Current logistics and supply chain management trends are discussed very often on social media sites. How can we identify them really? This article will show you some trends in the past and reveal what the future holds.
Background
Expert opinions appear to be the most important source of information for a trend prediction. In the year 2000, Journal of Business Logistics published the article named "Ten Mega-Trends That Will Revolutionize Supply Chain Logistics". The authors of this article are the late Donald Bowersox, David Closs and Theodore Stank (at that time all of them were at Michigan State University). The purpose of this article was to identify the paradigm shifts the authors observed from the way leading companies transformed their supply chain capabilities which were the results of the change of information technology. Ten megatrends can be summarized as below,
1) the shift from customer service to relationship management
2) more collaborative behavior
3) demand sharing creates the higher level of a joint business planning
4) new business environment requires a rapid change in processes and practices
5) focus on the bottom-line changes to focus on the value creation
6) internal functions are more integrated
7) virtual integration replaces the vertical integration
8) companies share more information with trading partners
9) multi-skilled employees are required
10) economic value added concept are more prevalent
Some of these trends have become the realities, depending on where you are in the supply chain.
What's Next?
Since the technologies change faster than ever and the scope of supply chain management is expanding, it's absolutely important for supply chain practitioners to capture the trends from the overall business landscape. In order to achieve this objective, we conduct a literature review and find an interesting article named "Agent of Change: the Future of Technology Disruption in Business" published by Intelligence Unit of "The Economist" in 2012. It's the result of a global survey of more than 500 executives conducted in 2011 + a series of in-depth interviews with thinkers from various industries about the future and business model in the year 2020. More details can be found as below,
Big Data as a Product
Large companies have invested in the software system so they can mine the big data in-house. However, services such as "Google BigQuery" have been developed to accommodate the big data analytics needs without a huge investment. When big data becomes something that most people can do, bankers, retailers, transportation companies, social media sites etc may sell their data to third party repositories and people can buy only a portion of data they want to use
The End of Middle Management
The wide spread of the big data analytics will enable junior staffs to make the better decisions by themselves. When, junior staffs are empowered to do so, the organization is flattening. Then, the need to have a middle manager who usually performs the data analysis is getting less.
Quality is a Series Issue
At the moment, you can use the new feature in Facebook called "Graph Search" to find products and services your friends "Like". Technology and more transparent data makes it easier to collect the data from social media, online forums and compare all vendors. Eventually, it will be more difficult to hide the quality and service issues from customers.
The Age of Mass Customization
Now Motorola lets customers configure their own cellphones via a website like configuring a computer via DellDirect. Then, many technology thinkers believe technology will allow customers to develop their own products and services like buying a blank canvas which they can paint by themselves.
Industry is Blurring
Technology alone is rarely a source of competitive advantage but it's the combination of technology and the new business model. According to The Economist, the survey respondents said Media + Entertainment or Banking + Telecom will become one industry.
Another interesting scenario is that technology will enable the non-asset based 3PL to work like a consulting and software firm and the 3 types of services will merge and become "supply chain service".
Mid-Sized Companies Are Gone
When technology becomes a lot cheaper, it's going to be easier to establish a type of business called "micro-entrepreneur" which is more flexible and respond to the customer' demand quicker. Or you can choose to create a bigger company via M&A strategy to drive the economy of scale. Then, being a mid-sized companies won't gain the edge.
Collaboration Becomes More Virtual
The importance of e-mail as a key communication method will be reduced due to the coming of the advance in the video interaction technology. Together with 3D printing technology, collaboration with trading partners will be more effective than ever.
Conclusion
Seven megatrends in technology will create the higher analytics capabilities, better customer understanding and change the industry/organization structure and how people collaborate.
The most important point to remember is that technology by themselves won't create an improvement but it depends on the business processes and how people use them. So, are you ready to embrace the challenge of the future?
This article was originally published on Supply Chain Opz, and is published here with permission.
Topics: Industry Trends
