I believe that SCM in 2016 will be focused on customers – more than ever before! First, analyzing customer data could become the new core competency. Many companies already got rid of non-core processes. For example, Apple has focused on R&D and marketing but outsourced production to contract manufacturers – a typical smiling curve! Now, companies are increasingly focusing on analyzing customer data and just happen to be making phones or cars. Cars could soon be offered by innovative IT giants from silicon valley who outsource engineering to traditional carmakers. Cars could become “software on wheels”. Second, production will take place closer to consumer markets. While labor costs in China continue to increase (and there is no “new China”!), new technologies make production close to major markets affordable again. For example, Adidas will start production in Germany in 2016 – in its new “Speedfactory”, which is operated largely by robots. This could dramatically speed up delivery to fashion-conscious consumers. Finally, what we will see in 2016 are truly sustainable business models (see my previous blog post). I wish you a good start into 2016!
According to a new DHL white paper, titled Engineering & Manufacturing 2025+ – Building the World, the Engineering & Manufacturing (E&M) sector is on the brink of change. The E&M sector is expected to transform over the next 10 to 15 years by responding to this change with intelligent and sustainable manufacturing as well as new business and collaboration models. These transformations will have substantial implications for our supply chains. While traditional supply chain goals like quality, efficiency, total cost, or delivery performance will remain important, future E&M supply chain models will (1) reflect a global network of regional supply chains, (2) focus on risk management to create resilience and compliance, (3) take care of emissions and resources to make the world sustainable, (4) implement end-to-end connectedness and integration, and (5) be agile and responsive. And I agree: In this era of volatility and due to the need to create CO2-neutral business models, supply chains need to be adapted and redesigned soon.
Today, John McNamara, SVP Sourcing, Adidas Group, visited me and my SCM students at Copenhagen Business School. He presented a case study about the supply chain processes for t-shirts. It was very insightful and also a lot of fun for my students (and me). Thanks, John, for a great case study and an insightful discussion!