By now, our readers have been catching-up on our global supply chain look back of predictions and events that occurred in 2011, as well as our corresponding Predictions for Global Supply Chains in 2012.  The year 2011 has proven to be a rather challenging one for supply chain teams from many perspectives, and 2012 looks to be just as challenging.  Many have risen to the challenges and some have succumbed.

As we approach the celebration for the calendar 2012 New Year, we should all take pause and reflect on the blessings of family, friends and professional career.  Much has been accomplished and we often do not take the time to celebrate.

We extend to all our Supply Chain Matters readers our best wishes for a prosperous, healthy, productive and beneficial New Year.

Bob Ferrari, Founder and Executive Editor

The Christmas holiday is fast approaching and we extend to all of the readers of Supply Chain Matters warm wishes for the holiday season, with thoughts of peace and joy for the coming New Year.

In the coming week we will have a limited publishing schedule as we enjoy some down time with family and friends.  We will however pulish some commentary, especially for major supply chain related news.

The holidays provide a great time to pause and reflect on both the current and coming year.  Do take the time to scan Supply Chain Matters for major developments that occurred this year, and our supply chain predictions for 2012 and beyond.

Thank you so much for your loyal readership and continued interest.

Happy Holidays…Feliz Navidad….Buon Natale…Joyeuses Fetes…Frohe Weihnachten…

Bob Ferrari, Founder and Executive Editor

This continues our series of commentaries outlining our 2012 Predictions for Global Supply Chains. These predictions are provided in the spirit of advising supply chain organizations in setting management agenda for the year ahead, and in helping our readers and clients to prepare their supply chain management teams in establishing programs, initiatives and educational agendas for the New Year.

Readers are welcomed to review our previous series of postings.  These include:

 The full listing of 2012 predictions

Predictions One and Two.

Prediction Three

Prediction Four

Predictions Five and Six

Prediction Nine: Wider scale leveraging and adoption of in-memory computing technologies among enterprise and specialty supply chain vendors, coupled with broader leveraging of data mining, have the potential to be game changing influences on supply chain wide business planning and response management.

This is essentially a repeat of our 2011 prediction, which did not come to full fruition.  We, however, remain firm in the belief that breakthroughs in larger-scale in-memory computing will pave the way for adding much more responsiveness to supply chain operations, planning and business intelligence processes. This is also an area where the challenges for managing and mining large data volume and the fusing of the physical and digital aspects of supply chain can be brought together.  The question is timing and demonstration, and readers should note that we have not affixed a firm 2012 timing for this prediction.

The converging forces of a more rapid clock speed of business change, along with senior management imperatives for quicker, more timely and responsive decision-making in response to events, continue to motivate supply chain management teams to shed sequential supply chain planning and execution processes in favor of a combined response management process that is built upon more rapid planning and predictive analytics that anticipate various scenario responses to an unplanned event. Today’s cadence and process-sequential S&OP processes are having some difficulty with keeping up with the current clock speeds of business change. The goal now equates to delivering the most timely knowledge and insights to the point or process of need.

Vendors such as Agistix, JDA Software and Kinaxis (one of other Supply Chain Matters named sponsors) have already demonstrated this capability.

The biggest player with the highest game-changing impact is SAP and its HANA development efforts.  Unfortunately, the latest indicators coming out of the SAP Influencers Summit in mid-December indicate that SAP wants to not only leverage HANA technology for leveraging more in-memory insights, but also leverage the technology to eventually make SAP one of the top three players in database deployment.  Supply Chain Matters feels that this added burden will only delay the real impact of HANA in the advanced analytics area, and that will be disappointing for many SAP customers.

Oracle has also been developing interesting applications in this area, and recently acquired information discovery vendor Endeca. IBM has also assembled all of the supply chain technology components for in-memory advanced analytics and has the potential to deliver some breakthrough.

This concludes Part Seven of our Supply Chain Matters 2012 Predictions.  In Part Eight, we will conclude this series with our tenth and final prediction, the increased adoption of systems of engagement in 2012.

Our complete research report which outlines all ten predictions in a single document is now available for no obligation free download in our Research Center.  (Listed as We only request that you provide some basic registration data including name, email, role and phone contact.  All information remains confidential and no salesperson will call. We also do not sell our registration lists to any third parties.

In the meantime, readers are encouraged to share observations and added predictions from your industry and functional lenses.

Bob Ferrari

© 2011 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters, All rights reserved.

Tomorrow is the Thanksgiving holiday that is traditionally celebrated annually in the United States. The holiday is meant to be a time to pause from day-to-day work and leisure activities and give thanks for the blessings of life and family. The tradition calls for extended families and friends coming together, some traveling long distances, to celebrate the holiday over turkey dinner and other group activities.

We would like to share a few thoughts on the eve of Thanksgiving 2011.

This has been a rather challenging year in terms of tragedy across our global community.  We all witnessed by the instantaneous power of media and the Internet, the powerful images of suffering and sheer devastation caused by the earthquake and subsequent tsunami that occurred in northern Japan.  I can still recall the video images of this horrific event. Families in Japan are still adjusting to the after effects, both personal and physical.

We should recall the severe floods that impacted Australia, the floods and tornadoes that struck the U.S.; the other devastating earthquakes that struck Turkey and other countries along with the other extraordinary occurrences of natural disaster that have impacted people and families. The latest reminder has been the monsoon related floods in Thailand that have taken over 600 lives and impacted countless of people.

The “Arab Spring and Autumn” have caused some to lose their lives because of the belief in freedom and human rights.  Members of the military and public safety continue to risk their lives on a daily basis while their families always live in a state of anxiety.

The unemployed have found their lives suddenly changed with a stigma that is not of their doing, and others face hardship.

Sometimes we get too caught-up in our day-to-day lives and lose focus on how much we should be thankful.

We give thanks for our small blessings, family and friends.  We remember those who experienced tragedy and trust that they will come to eventually give thanks.

Happy Thanksgiving to all of our readers and extended community.

An added note for readers from supply chain technology, service providers and event organizers.  Readership of the Supply Chain Matters blog continues to increaseand we just exceeded our 2011 readership and visitor milestones. Why not consider Supply Chain Matters as an online focal point for your brand?

We are currently offering rather attractive 2012 sponsorship opportunities that will feature your brand as a sponsor of quality global supply chain thought leadership.  We additionally provide consulting and service offerings to boost your firm’s presence and effectiveness in social media based product marketing.

You can double-click on our sponsorship information tab located on the top menu bar, fill-in the requested information, and we will contact you with additional information and rates. Alternatively, you can send an email inquiry to info <at> supply-chain-matters <dot> com.  Please include appropriate email and phone contact information.

The following Supply Chain Matters guest posting has been provided by Mark Wells, a principal at End-to-End Analytics.

Online Wall Street Journal Photo

“Supply Chain Matters” readers are painfully aware of yet another serious supply chain disruption, this time from tragically severe flooding in Thailand.  According to recent reports featured on the Wall Street Journal Online site (paid subscription or metered view may be required) Ford, Toyota and Michelin have cut back operations.  Ford says that lost production could reach 30,000 vehicles.  Forty percent of hard drives for personal computers ship from Thailand  and Western Digital makes sixty percent of its disk drives in that country.  More disruptions to value networks are surfacing as I write as a result of this catastrophe.

While the human cost of these disasters is devastating and defies valuation, the cost to businesses whose value networks include operations or suppliers in Thailand will not only be measurable, it will also be significant.

At a recent IBF Conference in San Francisco John Brown, Director, Risk Management, Supply Chain Development at The Coca-Cola Company (TCCC) recently made the point that while you cannot simulate the infinite list of events that might disrupt your supply chain, you can simulate most of the effects.  For example, if you have a significant portion of your value network in a country or region, you need to anticipate a loss of supply and have a contingency plan on what to do when that happens.  Then, as Kevin Harrington, Vice President, Global Business Operations, Customer Value Chain Management, Cisco Systems, has emphasized in multiple presentations, it is important to train your organization on exactly what procedures to follow in the event of a disruptive effect.

Firms who are leaders in planning to be resilient in the face of disruptions evaluate at least single level effects, create contingency plans for each, and then train key personnel on how they will operate under those contingency plans.  It’s difficult to take the time do training when there is no visible disruption, but that experience will become invaluable when trouble strikes unexpectedly.

Natural disasters are not the only source of disruption, but they are significant and difficult to anticipate.  When a natural disaster, civil disruption, or similar event resulting in a serious downgrade to your value network transpires, you need the capability to quickly simulate the how flow of materiel, information and cash can be facilitated with portion of the value network seriously degraded.  Beyond simply having the technical ability to simulate, you need the talent and insight to ensure that the inputs and assumptions upon which you base the model are valid and that the conclusions you draw from the results are reasonable and feasible.

Economic risks can compound the effects of these natural disasters in the form of rising and or uncertain commodity prices as well as fluctuations in currency exchange rates.  Skilled data scientists can build econometric models that enable you to predictively analyze commodity prices and foreign exchange rates, not only to arbitrage risk today, but also so that you will know immediately what strategic procurement actions to take in the case of a disruption.  Dow Chemical, for example, has created an advanced analytics group that focuses on (among other things) predicting prices of key manufacturing inputs.

It was Ben Franklin who said, “By failing to prepare, you are preparing to fail.”    Preparation for a disruption to your value network through planning and practice will always seem like overkill before the disruption.  During the disruption, however, previous preparation will demonstrate the wisdom of your investment in planning and practice and help to maintain the value of your enterprise.

Other reading on the topic include recent posts in this blog, “The Effect of Supply Chain Disruptions on Long-term Shareholder Value, Profitability, and Share Price Volatility,” by Vinod Singhal from Georgia Tech and Kevin Hendricks of The University of Western Ontario (June 2005) and The Resilient Enterprise:  Overcoming Vulnerability for Competitive Advantage  by Yossi Sheffi, MIT Press 2005.

Arnold Mark Wells is currently a principal at End-to-End Analytics.  He blogs weekly at Friday Forethought.