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Supply Chain Matters 2014 Predictions for Global Supply Chains- Part Eight

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Once a year, just before the start of the New Year, the Ferrari Consulting and Research Group and the Supply Chain Matters Blog provide our series of predictions for the coming year.  These predictions are provided in the spirit of advising supply chain organizations in setting management agenda for the year ahead, as well as helping our readers and clients to prepare their supply chain management teams in establishing programs, initiatives and educational agendas for the upcoming New Year.

In Part One of this series, we unveiled the methodology and complete listing of our 2014 predictions.   Supply Chain Matters Blog

Part Two in this series summarized Prediction One related on what to expect in the global economy and Prediction Two, what to expect in procurement costs.

Part Three summarized Predictions Three, continued momentum associated with the resurgence in U.S. and North America production, and Prediction Four, talent recruitment and retention as a continued challenge.

Part Four addressed some unique industry specific supply chain challenges in 2014.

Part Five predicted increased implications regarding current supply chain social responsibility strategies and practices.

Part Six explored the implications of increased supply chain risk on global sourcing strategies in 2014.

Part Seven dived into Prediction 8 related to expected global transportation consolidation developments, along with Prediction 9, our forecast for increased momentum in the “Internet of Things”.

In this final posting, we dive into our final prediction regarding what to expect in the information technology and services market arena next year.

Prediction 10: Continued Technology Investments in Cloud Computing, Predictive Analytics and Select Supply Chain Services. 

As noted in Prediction One, barring some ongoing remaining uncertainty, global economic growth in 2014 is forecasted to grow at a minimum of one percentage point from 2013, a number expected to be 3.6 percent.  That is a significant and long anticipated movement.

Industry supply chains will thus continue to turn their attention to increased business process and technology investments in 2014 to support business needs for increased top-line revenue and profitability growth, even more heightened industry competition, and enabling supply chain teams for more responsive to events. At the same time, continued uncertainties that abound in certain geographic markets and significantly increased risks associated with supply or value-chain disruption will place much more emphasis on more predictive planning that is closely integrated with customer focused fulfillment and execution process needs.  The current explosion in Multi-channel and/or Omni-channel fulfillment capability challenges outlined in Prediction Five will further drive increased technology investments in that area.

We believe that the prime areas for added investment will include:

  • Enhanced sensing of product and specific geographic regional demand.
  • Deeper and broader supply and value-chain visibility, including identifying and mitigating risk areas within lower tiers of the supply chain.
  • More predictive analytics and supply chain wide intelligence. That would include the overall integration of predictive planning capabilities that span supplier sourcing, ongoing supply and demand network design and/or reconfiguration, multi-tiered inventory optimization and multi-channel fulfillment management.
  • More emphasis on leveraging a single B2B network platform, connecting all key suppliers, with needs for integrating value-chain wide planning, team collaboration and customer and supplier fulfillment execution needs.

We concur with other industry analyst firms such as Gartner and IDC that the ongoing shift of influence and the ultimate decision in technology buying continues away from IT and towards the business side, with the continued counsel of the CIO and IT teams. The fate of technology investments to enable expected and more timely business outcomes now rests in the hands of business and supply chain teams.

The days of huge multi-year technology transformation initiatives will continue to shift toward targeted, tactical business process change initiatives of an average 3-6 months duration that phase-in capabilities toward a desired end-goal. The main focus will therefore continue to favor the Geoffrey Moore definitions of “systems of Innovation” and “systems of engagement.”

Hence, cloud computing and/or cloud-based applications technology options will continue to gain added attention across supply chain and B2B fulfillment areas because of needs toward quicker time-to-value. Because so many supply chainand customer fulfillment processes are deemed to be mission critical for the business, B2B platform vendors will need to continue to enhance data security management and control practices, especially in the light of continued incidents and threats of data breaches across multiple industry networks.  We continue in our belief that augmentation of cloud computing with managed services will be an attractive alternative for some select product or service management focused supply chains. We additionally believe that in 2014, supply chain teams will tend to hold favor toward private-based cloud options for the more mission critical aspects of product fulfillment, but will be somewhat more open to either hybrid or public cloud options supporting deeper analytics, value-chain wide collaboration or business intelligence.

In the area of predictive analytics, we predict 2014 will begin the emergence of a broader set of technology or services vendors offering deeper, cloud-based analytical capabilities in analyzing structured and unstructured data. These capabilities will have a strong dependence on supply chain wide event-driven data planning and execution streams. Predictive analytics will thus move toward more sense, predict and respond forms of approaches, including managed services of data scientists. This will afford the opportunity for supply chain teams to springboard capabilities in this area beyond the timetables of in-house development and better enable the foundations for supply chain control tower capabilities. Additionally, vendor marketing strategies that hype “Big Data” enablement will meet the reality of what teams really require, namely smarter, highly focused and more predictive data and insights that enable much more timely decision-making.

Finally in 2014, we anticipate broader consideration and evaluation of private and public social based interaction technologies to supplement existing product sensing and demand planning process needs, strategic vendor collaboration and broader external interactions within Sales and Operations Planning (S&OP) processes. While a limited amount of supply chain teams explored this area in 2013, primarily on the sensing of product demand, we anticipate broader business process explorations and pilot capabilities occurring in 2014.

 

Ladies and gentlemen, it’s a rap, and that leads us to the conclusion of our series of ten predictions for the upcoming year.

We trust that these predictions and insights will help you and your organization prepare for personal and organizational team initiatives in the coming year. Once again, readers are encouraged to provide feedback or add your own view of what to expect in 2014 in the Comments section below each of our eight postings.

Throughout 2014, Supply Chain Matters will be providing periodic updates regarding these prediction areas and our research services arm will additionally feature some select research reports that dive even deeper into some of these supply chain management areas.

Our complete research report, 2014 Predictions for Global Supply Chains will be available for no-cost complimentary download via our blog Research Center in early January.  In the meantime, if you desire to receive a personal copy via direct email, please send your request to: supplychaininfo <at> theferrarigroup <dot> com. Please include your name, organization, title and email address in the request.

We extend to all of readers and followers our best wishes for a productive and rewarding New Year along with continued personal success.

Bob Ferrari

Executive Editor of Supply Chain Matters, Managing Director, The Ferrari Consulting and Research Group

©2013 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters Blog.  All rights reserved.

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