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Lora Cecere

Trends I am Watching

Posted by Lora Cecere in lora cecere's Blog on Nov 30, 2011 11:11:10 AM

It is that time again: ring out the old and ring in the new. The end of the year is a good time to reflect on the most significant trends of the past year and launch research into new areas. Here, I share both:

Significant Trends of 2011

§ Supply Chain Disruptions: With the floods in Thailand, the tsunami in Japan, and the Arab spring in the mid-east, there are few supply chain leaders NOT talking about supply chain resiliency and the design of the shock absorbing supply chain. Supply chain sensing, control tower analytics and what-if analysis are growing in importance. 65% of companies that I am working with experienced a major supply chain disruption in 2011.

§ Supply Chain needs to be more than a Game of Labor Arbitrage: As labor rates in China increase, companies are rethinking supply chain design for flexibility. Labor, taxes, and raw material benefits are ever-changing and the supply chain needs to be able to adapt and flex with global conditions. It is no longer a game of labor arbitrage. Companies are waking up. It is more about value and learning the hard way that supply chains can no longer foolishly chase the lowest labor costs.

§ Chief Supply Chain Officer. With the growing importance of the supply chain on operations reliability, resilience and strategic alignment, 2011 is the first year that I have met professionals with Chief Supply Chain Officer in their title. While they are still few and far between, I feel that the evolution of the title is significant.

Trends I am Watching for 2012

1.       Big Data Supply Chains. The concept of the big data supply chain is the evolution of technologies to harness the explosion of data and new data sources–sensor data, unstructured text, demand and supply sensing, transactional data forms– to drive a near real-time response. In this research, I will be writing about the evolution of Map Reduce models to harness new types of data with a keen interest in the use of unstructured data types. I will also be closely following the expanding capabilities of in-memory processing and the growing capabilities for reporting and analytics.

2.       Definition of Outside-in Supply Chain Processes. Today’s supply chain processes are designed from the inside-out (from the enterprise processes of procure to pay and order to cash). Tomorrow’s processes will be designed from the outside-in (from the external environment to internal processes). The focus will be on sensing, shaping and driving an intelligent response. This evolution will take many years and will require the redefinition of current supply chain architectures. I will be following these trends.

3.       Digital Path to Purchase and Social Commerce. I am currently writing a short report on social commerce. Last year in October 2011, Altimeter hosted an event–Rise of Social Commerce– to focus on the evolution of social processes to drive commerce. A year later, I find that the goals are still aspirational, but following one of four paths: extension enrichment of eCommerce, social as a new channel, social convergence of mobile/social and digital in the digital path to purchase and open innovation. The intersection of the open and social graph is still largely an untapped opportunity for the customer-centric supply chain.

4.       Evolution of Supply Chain Adaptors. To connect the end-to-end supply chain, companies need adaptors for both demand and supply relationships. These adaptors cleanse, harmonize, translate and normalize disparate data types to improve demand and supply sensing.  Demand signal repositories (DSR) were an early form of this technology category. Companies are learning the hard way that building the end-to-end supply chain is not as easy as connecting ERP and APS building blocks.

5.       Safe and Secure Supply Chains. With changing legislation for serialization in pharmaceuticals and food safety in global supply chains, I will be following the impact on supply chain execution and the extended supply chain.

6.       Supply Chain Sensing. Today, supply chains respond. They do a poor job of sensing. While latency in the extended supply chain is weeks (and the concepts of the bullwhip effect are understood academically), the impact is largely ignored in the extended supply chain system design. In this research theme, I will focus on understanding the benefit to companies to reduce supply chain latency.

7.       Redefinition of Supply Chain Benchmarking. Software as a Service (SaaS) offers companies the opportunity to redefine benchmarking practices to represent the near real-time supply chain potential of peer groups. I will be closely following this trend as SaaS offerings embrace content and global supply chains align to near real time performance signals.

Interested in your thoughts. What trends do you think are significant? Any trends that you would like for me to watch?

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