It was nearly 10 years ago when the initial hype of item-level tracking enabled by RFID began to emerge across retail and other consumer and industrial focused supply chains. The vision for the ability to connect the physical and digital aspects of the supply chain was within grasp and the hype cycle was extensive. Our readers might recall Wal-Mart’s highly visible corporate initiative for mandating RFID-enabled tracking across its supply chain as well as the U.S. Department of Defense efforts to do the same. But something happened, namely learning that seems to be rather consistent with advanced technology initiatives.
In the early days of RFID, there were challenges involved with the economic cost of individual RFID tags. Recall the threshold number of tags eventually costing less than 5 cents each. The IT infrastructure of required mobile and fixed readers, antennae, and database systems was more expensive than vendors were communicating. Industry-wide consistent information transfer standards development was elusive because either technology vendors continued to advocate for certain proprietary standards, hoping to cash in on the new technology wave, or specific industry groups themselves favored certain standards.
It is therefore very noteworthy to reflect on results of a recent survey conducted by GS1’s US Apparel and General Merchandise Initiative. For those unfamiliar, GS1 is a global information standards based organization that fosters trading-partner collaboration through adoption of global-wide consistent item numbering and identification electronic information exchange. Keep in-mind that apparel and merchandise supply chains operate on narrowest of product margins, with cost, inventory and shrinkage being prime challenges. Apparel and general merchandise was one of the prime targets of the early RFID mandates.
Last week the organization released the results of a 2014 survey providing indicators for how apparel and general merchandise manufacturers and retailers are utilizing item level Electronic Product Code (EPC) enabled RFID tracking. That survey indicates that nearly half of the manufacturers surveyed now indicating that they are currently implementing RFID, with a further 21 percent planning to implement within the next 12 months.
Of the retailers surveyed by GS1, more than half reported current implementation efforts underway with another 19 percent planning to implement in the next 12 months. Retail respondents indicated that on average, 47 percent of items received in their supply chains have RFID tags. In the news release, an Auburn University researcher indicates that retailers are garnering greater than 95 percent inventory accuracy, decreased out-of-stocks, increased margins and expedited returns. That phrase should sound familiar since it was the original declared benefits of the prior mandate efforts.
In the current clock-speed cadence of business where results are measured and expected in weeks and short months, 10 years is a lifetime. Yet, that it what was required for the technology maturity and economics of RFID item-tracking to reach what appears to be the dawn of mainstream adoption. This GS1 survey announcement should be viewed in that light.
For RFID enabled item-tracking, the early innovators have paved the way of learning and economics, as well as what worked and what did not. We at Supply Chain Matters have already brought to light the next wave of item-level tracking, sensor tags that can monitor the composition, state and movement of products across the global supply chain utilizing today’s mobile technologies and near-field communications (NFC). These tags will eventually provide for use cases in supply chain settings requiring higher levels of monitoring and detailed visibility such as fresh foods, pharmaceuticals, aerospace and others.
What is ever more important is that as a community, we learn from previous technology adoption curves where elements of business process adoption, standards and cost-effective technology all interplay. One obvious conclusion is that supplier mandates for technology implementation will not work if these elements have not been realistically evaluated.
Beyond all the hype are the inherent realities. Advanced technology does provide meaningful business benefits when applied to well-understood business process needs, challenges and cost factors. Technology adoption is not driven by vendor product marketing but by business education, process maturity, people and process realities.
© 2015 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters blog. All rights reserved.
Prediction Ten of our Supply Chain Matters 2015 Predictions for Industry and Global Supply Chains calls for increased attention and new investment interest for service focused supply chains in the coming year. This includes after-market business process services, service parts and service delivery supply and demand business processes.
The obvious reasons are the unprecedented increases in occurrence of product recalls that add large amounts of consumer negativity towards a brand, especially in the U.S. automotive sector. Too often, there has been a “throw it over the wall” mentality involving service beyond product sale and thus the after-market service supply chain has lagged in process modernization and investment.
Yesterday, the New York Times published an article, Auto Industry Galvanized After Record Recall Year (paid subscription but complimentary metered view with sign-up). This article reminds readers that about 700 individual recall announcements involving more than 60 million motor vehicles occurred in 2014 across the United States, double the previous record logged in 2004. The rate of recalls was the equivalent of one in five vehicles currently in the road. Many of our readers can probably attest to the current situation.
Auto manufacturers have been forced to clean-up years of defects that were either undetected or ignored amidst heightened regulatory scrutiny.
The result is obvious, service supply chains swamped with requirements for numerous replacement parts and service networks buffeted by consumer rage as to why their perceived unsafe vehicles cannot be immediately repaired. In the care of the massive recalls involving airbag inflators sourced from supplier Takata, product recalls are prioritized for warm region sensitivity along with broader U.S. wide needs.
The Times article observes that sending out notification letters does not suffice, requiring more direct interaction with consumers. That, by our lens, implies more timely information and visibility as to the prioritization of repair campaigns and availability of required repair parts for specific regions. The article further hints to underreporting of potential product defects or failures.
OEM’s such as Toyota are overhauling safety and product recall practices as well as processes incorporated within its service networks. Supply Chain Matters has previously highlighted General Motors new brand survival emphasis on up-front product quality and more responsive tracking and detection of potential product problems. Social media will play a very important role in these new methods including the transmission of product recall information directly to consumers and their individual vehicles. Legislators continue utilizing the big-stick of criminal prosecution of executives and a means to motivate automotive OEM’s to be more responsive to product quality and overall vehicle safety.
Crisis often brings opportunity, and in the case of service networks, the opportunity is the ability to leverage today’s more advanced technologies related to vehicle sensors, predictive analytics, advanced simulation and scheduling, demand sensing and item-level B2B business network wide visibility among service focused supply chains.
The forces are indeed in motion for greater attention to service supply chain capabilities in the New Year.
Just before the start of the New Year, the Ferrari Consulting and Research Group and the Supply Chain Matters Blog share our annual ten predictions concerning industry and global supply chains for the coming year. We have maintained this tradition since the founding of this blog in 2008 and it continues to be quite popular with our readers and clients.
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. Predictions are sourced from synthesizing developments and trends that are occurring in supply chain business, process and technology dimensions, researching various economic, industry and other forecasting data, along with input from clients, thought leaders and global supply chain observers.
We take predictions seriously and align our research and blog commentaries to focus on specific prediction areas throughout the coming year. Supply Chain Matters will revisit each of our annual predictions at the end of the year to ascertain how close or how far each fared.
Part One of this posting series outlined our first five predictions for 2015. In this Part Two posting, we share our remaining five predictions.
2015 Prediction Six: A Stalling of Big Data and Predictive Analytics in Favor of Alternative Application Focused Strategies
We anticipate that the promise of Big Data and Predictive Analytics technology in enabling more insightful and predictive decision-making stalls in 2015 because of certain technology and organizational constraints. The promises in capabilities to analyze terabyte streams of enterprise structured and unstructured data related to customers, products, suppliers and equipment are dependent on software and database capabilities that can accommodate large data streams and simultaneous user inquiries. The term Big Data itself is a symptom of a far more perplexing problem, namely that enterprises, organizations and industry supply chains are currently overwhelmed by collecting too much extraneous data. The challenge at-hand is collecting and harvesting “smarter data”.
Database applications such as Hardoop provide the promise of smarter data, but for the time being, such applications need to be designed with more focused managed scope needs and requirements.
On the organizational side, one of the highest in-demand skills is that of a data scientist and the forces of demand far outpacing current supply has made these specialists quite expensive. Once more, what companies seek is more than just data analysis and interpretation skills but knowledge of customers, markets and business processes. That implies leveraging, building or training such skills among existing experienced teams, those with intimate understanding of the firms end-to-end supply chain. A further organizational challenge is addressing inherent concerns focused on security and governance of the mission critical sensitive data inherent in managing business operations.
Because of the above noted constraints, in 2015, IT leaders will influence line of business and supply chain functional teams to narrow the scope of these initiatives within certain supply chain process areas. For technology support, look for more supply chain, procurement and S&OP focused applications to be augmented with embedded predictive analytics and machine learning capabilities. Supply chain planning applications that include predictive analytics and/or augmented simulation will continue to lead in this effort. Expect similar efforts for cloud-based B2B supply chain network application and services. This will accommodate line-of-business needs for shorter-term, narrowed scope initiatives for smarter data and more predictive or prescriptive capabilities to respond to specific supply chain related business challenges.. We anticipate that best-of-breed technology vendors will lead with innovation in these areas while larger ERP and enterprise services providers will continue to communicate longer timetables for such functionality.
Narrowing current smarter data and predictive analytics within supply chain focused applications provides more likelihood for timelier benefits and will be a likely continuing trend in 2015 as broader streaming data efforts are re-focused and organizational challenges are resolved.
2015 Prediction Seven: A Turbulent Year in Global Transportation
Expect a turbulent 2015 involving competitive market, regulatory and business realities impacting global transportation, railroads and contracted logistics services.
These include the continuing shake-out of excess capacity among ocean container shipping lines and the re-sizing of global transportation and airfreight fleets. The reality of more super-sized container ships calling on ports not equipped for timely unloading and loading has made its presence. The “perfect storm” of dysfunction among U.S. west coast ports in the latter half of 2014 will have implications in how shippers, exporters and retailers route future shipments destined for the United States and global markets. Canada’s west coast ports will likely benefit along with U.S. Gulf and east coast ports. More importantly, the issues uncovered in labor contract negotiations, independent trucking’s driver contracts, the leasing and 3rd party deployment of tractor-trailer carriages to transport containers must be addressed by transportation industry and labor union players to avoid a repeat of what occurred in 2014. As we noted in our previous predictions in 2014, the desire for carriers or logistics providers to be asset light invariably leads to implications for having assets and equipment positioned for shipper vs. industry benefits.
Canada and U.S. based railroads will likewise encounter turbulence in industry shipping needs for accommodating higher volumes of crude-oil shipments under existing regulatory speed and safety constants while resolving additional multi-country regulatory requirements for upgrading thousands of tank cars to new safety standards. The Railway Supply Institute, a railcar industry trade group has argued that there is not enough tank car retrofit existing capacity to meet proposed regulatory deadlines for upgrading nearly 17,000 tank cars to new safety standards. This will lead to more industry and regulatory dynamics in 2015. Agricultural and bulk commodity shippers are caught in the middle of this dynamic as service levels continue to erode, leading to additional pressures by regulators on railroads to accommodate this important economic segment. Already, the share of Canadian based wheat exports to the U.S. has reached a six year low because of these dynamics. This balancing act is likely to spur higher rates and added transport dynamics in 2015.
The plunging cost of crude oil prices which is forecasted to continue in 2015 will add to turbulence involving existing fuel surcharges affixed to transport rate structures. Carriers and parcel shipment firms will likely attempt to drag out the suspension of fuel surcharges to protect or sustain ongoing margins. Carriers with a strong reliance on fuel surcharges for margins may find themselves in financial difficulty.
Finally, the implications of omni-channel commerce in B2C and B2B markets will face a number of important tests. Carriers FedEx and UPS implementation of dimensional pricing rates in 2015, causing the transportation rates of bulky but lower value shipments to be far higher will likely motivate consumers and procurement teams to revise shopping practices and place additional pressures on online providers to adsorb such costs. Amazon and Google have been positioning to control broader aspects of logistics and parcel delivery, and 2015 could well feature additional acquisition announcements from either or both players. Amidst further global-wide governmental and legislative pushback, ride-sharing services firm Uber may well alter its business strategy to focus more on priority package delivery vs. people.
The added complexities and service needs for omni-channel and industry-specific logistics needs continue to spur more service and technology requirements by customers on third-party logistics providers (3PL’s). Individual 3Pl’s must therefore invest in broader technological and systems capabilities and scale, or risk losing business to larger more versatile providers. The acquisition announcement by FedEx of GENCO this month portends this dynamic in the coming months.
2015 Prediction Eight: Sales and Operations Planning transitions to broader scope information management connectivity augmented by what-if and simulation capabilities
In order to more proactively respond to today’s constantly changing and complex business requirements, we predict that select industry sales and operations planning (S&OP) processes will begin efforts to transition toward inclusion of broader aspects of internal and external business planning, response management and predictive decision-making capabilities. This will most likely include deeper, cross-application information connections to product demand pipelines, augmented with traditional and social media based demand sensing. We further anticipate more-timely information connections with external or outsourced suppliers along with key customers, leveraging cloud-based planning and fulfillment synchronization networks. In those industries with more rapid new product introduction (NPI) cycles such as high tech, telecommunications, consumer products and electronics, the two-way flow of new product introduction (NPI), product management and program milestone information will be a consideration as well.
Because of these needs, expect B2B supply chain business network providers, including ERP players, to deepen their support for broader integrated business planning needs by leveraging cloud-based platforms or networks. Again, best-of-breed vendors have the ability to lead in this innovation. ERP provider SAP has already declared its intent to enhance its existing S&OP focused application towards more external integrated business planning elements.
Existing supply chain planning providers will have to deepen their connectivity to external cloud-based networks or risk being displaced by broader cloud-based network capabilities that synchronize planning, collaboration as well as execution information. In that light, we anticipate additional M&A or strategic alliance activity among best-of-breed planning and cloud-based platform providers in 2015. Similarly, 2015 entrants to the supply chain and enterprise technology arena will leverage Salesforce.com and other cloud-based platforms to broaden end-to-end supply chain visibility, deeper collaboration and more informed decision-making. One particular ERP player will have to make some major moves in this space.
2015 Prediction Nine: Industry supply chain step-up efforts towards supply chain vertical integration and modular product platform strategies with impacts on contract manufacturing sourcing models.
For the past three years, we have observed and highlighted on Supply Chain Matters, a number of manufacturing focused supply chains moving more towards various forms of supply vertical integration. The automotive industry has clearly been on this path while some high-tech manufacturers have embarked on initiatives as well. The newer, more technology laden versions of new models Airbus and Being commercial aircraft are demonstrating these strategies. The models varied by industry setting but the shift was discerning. This year, after reviewing data within SCM World’s published Chief Supply Chain Officer Report 2014 , we became even more convinced that industry or company specific vertical integration and modular product platform strategies would begin to accelerate in 2015. This movement comes from the realization that more and more products share common parts and components and that modular manufacturing design and deployment strategies make sense because they can facilitate more flexibility in geographical and individual customer fulfillment as well as product differentiation for various market channels while providing added protections for risk.
This strategy shift will begin to have impacts on contract manufacturing models in the latter-half of 2015, or even 2016, since these strategies involve a good portion of manufacturing value-added moving back to internal manufacturing. Since contract manufacturing arrangements for the most part stem from multi-year contracts, the impacts will be felt at contract renewal time. Many contract manufacturers currently operate on very slim product margins and symptoms of the evidence of these shifts will be reflected in even more deteriorating margins. We expect some contract manufacturers such as Foxconn, continuing to move upstream or downstream in an industry value chain to leverage the ability to either be considered a more strategic component player or eventually manufacture individually branded end-products. Likewise, key retailers and 3PL’s will asked to implement more production focused final assembly of finished goods postponement strategies at time of customer fulfillment.
Because of these strategy shifts, or perhaps anticipating such shifts, we would not all be surprised by active M&A activity among the impacted industry players noted above.
2015 Prediction Ten: Service supply chains garner increased attention and new investment interest.
We predict that in 2015 multiple equipment manufacturers and services providers will place added emphasis in evaluating their service focused supply chains. This includes after-market business process services, service parts, service delivery supply and demand networks. There will be two distinct motivations for increased investment and we anticipate that lines-of-business will be the prime investment leaders.
In the light of increasing incidents and broader occurrence of product recalls brought about by tighter global regulation, manufacturers have no choice but to protect the brand and customer retention. Service focused supply chains are the response mechanism that provide timely resolution to product quality or malfunction issues while root-cause defect areas are traced and investigated across the extended supply chain. Too often, there has been a “throw it over the wall” mentality involving service beyond product sale and thus the after-market service supply chain has lagged in process modernization and investment. Automotive industry services focused supply chains are the obvious prospect in 2015 along with industrial and medical equipment providers.
As noted in Prediction Four, IoT coupled to connectivity networks has the potential to drive new, more innovative, predictive focused product as a service platforms where connected machines and equipment serve as the demand sensing signal for maintenance, repair or consumable parts. Thus, the other investment motivator for service networks is enabling newer augmented line-of-business service revenue models that leverage IoT networks. We expect firms such as General Electric and Tesla Motors to serve as a benchmark in this area, but others will follow in the coming year.
This concludes the unveiling of Supply Chain Matters 2015 Predictions for Industry and Global Supply Chains.
How did we fare? Have these Predictions resonated for you and your organization? Did we miss an important prediction for the coming year?
Let us know either via Comments to this series or email feedback: info@supply-chain-matters <dot> com .
In early January, the complete listing of 2015 Predictions will be made available in a research report available for complimentary downloading.
Once extend we extend best wishes for the holiday season and the upcoming New Year.
©2014 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters blog. All rights reserved
Last week, I pondered over business media reports that indicated that ad sales surrounding broadcast television were decreasing at a considerable rate. The reasons are somewhat obvious; more people are turning away from broadcast networks with a preference for online digital platforms for entertainment and news. I can observe this trend succinctly in my extended family and friends.
Digital platforms provide for more audience segmentation because we as consumers and customers seek out specific online sites that provide value as well as entertainment. This applies to both personal and more and more, business and personal career needs as well.
Marketing teams within B2C customer environments are certainly well aware of these trends as they continue to shift significant aspects of marketing spend towards more focused online channels. I wonder, however, if B2B marketing teams, especially those firms offering supply chain, procurement, manufacturing and product lifecycle management technology and services have truly internalized these same trends.
It is too often in my observations and associated conversations with technology marketing teams that I note that a high percentage of their marketing budgets are allocated to sponsoring attendance at industry or trade events. Why? Because their direct sales teams constantly seek venues to meet and mine “prospects”. However, in the case of supply chain focused events, there is the brute reality of far too many events chasing limited demand.
If your email is like mine, a day does not go by without multiple notifications of upcoming supply chain focused events. Professional organizations pay to play conference firms, trade and media publications, industry analyst firms and technology providers themselves barrage industry professionals with conference attendance opportunities. But, the obvious reality is that anyone in a supply chain or manufacturing focused position is far too occupied in getting his/her job accomplished on a day-to-day basis to find the time to attend multiple events on a year round basis. If they do attend such events, it is often a regional or trusted event requiring manageable justification and opportunities for networking with peer professionals vs. technology focused salespeople. Once more, in this era of globally focused supply chain networks, people are constantly mobile, traveling on business or visiting remote locations. Hence, they have learned that seeking supply chain information and insights can be selectively accomplished online. Yet, marketing teams continue to shell out thousands and thousands to support an annual trek of conference events, hoping that their sales team will find that one golden prospect.
The coming few weeks are the period where marketing budgets for the coming calendar year are compiled, reviewed and approved. We continue to advise that the same current realities of online apply to supply chain, manufacturing, procurement and product management communities. Why cast a wide net when online properties provide the segmented audience your products or services require? Why ignore the compelling benefits of social media and digitally-focused inbound marketing based initiatives that provide constant, around the clock brand impressions as opposed to a singular one-time event where conversion rates are questionable?
Finally, a reminder that this site, Supply Chain Matters, has amassed a targeted audience of readers seeking the deepest coverage and insights into industry specific supply chain, manufacturing and product management business and technology learning. A scan of our content categories provides examples of the depth of our cross-functional and industry-specific content.
We provide personalized programs to make your brand and product marketing initiatives successful with broader and continuous reach. Give us a call or send us an email and let us show you how we have assisted other clients.
For more information visit our main web site.
Business and social media is abuzz with today’s announcement that two long-time rivals, Apple and IBM, are teaming-up in an alliance to create simple business apps on Apple’s iPhone and iPad devices. As pictured in the Times Square featured announcement, both CEO’s are pictured in a casual and friendly stroll.
The obvious question is which of the vendor’s benefit the most from the proposed alliance. Another question is the potential impact on supply chain and B2B business network technology deployment. In this Supply Chain Matters initial viewpoint commentary; we briefly dwell on both questions.
Under the alliance, IBM will create what is termed as “simple” business apps leveraging the respective Apple mobile devices. IBM employees will further provide on-site services and support for Apple mobile devices. Of more interest is the report that IBM is planning to make 100,000 employees available to the Apple imitative, which is rather significant. Both alliance CEO’s made themselves available for a joint media interview. IBM CEO Virginia Rometty indicated: “This is just the beginning” and Apple CEO Tim Cook indicated: “This is really a landmark deal”. The apps themselves are reported to draw on IBM’s computing services including security, device management and big-data analytics. Apple and IBM engineers will jointly be developing more than 100 new business applications tailored for specific industry needs. The apps will begin arriving in the fall and IBM will resell iPhones/iPads containing the apps to its business enterprise customers.
The initial online consensus is that both vendors will benefit from this alliance and this analyst shares that opinion. Apple has struggled to penetrate the coupling of its mobile devices with business enterprise applications since the market continues to perceive the company as just a consumer electronics provider, albeit with elegant offerings. Security of mobile based information remains a big concern for both supply chain and IT teams. IBM with its deep ties to C-Suite and IT teams has been struggling with the need for more positive revenue momentum. A late entry and lack of momentum in supporting cloud-based and mobile computing needs has not helped. Thus, benefits and rewards loom large for both vendors under this alliance. They just need to collaborate and execute.
As for the potential impact for supply chain and B2B business network technology support, it’s too early to tell. As we have noted to our readers, IBM has amassed a broad suite of end-to-end supply chain, B2B, customer fulfillment network, service and business analytics capabilities that can all benefit from further leveraging of mobile-based applications. The open question remains on IBM’s track record of delivering on broader supply chain process integration in a much more time-to-market manner. We anticipate there will be opportunities to enhance mobile-based apps in Emptoris Supply Management Suite, Sterling B2B and online fulfillment network as well as end-to-end supply chain focused analytics. Customers will just have to wait and see what develops in the coming months.
A further implication of this alliance announcement will be how other business enterprise vendors such as SAP, Oracle, Google and Microsoft eventually respond. Each has positioned the leveraging of mobile devices within business applications from a multi-vendor perspective in an effort to support multiple brands. This week’s announcement may prompt a re-visit of these strategies, and consumer electronics providers Samsung, Lenovo or perhaps HP, could benefit with enterprise software vendors again seeking deeper development alliances.
Bottom-line, our community can well anticipate some benefits of the Apple-IBM alliance along with the competitive response from other competitors in the market. IT teams will be able to rest more easy knowing that burden of integrating application with mobile device will be assumed by alliance partners.
The open question however is how mission critical supply chain and B2B mobile computing needs will be viewed in the light of implementing other more simplified apps that meet alliance objectives for total apps availability.
We all need to stay tuned.
On Monday, Gartner announced that worldwide IT spending is on pace to a level of $3.7 trillion in 2014, a 2.1 percent increase over 2013. However, that number is a full percentage point lower than Gartner’s 3.2 percentage growth forecast in April. According to the Gartner news release: “The slower outlook for 2014 is attributed to a reduction in growth expectations for devices, data center systems and to some extent IT services.” A Gartner vice president further indicates: “Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short term IT spending outlook.”
We call Supply Chain Matters reader attention to the Gartner revised forecast for a couple of reasons. Keep in mind that a downward adjustment of a full percentage point in just a couple of months alone is a rather significant indication that IT market dynamics are changing rather quickly. First, it is an obvious indication that despite a healthy IT investment climate, competition among vendors and services providers is driving down pricing, especially when it relates to cloud based offerings.
Second is the profound impact that cloud-based computing options are having on current IT spending. This is reflected in data center systems spend where Gartner points to: ”lower-cost alternative architectures and cloud-based storage” as driving constrained spending. In the Enterprise Software segment, despite a rather hefty 6.9 percent expected growth rate for 2014 for this segment, Gartner points to slighter lower growth expected for applications software and rapid move to cloud-based offerings by many organizations. These market realities have manifest themselves in recent revenue and financial performance from both SAP and Oracle, both of which have been obviously impacted from the quicker movement toward cloud-based enterprise software alternatives in the market. By contrast, cloud ERP providers have seen dramatic growth rates. Workday, a cloud-based HR and Financial Applications software provider announced that its total revenues increased 74 percent in its first fiscal quarter. Subscription revenues increased 80 percent from same period last year. As another example, Salesforce.com’s fiscal first quarter total revenues grew 37 percent while subscription revenues grew by 34 percent.
Third is the clear indication, now acknowledged by Gartner, that individual lines of businesses have garnered more influence on technology selection while the role of IT is shifting from “purchaser to coordinator”. That is a profound statement coming from the research firm that has catered primarily to CIO and IT audiences. The shift of technology buyer is clear and is being reflected in market forecasts.
In May, Gartner reported that the worldwide supply chain management and procurement software market grew 7.3 percent in 2013. All indications from the Gartner Executive Supply Chain conference held in May were that such growth will continue this year. With the shift of buyer influence toward lines of business, and with the increased attractiveness of cloud computing alternatives, we expect best-of-breed cloud providers catering to supply chain, B2B business network and supply chain business process intelligence needs to also demonstrate market success.
For technology selection and approval teams, be aware that heightened competition and more attractive and less disruptive IT software and infrastructure options are turning in your favor. There is little need to tolerate the past arrogance of your friendly ERP sales person who peddles the notion that cloud-based solutions will come to market in the coming months. (Perhaps longer) The market has come to the realization that there is no need to wait for unfulfilled promises.
©2014 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters blog. All rights reserved.