Top global supply chain trends 2017
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Top Global Supply Chain Trends
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Top global supply chain trends 2017
- 1. GLOBAL SUPPLY CHAIN TRENDS CENTER FOR SUPPLY CHAIN RESEARCH CREATED BY LAUREN BECHTEL, PROGRAM DIRECTOR
- 2. Right product Right Quantity Right Place Right Time Right Cost As long as there are people on this earth, this rule will exist © GRA 2014
- 3. The internet has had an incredible impact on supply chains.
- 4. Supply Chain
- 6. Global Omni-Channel Service Providers With Seamless Global Omni-Channel Experience
- 7. Supply chain talent will continue to be in high demand and in short supply
- 8. Shifts in global movement of freight The widened Panama Canal, has created more opportunities to move freight to less congested East Coast ports.
- 9. Overcapacity in the container segment due to investments in large vessels
- 10. Re-shoring continues but… …supply chains will continue to remain global and complex BENEFITS OF RE-SHORING Source: http://www.dotnetit.co.uk/blog/article/ERP-UK-Manufacturers-Reshoring
- 11. 3D Printing will become Central To Manufacturing Strategy
- 12. Depopulation Depopulation will have a major impact on the supply chain
- 13. Making supply chain circular versus linear Customer Operating Company Product Manf. Parts Manf. Materials Manf. Materials Supplier Maintenance Parts Recovery Materials Recovery Material Separation Raw material recovery Incineration with Energy Recovery Final Disposal Recovery Secondary User of Materials Recycling Centre Green Centre Remanufacturing Zero Waste© GRA 2014
- 15. ontinued focus on sustainability and compliance in the transport industry
- 16. Economic growth in new geographies
- 19. Global Violent Extremism Impacting Shipping Routes
- 20. The growth economies 7 new markets have the potential to see strong growth in the coming years:
Editor's Notes
- Utilizing IoT devices, you can see moisture levels at the farm, track the rate of harvest, track the temperature of product in trucks, and even watch the rate of sale of products at stores. no matter what industry you are working in, utilizing IoT with Cognitive Computing helps you develop analysis and models that will give you increased visibility and traceability to the supply chain. It will also allow for rapid risk assessment and quicker responses to changes in demand. Utilizing IoT devices, you can see moisture levels at the farm, track the rate of harvest, track the temperature of product in trucks, and even watch the rate of sale of products at stores. No matter what industry you are working in, utilizing IoT with Cognitive Computing helps you develop analysis and models that will give you increased visibility and traceability to the supply chain. It will also allow for rapid risk assessment and quicker responses to changes in demand. When done right, augmented warehousing can decrease delivery time, reduce inventory cost, and reduce shipping expenses for a company. So why not take advantage of these game-changing technological developments when it comes to your supply chain? For example, smartwatches could help site managers observe real-time performance of business processes, productivity, inventory levels and deliveries. As a result, this will improve productivity by utilizing this information to make more informed decisions. What is Cognitive Computing? Cognitive Computing uses statistical and analytical tools – similar to how humans process information – to provide insight into our massive stores of data. Examples of this would include Microsoft’s Azure Machine Learning and IBM’s Watson. If you haven’t thought about how cognitive computing will change your business, you are falling behind the curve. Across all data-driven industries, companies are utilizing cognitive computing engines to provide insight and predication into user trends, sales patterns, and assigning risk.
- When we talk about Omni-Channel, we confine ourselves to one geographic border. While there are many conferences devoted to the topic of Omni-Channel distribution, peek inside and you will find that most retailers focus on one geography. What we will talk about this year, however, is how we will provide a seamless global Omni-Channel experience. What will be interesting is to see which model will provide the best user experience, retailer controlled or supplier controlled. Here in the U.S., Amazon continues to make massive infrastructure investments and is focusing on getting users deliveries quicker. Compared to Alibaba in China, that creates a larger marketplace. As both companies expand globally, it will be interesting to see which model delivers the best customer experience.
- While labor at the ports was one issue, there were a large number of factors that affected the ports. As the widened Panama Canal comes on line, there will be more opportunities to move freight to less congested East Coast ports. Although major shipping lines continue to be overcapacity and are still bringing ships online for the next several years. Profitability is significantly depressed.
- More shipping companies invest in larger container vessels to reduce operational costs. In general, the larger the vessel the lower the cost per container unit. Many shipping companies using even larger vessels, leads to an overcapacity; the increase in volume does not match the increase in demand. Overcapacity is expected to keep freight rates low until there is a balance between supply and demand.
- Depopulation waves Outward migration and brain drain will weigh on emerging markets, but rapid aging in developed markets will have the greatest effect on depopulation. United Nations World Population Prospects estimates point to global population growth decelerating from 1.8% in the latter half of the 20th century to 1.1% from 2000 to 2025. “Two major impacts of depopulation on the supply chain are labor shortages and weakening or failing transportation infrastructures,” according to the study. “As labor shortages drive up the wages that employers must pay to attract workers, they also decrease tax revenues that governments use to build and maintain transportation and business infrastructure.”
- 2015 saw a shift from the linear supply chain to the circular supply chain. The idea of a circular supply chain is now driven by the circular economy. While conventional supply chains seek to efficiently move products in a linear fashion from raw materials to end consumers, a “circular” or “closed-loop” supply chain is one that is also dependent on feeding used products back as raw materials. The resulting circular supply chain poses unique challenges and opportunities for supply chain professionals. Successfully building and managing such a system requires new and unconventional thinking. It also requires the ability for logistics and supply chain managers to look at forward moving logistics as well as reverse logistics. The use of reverse logistics provides a myriad of benefits to include: Reduced administrative, transportation and aftermarket support costs. Increased velocity. Increased service market share. Higher achievement of sustainability goals. Greater customer service and higher retention levels. When a business, or other organization, purchases equipment, parts, or remanufactured equipment it is an investment. Over time, this equipment improves profitability and has a positive return on investment. When the time comes to get rid of this equipment, business owners can employ reverse logistics practices to reap a second return on investment from the equipment. Many computers and other electronics contain high levels of metals, such as copper, iron, or steel, which may be sold for reuse in new devices. or a defective automotive piece of equipment can be remanufactured giving life to the equipment, allowing it to be reused or resold. Essentially, this is part of the recycling process, but for our purposes, we identify this as reuse due to the income generated through it. Manufacturers can create value, cut costs, and reduce exposure to volatile commodity prices by improving their resource productivity—using fewer resources for each unit of output. Leaders are looking for opportunities beyond their own operations. Collaboration with suppliers and customers can keep used products, components, and materials in circulation. New business models that rethink ownership can shift value along the supply circle. Better Asset Management also comes from this paradigm shift. Asset management should be an essential part of all of the supply chain processes. Manufacturesrs should be constantly reviewing how they can improve on maintaining, upgrading, re-using and recycling, electrical goods cost-effectively. The circular economy is a practical solution to conserving resources, where products such as a smartphone or TV will be seen in a different way, concentrating on their parts, not seeing them as they are but as opportunities for continuous value creation. Although for the supply chain this necessitates a reevaluation of practices. Business models need to be reviewed, reformulating the way we work to place the concepts of continuous value creation as a key cornerstone of our ethos and procedure. In accommodating this, 2016 will see an emphasis upon the refurbishment of parts and products as we move to the circular supply chain.
- Risk Management Comes to the Forefront: Supply chain risks come in a variety of forms. From counterfeit products, product integrity, and quality, supply chain stakeholders are constantly faced with a barrage of SC failure points. Ultimately the focus of risk management is on making sure that supply chain continuity is maintained in the event of some unforeseen interruption.
- There is an ongoing trend in the society, in general, where we are more aware of our planet and committed to taking care of it. As the transport industry is to blame for much of the emissions of carbon and nitrogen dioxide, taking responsibility within this line of business is extra important. In the transport industry, there is a continued focus on sustainability and compliance, especially environmental issues and CSR. All parties of the logistics chain are keen to work with companies that offer sustainable transport solutions and good working conditions. This is reflected by stricter compliance laws and regulations on a global level. For example, countries such as the USA, UK and Germany are working hard to prevent corruption through new laws that will be applied globally.
- Traditionally, China has had a rapid economic growth and the country has been a tremendous engine for increasing global trade. Now, we are starting to see that growth will be coming from new regions. Africa is expected to become the next big market, bringing new challenges to the table such as poor infrastructure, ageing roads and seaports and underdeveloped transportation systems. Tapping into the continent’s tremendous growth opportunities and figuring out how to overcome these challenges, is of great interest for all players in the logistics chain. As for the African countries, they need to investigate how they can maintain growth and continue to have a positive development.
- Geopolitical instability is ramping up in the Middle East, North Africa and South Asia, specifically, and the U.S., Russia and China continue to compete for global influence on everything from cyber security to territory. According to the International Monetary Fund (IMF), Brazil, India, Indonesia and China will be among the world’s 10 largest economies by 2020. “This increased power will put more pressure on resources and escalate overall competition for top-tier suppliers, although it may be partially offset by weakening prices for the commodities that many of these countries’ economies depend on,” the study noted. “Companies that have not implemented strategies to ensure continuity of supply could find themselves on the losing side of the supply-demand equation.”
- The U.S. economy, which is in the midst of a resurgence, is expected to continue realizing 2 percent growth annually through 2020, and the dollar is appreciating against other major currencies. “While this makes U.S. exports less competitive abroad, imported materials and services that go into U.S. products (cost of goods sold) are also less expensive, which improves the competitiveness of supply chains,” the study noted.
- Continued global violent extremism Terrorism is an ongoing issue, but has been more concerning of late. The National Consortium for the Study of Terrorism and Responses to Terrorism said global terror attaches have increased sixfold from 2,750 in 2006 to more than 16,000 in 2014. Today, companies are at risk of their funds and goods being channeled to terrorism or criminal organizations, too. “As governments work to stamp out illicit activities, tighter rules and regulations will impact international banking laws and shipping routes, potentially affecting speed and ease of use of these networks for lawful business purposes and causing longer lead times and potential supply interruptions,” according to the study.
- While global markets managed to recover quickly from the 2008-09 financial crisis, many saw growth decelerate in the four years that followed, owed to weaker external demand and inadequate responses to a shifting global landscape. Global growth drivers, according to the study, are shifting toward the Pacific Basin, and seven new markets have the potential to see strong growth in the coming years: Chile, China, Malaysia, Mexico, Peru, the Philippines and Poland. “A focus on these seven markets offers firms significant opportunities to leverage the supply power of these emergent leaders and to restructure their value chains to serve these growing consumer markets,” the study found.