Friday, December 9, 2011

Trends in Supply Chain in 2011 and 2012 from the Supply Chain Shaman

For my final blog post, I thought I'd write about a blog that I found that I found interesting.  It's by a woman who refers to herself as the Supply Chain Shaman (very modest), and she has some really interesting insights.  Most interesting to me were what she viewed as the biggest trends in the supply chain industry in 2011 and what she believes will be the biggest trends in 2012.

The three things she listed as trends of 2011 were:

1.  Supply chain disruptions - The first blog I did was on the floods in Thailand.  Couple that political upheaval and the tsunami in Japan, and it seems like this year really showed how resilient and robust supply chains need to be.  Even the smallest of parts can halt an enormous supply chain.  Especially in areas where natural disasters are common, back up plans must be a built in and tested part of the system.
2.  Supply chain and the increase in labor costs - Lora (that's her name) talks about how supply chains mostly came about to cash in on the incredibly low cost of labor in countries like China.  But now that labor wages are rising (still no where near as much as US wages, but still significant), supply chains must stop being about simply saving money and start being about efficiency and what is best for the product.  It's interesting that something that began as a simple money saving process has revolutionized the manufacturing industry to the point where it can't be just about cost anymore.
3.  Increase in chief supply chain officers - I personally found it incredibly interesting that a CSCO is becoming a more and more common role.  I remember (as an Information Systems major) when I was so excited that a chief information officer suddenly became a necessary position for most companies.  It seems that supply chain is following suit!

A couple of things she listed as possible trends of 2012 that I found interesting were:
1.  Outside-in Supply Chains - I know we talked about this briefly in class, but she speaks of how important it is to create a supply chain from the outside in.  You shouldn't figure out a process that you can improve and then see how suppliers can help.  Instead, you should see where expertise can be found in the market and choose to improve your in-house processes by utilizing everything you can.  This is such a new way to think about it, and I wonder how long it will take people to wrap their heads around it.
2.  Safe and Secure Supply Chains - Lora writes that as legislation on supply chain safety in food and pharmaceutical markets becomes more common, supply chains will have to take a closer look at every detail of the chain to see if things are safe and sound.  I also imagine that as more people begin to demand organic and moral options, supply chains are going to have to know exactly where and how every piece of the chain comes from.  
3. Supply Chain Sensing - The last thing I found super interesting from Lora was her statement that supply chains had to stop responding and start sensing.  I remember in Drivers Ed when my teacher told us that to be a safe driver, it's not enough to just have quick reaction time.  You have to foresee problems and be ready with solutions.  It must be the same with supply chains.  I did a blog a couple of weeks ago on how the US foresaw that problems in Afghanistan could disrupt supply chains to soldiers, and began reworking those supply chains months before matters escalated.  

Anyway, I found those things interesting as we finish the class.  It's so fascinating to me that, since the area of supply chain is so new, we really will get to see huge jumps forward in the next years.  Can't wait!

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