The big questions for the future of supply chain
There is one week left on the Future of Supply Chain survey from SCM World, which invites supply chain professionals to share their views on the issues which will shape the future of the industry.
Kevin O’Mara, Chief Content Officer, examines the big questions ahead of the report being published in November this year.
What technology disruptors deserve immediate attention?
In 2015, the big topics of Big Data Analytics (77 percent), Digital Supply Chain (71 percent), Internet of Things (64 percent) Cloud Computing (56 percent) Advanced Robotics (38 percent) and Machine learning (36 percent) represent the “disruptive and important technologies with respect to supply chain strategy.
But the biggest changes when compared to 2014 are 3D printing (31 percent), Drones/self-guided vehicles (17 percent) and Uberisation (16 percent) have entered the conversation surrounding disruptive technologies and supply chain strategy.
Where are the jobs going?
The survey collects data on countries’ prospects for supply chain investment, capacity additions, and of course – job creation.
The United States leads the way in job creation, with supply chain positions being added at twice the rate as they were being removed. Compare that with the UK, where more jobs were planned to be removed than they were to be created. Mexico, Vietnam and India are the surprising supply chain job creators – with a near 10:1 ratio in adding new jobs.
Looking across the countries included in the survey, there are still a large number of countries planning reductions across supply chains.
What are the biggest risks facing supply chain leaders?
Risks can change every day, week, month and year. Supplier failure has been a big risk across supply chain, but more recently commodity price risks are more commonplace with an increase fear of geopolitical incidents.
Over the next three years’ the major supply chain risks include commodity price volatility (59 percent), Safety/quality issues (46 percent), legal/regulatory issues (46 percent) and a supply shortage of materials/components (40 percent).
What role does social media play in supply chain strategy going forwards?
Social media is here to stay. It is well and truly a part of our everyday lives. The Supply Chain survey has been looking at how social media impacts supply chain strategy results are showing that social media is becoming more and more an important factor.
The survey asked supply chain leaders if they feel social media influences supply chains today, or is more of a future matter.
For sources of real time customer feedback, more people (56 percent) feel it is an impact for the future strategy planning as opposed to the strategy planning of today.
This is a common theme across the survey. 45 percent feel it will inform product enhancement/innovation proprieties, 46 percent think it will improve demand sensing and forecasting and 42 percent think it will offer an improved communication with trading partners – but importantly, in the future.
What skill mix defines a great supply chain professional in 2020?
In the previous surveys, soft skills like communication, influence and change management have been identified as essential skills for supply chain professionals. In the most recent survey of 2015, 90 percent of respondents agree and feel communication and influence is an essential skill as a supply chain professional.
Tied with communication and influence, 91 percent of professionals believe a foundational knowledge of core supply chain functions (plan, source, make deliver) is an “essential” skill. Business strategy (87 percent) and change management (84 percent) are still essential skills.
Technology enablement, while still considered an essential by (58 percent) there is still a large portion of respondents who don’t see it as essential, with (48 percent) considering it as “nice to have”.
That being said, analytics is well and truly “essential”, with 71 percent of respondents identifying it as a key part of a supply chain professional’s profile.
What are supply chain leaders doing about sustainability?
The supply chain survey has been analysing attitudes towards sustainability since 2011 and has seen a rise in waste reduction, turns towards renewable energy, water stewardship and green products.
The survey also looks at the reasons behind investment, is it because it’s the right thing to do and has financial payback? Is it because it’s purely the right thing regardless of payback?
Looking at the respondents, a large majority of company approaches to sustainable initiatives invest because it is the right thing to do and has financial payback. this includes waste reduction (65 percent) sustainable water management (43 percent) and renewable energy (41 percent).
While most of the respondents invest for both the financial return, they are investing because they feel it is the right thing to do. For example, 44 percent of respondents invest in greener products because it’s the right thing to do, regardless of the financial return. This applies for fair labour standards (49 percent), ethical sourcing (50 percent) and carbon offsets (37 percent).
Where are the next generation of leaders coming from?
The question for every business and every industry, who is going to be a key supplier of the future workforce? The top 10 universities for supply chain talent 2015 are:
- Michigan University
- Massachusettes Institute of Technology
- Penn State University
- Harvard Business School
- Arizona State University
- Cranfield School of Management
- Stanford University
- Georgia Institute of Technology
- Cambridge University - INSEAD
- University of Tennessee
Have your say in the Future of Supply Chain
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5 Minutes With: Jim Bureau, CEO Jaggaer
What is data analytics, and why is it important for organisations to utilise?
Data analytics is the process of collecting, cleansing, transforming and analysing an organisation’s information to identify trends and extract meaningful insights to solve problems.
The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions. Spend analysis and other advanced statistical analyses eliminate the guesswork and reactivity common with spreadsheets and other manual approaches and drive greater efficiency and value.
As procurement continues to play a central role in organisational success, adopting analytics is critical for improving operations, meeting and achieving key performance indicators, reducing staff burnout, gaining valuable market intelligence and protecting the bottom line.
How can organisations use procurement analytics to benefit their operations?
Teams can leverage data analytics to tangibly improve performance across all procurement activities - identifying new savings opportunities, getting a consolidated view of spend, understanding the right time for contract re-negotiations, and which suppliers to tap when prioritising and segmenting suppliers, assessing and addressing supply chain risk and more.
Procurement can ultimately create a more comprehensive sourcing process that invites more suppliers to the table and gets even more granular about cost drivers and other criteria.
"The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions"
Procurement analytics can provide critical insight for spend management, category management, supplier contracts and negotiations, strategic sourcing, spend forecasting and more. Unilever, for example, used actionable insight from spend analysis to optimise spending, sourcing, and contract negotiations for an especially unpredictable industry such as transport and logistics.
Whether a team needs to figure out ways to retain cash, further diversify its supply base, or deliver value on sustainability, innovation or diversity initiatives, analytics can help procurement deliver on organisational needs.
How is data analytics used in supply chain and procurement?
Data analytics encompasses descriptive, diagnostic, predictive and prescriptive data.
Descriptive shows what’s happened in the past, while diagnostic analytics surface answers to ‘why’ those previous events happened.
This clear view into procurement operations and trends lays the groundwork for predictive analytics, which forecasts future events, and prescriptive analytics, which recommends the best actions for teams to take based on those predictions.
Teams can leverage all four types of analytics to gain visibility across the supply chain and identify optimisation and value generating opportunities.
Take on-time delivery (OTD) as an example. Predictive analytics are identifying the probability of whether an order will be delivered on time even before its placed, based on previous events. Combined with recommendation engines that suggest improvement actions, the analytics enable teams to proactively mitigate risk of late deliveries, such as through spreading an order over a second or third source of supply.
Advanced analytics is a research and development focus for JAGGAER, and we expect procurement’s ability to leverage AI to become even stronger and more impactful.