at IDC, said manufacturing companies want to increase productivity without simultaneously raising headcount, a development he tracked back to the beginning of the 1980s, and which is behind some of the consulting firm's top 10 predictions for the supply chain in 2013.
"Productivity has emerged as a top priority for companies, and we've seen a change in the way companies think about productivity," Ellis said in his presentation. "Before 1980, it used to be that productivity and compensation rose together. Since 1980, that hasn't been the case. Companies are looking for ways to drive productivity without increasing costs."
Achieving this will require a different type of supply chain system in the year ahead. Manufacturers will focus on agility in their operations but will also double down on cost reduction even as they try to meet growing customer requirement for additional services, according to Kimberly Knickle, another practice director at IDC who participated in the webinar with Ellis and Leslie Hand, research director at the company.
I was fascinated by the supply chain experts' view of what companies must do to distinguish themselves in the market and how the evolving role of customers insisting on both lower costs as well as a higher level of service is forcing manufacturers to adapt by increasing their own use of productivity enhancing tools. One critical player here for manufacturers is "big-data," the collection, analysis, and usage of which is now considered essential to supply chain success.
In recent years the amount of data available to companies about their markets, consumers, suppliers, pricing conditions, and other factors has ballooned, and so has the need for better analytical tools to segment and understand the information generated. Most supply chains in the electronics industry, for instance, now regularly generate so much data about their operations and the external market that failure to properly collate and analyze the information could put an enterprise at a disadvantage against the competition.
"The big-data era dawns for supply chain organizations," said Hand. "Manufacturing supply chains and other industry supply chains have been faced with a blizzard of data for the last five years and hadn't in the past done a particularly good job of analyzing that data. Based on their forecast we think that's really going to change."
IDC identified the following as its top 10 predictions for the supply chain in 2013. I will be looking more closely at some of these in future postings:
- Prediction 1 - Resiliency Becomes a Priority for End Users Looking to Master 'Massive Multidimensionality’
- Prediction 2 - On the Supply Side of the Supply Chain, Recognizing the Inherent Cost of Long Lead-Times, Manufacturers Continue to Look at Global Networks Through the Lens of both Regional and Country-Level Sourcing
- Prediction 3 - On the Demand Side of the Supply Chain, Recognizing the Need for Better Service Levels and Mass Customization, Manufacturers Look Again to Postponement Techniques and Data Analytics to Drive More Effective Customer Insights and ‘Smarter’ Fulfillment
- Prediction 4 - End User IT Organizations will have to Support a More Productive Supply Chain Ecosystem
- Prediction 5 - Service Excellence Becomes a Strategic Priority
- Prediction 6 - Supply Chains will Optimize Omnichannel Customer Service and Cost by Enabling Trustworthy, Efficient and Effective Supply Chains (TEE)
- Prediction 7 - End Users Will Focus Efforts to Improve Collaboration Both Upstream with Suppliers and Downstream with Customers to Better Compete in a Faster World
- Prediction 8 - Supply Chains will Invest in Technologies that Enable Visibility, Visualization and Virtualization
- Prediction 9 - The ‘Modern’ Supply Chain Gets ‘Smarter’
- Prediction 10 - The Big Data ‘Era’ Dawns for Supply Chain Organizations