Tuesday, February 25, 2014

21st century supply chains and challenges

While reading about the 21st century supply chains, I came across a very good presentation named “The Role of Supply Chain Management in the 21st Century” by Dana Gaspar. The presentation gives insights about what is expected to become important to the supply chain management and the potential challenges that might be encountered in this century.  

Consumer demand for better, cheaper and instant availability of the customized product is increased. Globalization enables great levels of service worldwide. Advances in industrial technology, improvements in the information availability, more venture capital, creative business designs are the sources for the increasing competition. In the future, companies’ focus would shift to redefining their competitive space. Small start-ups in foreign countries would take competition to a new level.

Information and communications are two features that would impact the future of the supply chains. Internet allows customers to shop around, examine every facet of each product, and buy most products from on-line catalogs. 50% of the business is estimated to realize online in the future. Moreover, trade and custom barriers could get stronger affecting going global. Additionally, new ways for recycling and making products eco-efficient would necessitate enforcement.

Chain designs would be characterized by fully integrated and flexible supply chain design. As the demand increases and decreases, supply chains would be able to adjust to fluctuating volumes. Everyone in the company needs to understand the organizational culture and all the skills of the supply chain management need to be accepted throughout the organization. Meeting the consumer expectations of choice, service and cost would be the core to the supply chain management in the future.

Internet would be the driving force and allow saving money by removing many tiers in the distribution channel. It would become important to customize the product as late in the process as possible in order to maximize consumer choice, while minimizing the demand –forecasting challenges driven by product proliferation.

The companies no longer use for factories, warehouses, call-centers, or logistics of the companies own. Fast and reliable delivery is an important challenge that supply chains would have to overcome in the future. In order to meet the customer demands, the companies should have a strategy. There comes a question to mind: to what extent could the company’s integrated sourcing, production and distribution capabilities meet the customer demands by driving superior economic value?  

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