Value Chain Trends 2012 – The Big Picture

Value Chain Trends 2012 – The Big Picture

Based on the positive feedback from the community of supply chain practitioners, I would like to continue the discussion about supply chain and sustainability trends.

Trends influence, but only actions create results

Given the volatility that is characterizing markets and economies today, I believe it is really important to understand which trends are ‘buzz’ and which ones are really ‘substantial’.
The agenda of supply chain leaders is packed with a lot of complex and pressing challenges as markets have become more volatile, customers less loyal and global supply chain footprints have become reality for many corporations. During the last 6 years, I have described the basic themes in a series of global supply chain trends studies (PRTM Global Supply Chain Trends Study).

I have decided to continue this activity, but with a different spin and format. As noted in other posts, the capability to successfully manage a global supply chain is closely intertwined with addressing sustainability and societal value. It is a huge opportunity, rather than a cost to the business.

The value of a trends discussion is really to understand what works and how it adds value

2012 to 2014 will be years of transition for multinational corporations and small/medium sized businesses alike. Market volatility has become the ‘new normal’ and a renewed focus on corporate cost containment is emerging. While almost all corporations are busy in changing their operations, only a few are really able to articulate what they have accomplished. It appears that only bold corporate leaders are willing to change the rules of the game, with innovations that adress the product, supply chain and sustainability dimensions with equal focus. Stay tuned, as I will dig into the main trends in further blog posts, distilling where the real value is created.

Essential value chain trends for 2012+

My prediction is, that these ‘essential’ trends will prevail in the next 2 years and that are really translated into action plans.

Customer Centricity – Corporations need to find answers to several changes in demographics and consumer behavior. An ageing population, the rise of millennials as consumer group with high influence, the use of technology, required localization of products for regional markets, to name a few.

Product Launch Excellence – The need to introduce new and innovative products faster to markets will lead to tighter integration and collaboration between functional areas. Product Innovation, Product Development and Supply Chain will develop integrated launch management approaches,

Value Chain Collaboration – To enable a flexible global value chain it is of utmost importance to find the right collaboration approach and to invest into value chain visibility. Collaboration with suppliers, manufacturing partners and logistics service providers will only work, if the rules of engagement and the underlying performance expectations are clearly articulated. Supply Assurance, End-to-End Planning Transparency and flexible value chain configurations will deliver the levels of flexibility that are required to be cost-effective and profitable.

Sustainability – While Consumers, Governments, Interest Groups and NGO have always requested products and services to be sustainable, only few corporate leaders have considered sustainability as differentiator. Several large multinationals are now embarking on the journey to embed sustainability into the core of operations, to gain competitive advantage Successful examples will not only get more companies to participate, but it will also drive smaller/medium sized business to adopt similar approaches.

Enabling Technology – The last couple of years brought huge advancements in enabling technologies. An entire new ecosystem of vendors is now in place that offers corporations a blend of options to combine ERP capabilities with specific extensions to address planning, sourcing and distribution challenges. Fast reaction and simulation capabilities are the most exciting ones, while the value of cloud services will depend on context.

The Supply Chain ‘A Team’ – the increased importance of global value chains to deliver business results and the emergence of Chief Supply Chain Officers in corporations are clear indications, that the right teams with appropriate talent mix will make the difference. Getting these teams in place has been a burning platform in many organizations, and it will continue to do so.

Finally – each trend (or any combination of the above) holds the potential to create shared value. Keeping societal value creation on top of mind while designing the most flexible value chain, will be THE key differentiator going forward. While we see more and more companies embarking on this journey, it is a great time to use this opportunity now, while others are still dealing with ‘buzz’ topics…….

These are just my 2 cents – I would like to understand what trends you see emerging? What is buzz, what is substantial? Are there any new trends emerging? I appreciate your comments.

Best regards,

Michael