The Role of Supply Chain Management in the 21st Century

1
The Role of Supply Chain Management in the 21st
Century

• By Dana Gaspar

2
External Forces That Will Drive Supply Chain
Management

• Consumer Demands
• Instant availability of customized products.
• (Better, Cheaper, and available faster and
  faster.)
• Globalization
• Dramatic shifts in global demographics and
  economic power.
• Parts and product sourcing is going to occur more
  in emerging economies.
• Provide comparable levels of service worldwide.

3
External Forces (contd)

• Competition
• Sources
• Advances in industrial technology
• Information availability improvements
• More venture capital
• Creative business design
• Companies focus will be more on redefining their
  competitive space.
• Small start-ups in foreign countries will take
  competition to a new level.

4
Other Forces That Will Drive Supply Chain
Management

• Information and Communications
• Internet
• Allows customers to shop around, examine every
  facet of each product, and buy most products from
  on-line catalogs.
• In the future, 50 of the business will be over
  the internet.
• Powerful tools
• I2 Technologies and Manugistics use is on the
  rise
• Tools are expected to rise higher levels.

5
Other Forces (contd)

• Government Regulation
• Trade and customs barriers could get stronger and
  affect going global.
• Environment
• New ways for recycling and making products
  eco-efficient will need to be enforced.
• EU has many requirements for requirements.
• Back-ends of the product life cycle will need to
  be paid attention to more.

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Major Paths to Help Future Supply Chains Succeed.

• Flexible, Integrated Design
• Need to develop a fully integrated approach.
• New chain designs will be characterized by
  agility, flexibility, and integration.
• Focus will be on coordination across the entire
  supply chain.
• Will now be able to adjust volumes throughout the
  supply chain as demand goes up and down.
• All skills of supply chain management need to be
  diffused throughout the organization, making
  everyone understand its culture.

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Major Paths (contd)

• Household Replenishment
• Automated fulfillment of consumer demand at home.
• Meets consumer expectations of choice, service,
  and cost.
• Internet will be the driving force.
• Concept allows many tiers in the distribution
  channel to be removed which in turn saves money.
• Freeze-Point Delay
• Customizing the product as late in the process as
  possible.
• Goal is the maximize consumer choice, while
  minimizing the demand-forecasting challenges
  driven by product proliferation.
• Leads to a new class of third-party service
  providers.

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Major Paths (contd)

• Virtual Organization
• Based on intellectual capital.
• No longer uses for factories, warehouses, call
  centers, or logistics of the companies own.
• Companies that do this well will see their market
  value driven by their strengths, and will also
  minimize ownership of the heavier operating
  assets.
• Fast and reliable delivery is a major challenge
  that will be overcome.

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Six Steps Companies Can Use To Prepare.

• Diagnostic
• Are we ready for what is up and coming?
• Strategy
• To what extent can the firms integrated
  sourcing, production, and distribution
  capabilities be tuned to drive superior economic
  value and customer satisfaction?
• Business Case
• The case must be made to combine a clear sense of
  direction with detailed examples of the gains in
  service and cost to be derived from closer
  horizontal integration.

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Six Steps (contd)

• Brains not Braun
• Establish a hard-hitting but thinly staffed
  supply chain management activity in your company.
• E-commerce
• Plan for Internet driven supply chains.
• Global Providers
• Must develop more of the higher-level skills
  involved in coordination entire supply chains.

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Sources

• Bovet, David. The Brave New World of supply
  chain management. Supply Chain Management
  Review. May 1998. www.mngt.waikato.ac.nz/depts/mns
  s/courses/456/scm/four.his.htm.