Advertisement

Blog

Top 10 Supply Chain Predictions for 2013

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 {complink 7014|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

64 comments on “Top 10 Supply Chain Predictions for 2013

  1. ITempire
    December 23, 2012

    I agree that electronics industry has so much data at its disposal which if organized in a more result oriented manner can give insights about the ways in which supply chain can be made more efficient terms of reducing lead times, attaining lower cost purchasing and increasing service levels for priority customers.

  2. ahdand
    December 24, 2012

    Isnt this a pleasing sight for the eye ? I see this as a very good sign since this shows that there is a big hope for SCM and the predictions are done in a very highly promising manner.

  3. Ariella
    December 24, 2012

    I'd bet on #10. I'm not quite as certain about the others.

  4. Ashu001
    December 24, 2012

    Ariella,

    Beats me why you like Point No.10 so much.

    I think Big Data is heavily over-rated and just a buzzword…

    In my opinion,Points 4-8 are all very ,very relavant for most organizations today.

     

  5. Ariella
    December 24, 2012

    @tech4people Perhaps I'm biased because I write about big data and analytics elsewhere. It's not just hype; there really are a lot of big data projects going in on in business, healthcare, and government. 

  6. Ashu001
    December 25, 2012

    Ariella,

    Yeah I realized that one!

    The thing which struck me was primarily this-Most of those Projects are entirely Government funded intiatives.

    And most Western Governments[incl. US,UK,Japan,France] are all practically bankrupt today ;its only a matter of time before they cut funding for all these grandiose projects.

    [When it comes to choosing between paying Angry Pensioners and paying for Grandiose Projects;Governments are not gonna have much choice going forwards here]…

    Which is why I thought Points 4-8 make more sense.Especially those funded by Private Sector initiatives.

    Regards

    Ashish.

     

  7. Anna Young
    December 25, 2012

    WaqasAltaf.  Absolutely, Data analysis will not only assist in the decision making system but will more importantly act as a supporting tool.

  8. Himanshugupta
    December 25, 2012

    Anna, which ones are most promising and happening predictions in your opinion. The main themes seem to be efficiency, collaboration and data mining.

  9. Ariella
    December 25, 2012

    @Ashish Businesses are also looking into what big data can do to improve their own performance. I saw a response to those who think that the hype holds little value in this blog.:

    A simple Google search can generate countless similar examples of companies that are generating business value by leveraging Big Data insights. The mass of these success stories could prove the tipping factor that sways executives hesitant to invest in Big Data initiatives – and convinces them to equip their organizations with advanced analytics software.

    More Users, More Data

    If Big Data's detractors – and supposedly, there are a few (although I couldn't identify any via a Google search) – aren't convinced by the actual success stories, maybe they will alter their views as they realize Big Data is expanding and digital engagements are increasing.

     

  10. Ashu001
    December 25, 2012

    Anna,

    Quite right!

    The decision making tool is key!!!

    If you can make the right decision easily and much faster after going through tons and tons of Data(a large chunk of which is totally useless);you can definitely count on such a product doing very,very well.

     

  11. Ashu001
    December 25, 2012

    Ariella,

    I am not for even a second trying to doubt the effectiveness of the Best Big Data tools.

    What I am more intrigued by is where is the Money Gonna come from?

    From Funding these Big Data Initiatives??

    Please don't tell me its gonna be Printed from Thin Air like what our Genius Central Bankers at the Federal Reserve are doing today!!!

    Regards

    Ashish.

  12. Ariella
    December 25, 2012

    @Ashish But the government must be printing it from thin air. After all the US government is running at a huge deficit but is planning to spend over $4 billion on big data projects. Businesses are another matter, though. I'd imagine they work it out as part of their research and development budget. Those who use it for marketing may be take the money from their marketing budgets. And those who use it for customers service or business development may allocate some of the funds bookmarked for those areas.

  13. Houngbo_Hospice
    December 26, 2012

    By the way, where does the big data come from in the electronic supply chain? I do think that big data holds good potential for most businesses nowadays, but I don't think that big data will play an important role in the electronic supply chain in 2013? If I am wrong, please tell me why a how this will happen.

  14. Houngbo_Hospice
    December 26, 2012

    @tech4people,

    “The decision making tool is key!!! “

    You are right. But does this necessary have any thing to do with dig data? Companies have been relying on predictive tools for years in their decision making processes, long before the advent of big data.

  15. Taimoor Zubar
    December 26, 2012

    Companies have been relying on predictive tools for years in their decision making processes, long before the advent of big data.”

    @Hospice_houngbo: Yes, companies have been making decisions but their decisions had little involvement of data and more reliance on intuition. Even if there was a large amount of data, it was difficult to organize, arrange and make sense out of it. Big data allows better utilization of data and in a much faster way. So you spend more time on decisions and less time organizing and manipulating data.

  16. Taimoor Zubar
    December 26, 2012

    @Anna: I'm not sure if I understand what a smarter supply chain would be. Does it refer to the fact that it will make use of more advanced devices and tools? Or is it referring to the supply chain becoming more driven towards AI and decisions are automated?

  17. ITempire
    December 26, 2012

    @ Hospice

    There is a lot of potential to extract various types of data for decision making that can make same supply chain function more efficient. How ? For e.g. in a situation where there are many suppliers that have lower costs and apparently they look the right option to choose but there may be certain suppliers with higher costs but very little lead time and that timely delivery of goods can increase stock turnover for the year hence increase revenue and profit and offset the higher cost. However, it is only possible to highlight such an opportunity if right data at the right time is available. That's just one example that I quoted.

  18. ITempire
    December 26, 2012

    @ Hospice

    “You are right. But does this necessary have any thing to do with dig data?”

    It is debatable. Today a large number of company are using big data as an input to the decision making tools. If they are taking amazing conclusions out of such data, then a company that is behind in that aspect can even lag behind in the competition. Having said that, solely on the basis of big data and quality output generated by the decision making tool and without effort on the part of other functions, it is not possible to gain success.

  19. ITempire
    December 26, 2012

    @ tech4people

    We must appreciate that it's not the just the countries that you mentioned are running the show for big data and data analytics' projects. Countries like China and India should be counted on when we talk about any IT sector. As far as China is concerned, I believe it has got the funding to build on these projects. We might not get to know the developments over there because there hardly is any news about China in the English language and on most-watched media stations.

  20. Anna Young
    December 26, 2012

     HH, Big data has the potential to give a company an edge over its competitor if the data collated is adequately utilised. For example, Electronics Supply Chains industry have in times past generated so much data about their operations, i.e. the markets, consumer behaviours, suppliers, pricing conditions and have failed to use them. Now it's become vital that if these data's are not adequately analysed and used, it may put such company at a disadvantage against its competitors in 2013 according to experts.

  21. Anna Young
    December 26, 2012

     You're correct in saying that companies have used alternative analysis tools before  the advent of big data. However, big data seems to be a new trend.  I think electronics Supply Chains will benefit hugely using analysed collated data to their advantage. The flaw with Predictive method is the difficulty in accurately forecasting the future. Hence, predictive forecast is not 100 percent accurate.

  22. Anna Young
    December 26, 2012

    @TaimoorZ, Smart Supply Chains will be supported by data collection networks. Making vital use of system to systems integration up and down the supply chain to inventory machines, this will be aided by using analytics software generation process.

  23. Houngbo_Hospice
    December 26, 2012

    @Anna,

    It is good you mention that predictive forecast isn't always accurate. For sure, companies will continue to take advantage of the big data revolution in 2013. But we should also understand that not every big data strategy in the electronics Suppy Chain will yield the expected results.

  24. Houngbo_Hospice
    December 26, 2012

    @WaqasAltataf,

    I understand your point about taking advantage of the “right data at the right time”. As Anna said, the data is already available to the electronics Supply Chain,  as the “Electronics Supply Chains industry have in times past generated so much data about their operations, i.e. the markets, consumer behaviours, suppliers, pricing conditions “. Predictive analysis based on such data would  give a company an advantage over its competitors, if and only if it is able to build the right model. But from the process of gathering the data to the building of the right predictive model, there are many pre-processing stages that are not always easy to “deal” with.

  25. Houngbo_Hospice
    December 26, 2012

    @Anna,

    You are right, the key expression is that the “data being adaquately analysed and used”. As I said earlier, It is not enough to have a working predictive model, but the model should work “adequately” well.

  26. Ashu001
    December 27, 2012

    Waqas,

    Good point.

    However,I don't know how well versed you are with India's Fiscal Situation today.

    Its in as bad shape (if not worse) than the West.

    If it were'nt for its Citizens who continue to save prodigiously;India would be as bankrupt as the Western World today thanks to is spendthrift Government.

    In fact because of the Government's  Reckless Spending policies Inflation has gotten totally out of hand there ,forcing them to cutback on many ambitious spending plans.

    I won't be surprised if any spending allocated for Big Data there is cut sharply.

    As for China-Its an enigma and House of Mirrors in more ways than one.

    I have no idea what is the real truth behind all those bombastic statements they make routinely.

    Would rather take everything they (The Communist Party)says with a massive-massive pinch of salt.

    There is also a seperate issue of scale of Spending-If you look at it;if all of the West cuts back on Spending sharply at the same time;is Asia capable of picking up the slack???

    I don't think so.

    Regards

    Ashish.

  27. Ashu001
    December 27, 2012

    Houngbo,

    What you say is true however;the Big Difference though is in the scale/amount of Data available for processing.

    The Data which these tools were able to analyze previously was a fraction of the magnitude of the data available for analysis and processing today.

    That is the critical difference(that alongwith Speed of analysis).

     

  28. Ashu001
    December 27, 2012

    Ariella,

    I am 100% confident you are gonna love this speech by Pierre Poilievere(Canadian MP) regarding how bad the Fiscal Situation in America and Europe is today.

    The Best Lines are these-

    “By 2020, the US Government will be spending more annually on debt interest than the total combined military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel.”

     

    “Through government spending the indulgence of one is the burden of another; through government borrowing, the excess of one generation becomes the yoke of the next; through international bailouts, one nation's extravagance becomes another nation's debt”

     

    “Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless.”

    Brilliant-Brilliant Watch!!!

    http://youtu.be/wWkUaJId7pM

  29. Ashu001
    December 27, 2012

    Houngbo,

    You will be really surprised about the extent of Involvement in Big data and especially in the Electronics Supply chain!

    There is so much variety in Electronics today(especially when one looks at requirements,Speed of processing,Speed of manufacturing,etc);that good Quality Big Data tools can play a very,very important and critical role!

     

  30. Houngbo_Hospice
    December 27, 2012

    @tech4people,

    I don't doubt the potential of big data in the Electronics Supply Chain. I was just cautious about the fact that this will not be the panacea that will “magically” improve the Electronics Supply Chain industry's performance. But I like to be surprised.

  31. Houngbo_Hospice
    December 27, 2012

    @tech4people,

    Speeches are good, but solutions are better. What does he think those nations should do to bring back the world economy on the right track?

  32. Anna Young
    December 27, 2012

    HH, as you're aware, big data is a new trend to electronics supply chains industry, it'll be difficult to comment on its accuracy if it has not been fully tested. Hence 2013 will judge the benefits.

  33. Ariella
    December 27, 2012

    @Ashish much truth there, especially with the fiscal cliff looming. The compound, “money is free, and money is worthless” is spot on. 

  34. Himanshugupta
    December 27, 2012

    @Hospice, if we knew the answer to the question “what to do to bring the world economy on the right track” the we would not have time to write comments here. 

  35. Ashu001
    December 28, 2012

    Houngbo,

    Did you listen to the speech in Full?

    The reason I ask this is because his solution is contained in the speech too.

    Its called Living within your means and not spending more than you earn.The same applies for people as well as Governments.

    Good solution,I love it;unfortunately in a Democracy where many-many different competing factions are demanding Free lunches(or something for nothing);its hard for them to not PRINT,PRINT AND PRINT to get re-elected.

    This is precisely what the Canadian MEP was suggesting in his lecture.

    Must Watch!

    Ashish.

  36. Ashu001
    December 28, 2012

    Rich,

    In what context are you calling the Supply Chain as a BlackHole?

    Does it have anything to do with the fact even today many investments in the Supply Chain are doubtful ROI candidates?

     

  37. Ashu001
    December 28, 2012

    Ariella,

    Very-Very true right?

    I just loved the Speech in its entirety!

    Very,very well said.

  38. Houngbo_Hospice
    December 28, 2012

    @tech4people,

    “Its called Living within your means and not spending more than you earn.”

    Thanks for the follow-up. But still this is not the solution I was expecting. “Living within your means” is nothing new. I want to hear how to educate people and goverments to live within their means.

  39. Houngbo_Hospice
    December 28, 2012

    @Ariella,

    “The compound, “money is free, and money is worthless” is spot on. “

    There are many lessons to learn from that speech for sure. But I don't think that it answers my question.

  40. bolaji ojo
    December 28, 2012

    I wonder whether “Living within your means” is nothing but a crutch for not seeking or demanding more of yourself. We grow by challenging ourselves and sometimes that means aspiring for something well beyond our means. Of course, it doesn't mean we should act the part of a billionnaire when we are not that yet but it can imply shooting for Mars rather than just the moon!

  41. bolaji ojo
    December 28, 2012

    Simple answer? Yes. In a different way than what you mean, though, in my opinion. The real supply chain black hole is the one you fall into and can't climb out of. The multidimensional supply chain is the one that arms you with the tools not to fall into the supply chain black hole.

  42. bolaji ojo
    December 28, 2012

    Ashish, The ROI for the supply chain should always be measurable. Best practices leaders never design the supply chain as a support structure with no measurable deliverables attached to it. It's a cost center on its own and should make or lose money the way any cost center does. The preference, naturally, is that it makes money. An expert once told me the supply chain should be treated like any business unit. If that's done the ROI becomes more visible and determinable.

  43. Susan Fourtané
    December 28, 2012

    HH,

     “ I want to hear how to educate people and goverments to live within their means.”  

    How likely is that to happen? Charles Dickens emphasised the principle of living within your means already in the 19th century. People and governments haven't learned the lesson, have they?

    Watch this extract from David Copperfield, where Mr.Micawbers advises young David about the meaning of happiness and misery in the economical sphere of life.

    -Susan  

  44. Susan Fourtané
    December 28, 2012

    Bolaji, 

    “I wonder whether “Living within your means” is nothing but a crutch for not seeking or demanding more of yourself. We grow by challenging ourselves and sometimes that means aspiring for something well beyond our means.”

    What a wonderful reminder! Thank you so much. Just in time for adding it to the New Year's Resolutions list, and the Things to Remember list. 

    -Susan 

  45. bolaji ojo
    December 28, 2012

    Susan, I recall someone asking me what book I was reading on my tablet PC and the disappointing look on the person's face when I said “One of the classics!” It wasn't David Copperfield. But, despite this individual's disappointment that I wasn't reading something more in line with what she liked, I am quite happy to go back and re-read David Copperfield. They are not called the classics without reason! Thank you Susan.

  46. Susan Fourtané
    December 28, 2012

    Bolaji, 

    “They are not called the classics without reason!” 

    Classics are always good. I find the classics are full of lessons, and meaning that has stayed alive for centuries, like the case of David Copperfield. I also find it amazing how they fit perfectly in many of today's discussions. When I read what HH wrote, that scene came to my mind immediately, and with it, I wondered what we really learn — as humanity — in our lifetime.

    Two centuries have passed. What Charles Dickens wrote back then can be applied to today's economy. What have we leaerned? 

    -Susan  

  47. Houngbo_Hospice
    December 28, 2012

    @SF,

    Thanks for the extract. I wonder if this will ever happen in this world of greed and debt. But I`ve learnt my lesson. “you can't keep, what you can't afford”. 

  48. Houngbo_Hospice
    December 28, 2012

    @SF,

    I read Dickens's Great Expections some 15 years ago in my English Literature class. It was quite a learning experience. Most of our leaders might have read the book as well, but as you said what have we/they really learned?

  49. ITempire
    December 29, 2012

    @ Hospice

    Well it's about performing an effective cost benefit analysis before implementing a big data project. If the organization knows its objectives from a big data project well, then it can easily quantify and assess of what's affordable and what not.

  50. Susan Fourtané
    December 29, 2012

    HH, 

    Yes, I understand what you mean. I have also leaned some lessons. Read one of Bolaji's comments below, I gave it five stars. I think it's a great piece of advice. It's a good motivational way of thinking to prompt yourself to always find ways of improving yourself. I am pretty sure you will find it inspiring, too.

    -Susan  

  51. Ashu001
    December 29, 2012

    Houngbo,

    That's easy.

    You need people and Governments to get disciplined.

    How do they achieve that?

    That's the more difficult issue at hand.

  52. Ashu001
    December 29, 2012

    Bolaji,

    Good points!

    Here is a compeletely different perspective on the issue you present

    http://charleshughsmith.blogspot.com/2012/11/the-benefits-of-being-ordinary.html

     

    The last line there was just tremendous

    Being extraordinary is a terrific bother, truth be told, so please appreciate the benefits of ordinariness if you are so blessed.
    Excellent,Excellent Read!!!
    Regards
    Ashish.
  53. Ashu001
    December 29, 2012

    Bolaji,

    How many Supply Chain's are designed with this philosophy and thought-process in mind?

    If I had to break it down I doubt we have more than 45% along these ideas in mind?

     

  54. ITempire
    December 29, 2012

    @ tech4people

    There is also a seperate issue of scale of Spending-If you look at it;if all of the West cuts back on Spending sharply at the same time;is Asia capable of picking up the slack???

    I don't think so.”

    If we were solely talking about IT sector spending, I would have disagreed with you and would have counted on Asia to pick up the slack but for big data projects' spending, since Asia is still getting awareness of the concept, I will agree with you and I think the West is irreplacable in that aspect.

  55. hash.era
    December 30, 2012

    Prediction 8 is a great one. You do need to keep things updated and tight when it comes for technology play. Keep some space in the budget for technology improvements which will be needed.

  56. Susan Fourtané
    December 30, 2012

    HH, 

    Yes, Great Expectations is another great classic. Here is the full movie if you want to see it. 

    -Susan 

  57. t.alex
    December 30, 2012

    Yeah it's pretty clear from the predictions supply chain will be more technology-driven (and perhaps social network driven?).

     

  58. FLYINGSCOT
    January 1, 2013

    I read an article about the company Argos in the UK which is going through a major transition to embrace the trend of shoppers who demand internet pricing with the immediacy of store based supply.  The article reflects many of the tenets mentioned in your blog.

  59. Alex Fuller
    January 1, 2013

    @FLYINGSCOT

    I agree that the line between e-commerce and brick & mortar will continue to blur and start to dissappear this year. While an excellent corporate strategy, supply chains are going to be pushed to innovate and support customer demand. Flexibilty and quick reactions will be much better than long-term planning. Retailers may need to stop working 12 months out and instead be able to quickly adapt to trending opportunities.

  60. ahdand
    January 26, 2013

    Yes # 10 too is good but I would stick to mine for now 🙂

  61. hash.era
    January 30, 2013

    Ale: Technology driven yes its possible and has a great chance but not social network driven.

  62. t.alex
    February 10, 2013

    hash.era I think you are right. Yes technology driven. Social network just complement and is not really a push factor.

  63. t.alex
    February 10, 2013

    hash.era I think you are right. Yes technology driven. Social network just complement and is not really a push factor.

  64. hash.era
    February 10, 2013

    Exactly alex. We do need social mediabut 1st it should have some sort of a proffessionalism involved.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.