The 2015 MHI Annual Industry Report is out now. It was published by MHI, a U.S. material handling, logistics and supply chain association, in collaboration with Deloitte. The authors argue that “companies that continue to rely on traditional supply chain models will likely find it increasingly difficult to stay competitive and meet customer expectations for orders that are complete, accurate and on-time”. Based on survey data, the study, thus, analyzes technologies and innovations that are transforming supply chains around the world. Particularly, the following sets of technologies are covered by the study: (1) maturing technologies (inventory and network optimization, sensors and automatic identification, cloud computing and storage, robotics and automation), (2) growth technologies (predictive analytics, wearable and mobile technology), and (3) emerging technologies (3D printing, driverless vehicles and drones). The authors believe that “the innovations and technologies highlighted in this report have the potential to provide step-change improvements in both cost and service”.
Last week, a well-made special report by Raconteur, titled Supply Chain 2015 (pdf), was distributed in The Times of London. I very much enjoyed reading it. The authors make clear that “contracting has to be far more agile than a traditional long-term sourcing process and relationship” and they discover that “many companies are unprepared for increased complexity”. The report also discusses five megatrends, each having implications for supply chain management: (1) shift in global economic power; (2) demographic and social change; (3) technological breakthroughs; (4) climate change and resource scarcity; and (5) rapid urbanization. Other topics covered by the report are, among others, strategic procurement, top technologies, demand prediction, sustainable supply chains and cross-border delivery. The report also contains an analysis of three selected sectors (retail, construction and pharmaceutical) and additional case studies, including a case study on the 2013 Rana Plaza tragedy in Bangladesh. More information can be found on the homepage of Raconteur’s Supply Chain 2015 report.
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.
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.
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).
Amazon is testing delivery packages using drones. Is this the future of logistics?
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
I have discovered an interview with Mark Green, a supply chain executive at PVH, about his vision for global supply chains. PVH is the owner of brands such as Calvin Klein and Tommy Hilfiger. The interview contains several interesting thoughts. Green observes: “We’re going from a [purchase orders]-focused and very transactional model to the evolution of a supply chain concept, and this idea of working more collaboratively with our vendors”. He adds: “From there we’re starting to see the emergence of a value chain, and a value chain involves a much more integrated relationship with the vendor base.” Green underlines the importance of visibility: “And the only way we can do this is by having a far greater degree of transparency with our core vendors, so that we allow them to plan, to work with us in terms of forecasting, in terms of smoothing production.” Read the full interview at just-style.com.