Major trends in Supply Chain Area

Filed in archive Market Overview on September 11, 2007

Dan Gilmore of Supply Chain Digest has been writing a series of articles recently with a theme quite similar to one of my earlier posts. The title of his articles are "Supply Chain Mega Trends". I thought it would be beneficial to have a quick review of what he has evaluated as important trends in supply chain area. Here is a summary:

* Focus on Alignment: Between supply chain and the business, between supply and demand, etc.
* Push-to-pull: Getting more "demand-driven"
* Visibility: It's on the top of most supply chain agendas these days
* Virtualization: Not just offshoring/outsourcing, but also, in part, a long-term risky move in which the company adds less and less of the total product value
* China: Worthy of a trend all by itself, China is changing the global supply chain and competitive landscape
* Centralization: of transportation, procurement, etc. - in part because the technology now makes it much easier to do so.
* Performance Management: More than ever, companies are really using metrics to drive supply chain performance, and an increasingly sophisticated set of electronic scorecards and "dashboards" to monitor and report on performance.
* Lean Supply Chains: Everywhere I go, companies are moving Lean thinking and Lean initiatives from the factory floor to the broader supply chain.
* Risk Management: It's obvious why :)
* Sensory Networks: From RFID to "motes"
* The Green Supply Chain: Clearly it's a big deal right now, but is it a Megatrend? It's too early to say so yet - there may be some faddish components here. But we're watching closely.
* Cost Reduction Imperative: As mentioned above, everywhere I go supply chain execs are under Relentless pressure to decrease costs to stay competitive and, maybe more importantly, to meet Wall Street expectations. Maybe this is beyond a Megatrend - a "Permatrend?" But it seems worse to me than ever before.
* Distribution Automation: We're early here, but I believe you will see a huge move in the U.S. to automate additional parts of the distribution process. Why? Labor costs and headaches simply continue to rise.