Why Supply Chains in 2015 Will Be Substantially Different Than Today

A lot of supply chain 20xx lists are produced each year, and while many aren’t worth a second glance, Dan Gilmore over on Supply Chain Digest has one of the best top 10 lists on what supply chains will look like in 2015 that you’re going to find. But what’s even more important than the items on his Supply Chain 2015 is why supply chains are being forced to change. I’ll attempt to answer that a bit in this post.

  • Fuel Prices Will Spike Again … to $200 a barrel
    Global demand is increasing daily. Emerging markets want their western lifestyle and the developed world is doing a very poor job of latching on to renewable sources (like wind, water, and solar … combined, these sources could easily power the Global Grids, but it will take a significant change in mindset as well as a very significant up-front investment for them to do so).
  • Generation Y Will Boycot You With Their Wallets if You’re Not Corporately Responsible
    In most surveys, your CSR policy is a greater concern to most job candidates than the size of the paycheck you’re offering. That’s because environmental consciousness is part of who they are and if they have a choice between two products and one is from a company that is not known for its environmentally friendliness, regardless of cost, guess which one they are likely to choose?
  • Product Lifespans will Compress Further
    As we haven’t reached the limit yet, our market induced appetite to always have the latest and greatest will continue to push manufacturers to innovate faster to keep their marketshare. If you can’t keep up, you will be pushed out.
  • Time-to-Market in Emerging Markets will be King
    The economies of Brazil, India, and China are poised to take off like a rocket … and they want what we got. The first company to identify a need and offer an affordable product to fill it will make the $2B in revenue P&G made in its first year on the launch of Tide ColdWater (the first detergent designed for cold water) look like petty cash. (Remember, there are 1.2 Billion people in India and 1.3 Billion people in China and the middle class population in both of these countries will soon exceed the total U.S. population, if they haven’t already given the current state of the U.S. economy and the real jobless rate of 17.5%.)
  • Inventory Costs will Continue to Increase
    Not because raw overhead costs will increase, but because inventory-related losses due to theft (which costs retailers alone 33.7B in the US) and obsolescence (which will force you to sell or dispose of inventory at a significant loss).
  • SaaS Will Be Better, Faster, Cheaper in Every IT Domain
    While there may still be application domains where it’s not there yet, you can count on that not being the case for much longer. Furthermore, even if you need your own single-tenant instance or data on site, you’ll soon see full-service completely hands-off managed SaaS where the application self-updates and self-replicates because your “instance” is part of the cloud on which it resides.
  • Real Time Information Will Be Ubiquitous
    Cheaper-than-dirt RFID and the emergence of web-based SaaS will quickly take us from an age where we don’t have enough visibility to where we almost have too much. Will you be ready to deal with it?
  • New Breakthroughs in Automation Will Emerge Globally
    Japan is already giving us robot secretaries and robot cats to keep them company. New production technology improvements can’t be far behind!
  • Emerging Markets Are On Their Way to Becoming the Dominant Global Markets
    As noted above, Brazil, India, and China will soon be three of the top five global economies. (China already is, but it will soon be #2.) Germany, France, and the UK will be dwarfed in comparison. If you’re not aligning your supply chains to serve the new GDP super powers, you won’t be a major player this century.
  • Everything will be Digitized
    iTunes has already killed the CD star; even BlockBuster understands that high-speed broadband will kill the DVD star; and when every smartphone has a 10 MP camera …

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