5 Supply Chain Challenges of the Future
Posted on Wed, Jun 23, 2010 @ 02:31 PM
A recent study has found that B2B Companies, which comprise many of ADS Logistics Customers, will likely face 5 key supply chain challenges as they seek to take advantage of the economic recovery, according to a new study by PRTM Management Consultants.
The study, Lessons Learned from the Global Recession, (you have to fill out a form to read the full report so we did it for you) found that most of the 350 manufacturing and service companies surveyed now believe there will be a significant upturn in demand from their customer base over the next few years.
However, the study also warns that many companies lack the supply chain infrastructure critical for meeting the emerging demands of managing an increasingly complex global market.
The 5 emerging demands identified by the study are:
1. Supply chain volatility and uncertainty have permanently increased
: Market transparency and greater price sensitivity have led to lower customer loyalty. Product commoditization reduces true differentiation in the B2B environments, and companies need to respect this reality.
2. Securing growth requires truly global customer and supplier networks
: Future market growth depends on international customers and customized products. Expanding supply chain globalization and complexity need to be managed effectively. Thus, finding supply chain management companies with integrated services such as ADS Logistics will play an increasingly important role.
3. Market dynamics demand specialized, cost-optimized supply chain configurations:
Customer requirements and competitors necessitate custom-tailored supply chains and product offerings.
4: Risk management involves the end-to-end supply chain:
Risk and opportunity management should span the entire supply chain—from demand planning to expansion of manufacturing capacity—and should include the supply chains of key partners.
5. Existing supply chain organization are not truly integrated and empowered
: The supply chain organization needs to be treated as a single integrated process. To be effective, significant improvements require support across all supply chain functions.
More than 85 percent of companies expect the complexity of their supply chains to grow significantly by 2012, yet many did not strengthen critical capabilities during the Recession. Additionally, more than two-thirds expect a higher number of product variations will be required to fulfill local customer expectations. Having an integrated and reliable supply chain process will be critical.
The study concludes with a 5-Point Agenda for Chief Operating Officers over the next 2 years to help them strengthen their supply chain process:
1. Improve customer access to supply chain data
2. Increase upstream and downstream supply chain flexibility
3. Focus on total supply chain cost engineering
4. Implement end-to-end supply chain risk management
5. Integrate and empower the supply chain organization
Ultimately, the main challenge for many companies is not to redefine their organization models, but to transition and manage the organizational change. When it comes to the metals industry, a company like ADS Logistics is ahead of the curve by providing integrated services such as their online inventory management system. The next 20 years will be particularly insightful as winners and losers emerge across all industries in this new economy.