Supply Chain Guru Predictions for 2011

Supply Chain Guru Predictions for 2011 : 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 . As promised, below you will find each contributor's full comments.

With the increasing popularity of making predictions the past several years,, I have observed that few ever come true 100%, unless they are so generic as to be obvious (e.g. “the economy will tend to improve”). It reminds me of sales forecasting, where perfection is impossible, and “hope is often the strategy”. Are we ready to accept that we really have no idea about a year ahead, and thus we should expect the unexpected, prepare for surprises, and try to somehow balance degrees of optimism and pessimism?

With this philosophy in mind, I will suggest five topics that might be characterized as “wishful thinking” for 2011. Yet it seems to me that these represent trends that, if the majority of supply chain managers around the globe could improve on, the value of supply chain excellence would escalate to executive agendas and thus advance the Global economy and our profession with them.

1: A better understanding of true Supply Chain costs.
Too often people misrepresent total supply chain as those of logistics and transport. In fact, supply chain costs include all costs associated with PLAN, BUY, MAKE, MOVE, STORE, SELL, and RETURN. In companies that do all these processes, the total supply chain costs will represent 80% or so of the total. Just because something is complex does not mean we should misrepresent it.

2: Simplification of Complexities.
Of course we know that global supply chains have become more complex, in all the processes, virtually all the functions and activities, and the choices we make every day. Unless we can learn to better simplify these, however, we will get mired in paralysis, misunderstandings, and errors. The art of synthesizing recognizes complexities, but presents them in accurate and actionable summaries.

3: More effective Supply Chain Organizations.
More and more leaders have come to recognize that despite impressive strategies, clear processes, and powerful technologies, unless the organization, people, skill sets, and culture are all world-class, supply chain performance will be mediocre. Organizational alignment and excellence, and change leadership, are taking front seats now.

4: Supply Chain people and skills are changing.
Closely aligned with the above are the needs of today’s supply chain managers. Engineers, analytics, and software savvy skills are very important, but so are the abilities to interact with peers, those in other Processes, executive, suppliers, and customers, on a business level. Watch how the Supply Chain Universities and recruiting firms deal with this trend, because every company is concerned about its talent gaps.

5: Better understanding of how Supply Chains should contribute to stakeholder value. Many know that I have promoted this trend for years, and it is finally becoming more evident. Cost efficiency is important, but Value Creation is really about improving Free Cash Flow, which comes from both revenue growth and cost management. Supply Chain managers are stepping up more to this role and will need to learn it. For the latest updates PRESS CTR + D or visit Stock Market news Today

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