I spent a few days recently at a conference listening to how some world-class companies are investing and improving their supply chain visibility and analytics. It's not only limited to hi-tech products, but also across-the-board from beauty products to grocery stores. Projects in this area kicked off more than a year ago when the economic outlook looked a little unclear, yet these companies forged ahead with their plans and are now netting tangible, positive results. What can we learn from their approach?
Recently, the supply chain functions of companies have become increasingly linked to customer experience. I'm not sure if most people think of Amazon as a supply chain and distribution company, or simply a company that has just about everything anyone could want, from physical to digital. It's a good example of how supply chain directly affects customer experience. Add this experience to the revolution in digital delivery of content across the web and mobile networks, and we all expect instant inventory and next-day shipping. The personal shopping experience is now setting the same bar in the business-to-business (B2B) space.
All of this is driving the need for better tools — analytics, demand management, logistics management, sales and operations planning (S&OP), and so on. All of this costs money, so my question is: Is it time to invest?
How do things look in the macro economy? I was dissecting some data from the Economist Intelligence Unit, and listening to some of their analysts, and while they are not hugely enthusiastic, there is a very positive trend under way and a forecast for modest growth across the world, including Europe. The Euro area, while forecasted at -0.5 percent in 2013, is forecasted for 0.7 percent growth next year.
In 2014, there is not a major economic area in the world that is forecasted for a negative trend, which sounded simple to me at first, but compared with the past 36 months, it's a very big change.
We all look at the US and China as leading indicators, and while China is coming down from double digit growth over the past few years, the 7.0 percent 2014 forecast is still substantial due to the increased size of the base economy. The US, with its continued loose monetary policy (all agree this can't continue) turned in a very good annualized growth number of 2.4 percent in the last reported quarter. The 2014 forecast is 2.6 percent.
Even with all of the turmoil in the world, the macro numbers encourage me. I am largely convinced that now is the time to invest and to make some big, innovative changes in our supply chain capabilities that will directly, and positively, impact our customers.
What do you think? Share your thoughts below.