Logistics Trend Radar 2014
Trend research helps academics and managers to discover topics that are interesting and important alike. DHL has now published the 2014 edition of its Logistics Trends Radar. Trends discussed in this new report include (1) omni-channel logistics, which refers to “[t]he integration of different offline and online shopping channels making use of interactive eTags with personalized content and integrating social media and mobile devices”, (2) anticipatory logistics, which involves “[t]he big data analysis of customer product searches, shopping histories, wish-lists and even cursor movements in order to send a shipment even before the customer places an order” and (3) crypto payment, which is focused on “universal payment systems that allow global cross-currency payments to clear in seconds, support any unit of value […] and make room for new pricing models”. These trends provide flags for the logistics world of the future. Let us get prepared – both in academia and in management practice.
The State of the Retail Supply Chain
When we talk about supply chain management, we often intuitively take the perspective of the manufacturing industry. However, if the ultimate business objective of supply chain management is to satisfy the final consumer, it becomes clear that we should not forget about the special and major role the retail industry has in achieving this objective and, thus, consider their perspective. A new JDA-sponsored report, The State of the Retail Supply Chain (pdf), has been jointly developed by Auburn University and the Retail Industry Leaders Association (RILA). “The study reveals that retailers are investing in resources that will fuel revenue growth, support expansion of omni-channel fulfillment options, and harness big data for more accurate demand planning. The results also highlight the need for retailers to focus on supply chain talent management, network growth, and resource optimization.” These results mirror several of the results we have found in our report Trends and Strategies in Logistics and Supply Chain Management.
Logistics Performance Index 2014
Today, the World Bank has released its Logistics Performance Index 2014. The report is titled “Connecting to Compete 2014: Trade Logistics in the Global Economy”. The index, which is based on survey data collected from more than 1,000 logistics managers, allows a comparison of 160 countries in terms of trade dimensions, such as infrastructure quality, customs performance and timeliness of shipments. It is a valuable resource for researchers, business executives and politicians to analyze the current state of logistics in the world. The results of the new report “point to Germany as the best performing country with an LPI score of 4.12 […] (on a scale of 1 to 5)”. Moreover, “15 of 28 European Union (EU) member states and 23 of 34 Organisation for Economic Co-operation and Development (OECD) members were among the top 30 countries”. The report highlights that “[s]upply chains—only as strong as their weakest links—are becoming more and more complex, often spanning many countries while remaining critical to national competitiveness”.
CDP Supply Chain Report 2014
The Carbon Disclosure Project (CDP) “is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information”. Written by Accenture, the CDP Supply Chain Report 2014 has now been published. Its subtitle, Collaborative Action on Climate Risk, indicates the direction of the report’s journey. Indeed, the report, which is based on data collected from 2,868 companies responding to a supplier information request in 2013, builds on “a wealth of data on how suppliers and their customers are collaborating to drive down carbon emissions, mitigating water risk, seizing opportunities, and building revenue and brand along the way”. It turns out that “[s]uppliers report that both climate risk and opportunity are at high levels” and that “consumers are becoming more receptive to low-carbon products and services”. Moreover, suppliers “realized savings of US$11.5 billion from emissions reduction investments […], down from US$13.7 billion in 2012”.
The Rise of Interconnected Risks
Risks related to business interruption and supply chains are the principal risks faced by global companies, the new Allianz Risk Barometer 2014 finds. According to the report, losses related to business interruption and supply chains “account for around 50-70% of all insured property losses, as much as $26bn a year for the insurance industry based on 2013 data”. Paul Carter, Global Head of Risk Consulting, Allianz Global Corporate & Specialty (AGCS), asks: “There is a need to examine beyond the identification of so-called ‘critical’ suppliers. How do these companies manage their own supply chain exposures?” Other top global business risks are natural catastrophes, fire/explosion, changes in legislation/regulation, and market stagnation or decline, the research finds. The survey “was conducted among risk consultants, underwriters, senior managers and claims experts in the corporate insurance segment of both [AGCS] and local Allianz entities”. Download the full report: Allianz Risk Barometer 2014 (PDF).
Logistics and Supply Chain Management in Africa
Trends and Strategies in Logistics and Supply Chain Management
I am excited to announce that our new study titled Trends and Strategies in Logistics and Supply Chain Management (pdf) has now been published on behalf of BVL International. It is co-authored by Robert Handfield, Frank Straube, Hans-Christian Pfohl and me. The general observation taken from 62 interviews and 1757 international survey responses is that logistics complexity in the form of fragmented channels, increased product variations, and consumer demands for customized solutions has increased. Several trends demonstrate that a number of major challenges lie ahead, as the world becomes a more complex place. We found that the major trends that will increasingly impact organizations in 5 years are network forces such as (1) customer expectations, (2) networked economy and (3) cost pressure, and external forces such as (4) globalization, (5) talent shortfalls and (6) volatility.
Handfield, R., Straube, F., Pfohl, H.-Chr. & Wieland, A. (2013). Trends and Strategies in Logistics and Supply Chain Management – Embracing Global Logistics Complexity to Drive Market Advantage. ISBN 9783871544811
Global Manufacturing Outlook 2013
The Economist Intelligence Unit’s Global Manufacturing Outlook 2013, written on behalf of KPMG, is out now. It is based on an international survey of more than 300 senior executives from five industries. The report demonstrates that competitive advantage can be secured by enhancing supply chain networks for efficiency and innovation. Particularly, it is demonstrated that (1) many manufacturers are planning mergers or acquisitions to seize opportunities in global markets, and they plan to exit non-profitable, non-core business units and product lines; (2) many manufacturers are building network relationships with suppliers to become more responsive to market changes; (3) supply chain visibility beyond tier-1 partners can have a positive impact on agility, resilience, and performance; (4) supply chain partnerships, rather than in-house efforts, are increasingly seen as an important source of innovation; and (5) manufacturers are investing in both breakthrough and incremental innovation to ensure competitiveness. In sum, the report highlights the importance of supply chain management for manufacturers.
Supply Chain Resilience 2013
In the face of disruptions and volatility, supply chain managers are concerned about resilience, which can be broadly defined as “the ability of a supply chain to cope with change” (Wieland & Wallenburg, 2013). Two recent publications present ways to implement supply chain resilience. First, the Business Continuity Institute has published a report that summarizes the key outcomes of its 4th Annual Supply Chain Resilience Survey. It discusses causes and consequences of disruptions, presents techniques to identify key supply chains, and offers approaches and solutions to achieve resilience. Second, the World Economic Forum, in collaboration with Accenture, offers a “blueprint for resilient supply chains based on four core components: partnerships, policy, strategy and information technology”, which is discussed in a report, Building Resilience in Supply Chains, developed as part of the Forum’s Supply Chain Risk Initiative. I believe that these publications will, indeed, help supply chain managers to cope with change.
Global Supply Chain Survey 2013
I recently received this year’s Global Supply Chain Survey by PricewaterhouseCoopers (PwC). It turns out that the leaders in PwC’s survey “have supply chains that are efficient, fast and tailored – a model that lets companies serve their customers reliably in turbulent market conditions and that differentiates between the needs of different sets of customers”. The authors present six key findings: (1) Companies should view the supply chain as a strategic asset to achieve better financial results; (2) Companies should focus on three key drivers: “perfect order delivery, cost reductions and supply chain flexibility”; (3) Companies should recognize that one size does not fit all; (4) Companies should not outsource core strategic functions (i.e., strategic procurement, sales and operations planning and research and development); (5) Companies in emerging markets should introduce differentiating processes; (6) Companies are increasingly interested in next-generation technologies and sustainable supply chains. Most of these results are in line with my own observations.
