The survey of 31 CEOs from leading third-party logistic providers provides a view into important trends and issues within the Supply Chain Management industry. The surveyed companies represent important players in the supply chain market ecosystem within North America, Europe and Asia-Pacific.
I took a look at the report and here are my key takeaways:
Revenue Outlook is Improving. 25 of the 31 CEOs surveyed reported their companies were profitable during 2010. Three reported they broke even and another three reported their companies were unprofitable. The CEOs in all three regions were considerably more bullish about future revenue growth prospects of not only their companies, but also the regional 3PL industry that the previous year’s survey findings.
Progress Being Made In Sustainability. While there is still much more work to be done with regard to sustainability, there seems to be some progress. Fourteen of the 31 companies reported that they began new green initiatives during the past 12 months and all but 6 of the companies now have formal sustainability groups within their companies.
Near-Shoring As A Trend. 27 of the 31 CEOs report that manufacturing customers have begun to move toward “near-shoring” options during the past year. Drives of this trend include quality control issues and a desire to reduce fuel usage (both for cost reasons and to help curtail carbon emissions)
Focus on Risk Management. The report findings indicate CEOs have been busy implementing new business practices related to risk management/risk sharing; business continuity planning; performance based contracts; and enhanced vendor qualifications. Pressure on 3PLs to share risk with their clients has increased, with 28 of the 31 CEOs reporting that their companies now have performance-based contracts with many of their clients.
Opportunities for Growth. CEOs in all three regions ranked the overall growth of the market for outsourcing services as the most important opportunity. Other opportunities include differentiating on sustainability capabilities and opportunities related to expansion of service offerings.
I subscribe to IdeaWatch, a monthly e-newsletter sent out by IBM’s Institute for Business Value team. The newsletter always provides interesting articles. The articles contain strategic insights and recommendations based on research that IBM’s Institute for Business Value team of analysts and consultants regularly perform. The articles help me stay informed on the critical issues facing business leaders.
Today I opened the most recently newsletter in my in-basket. You can see the full online version at IdeaWatch. Here’s a list of the articles in the current issue:
As mentioned above, you can access the current version of the e-newsletter online at IdeaWatch. From that page you can also access all the previous issues.
If you are not yet subscribing to this monthly e-newsletter, I encourage you to do so. It’s a nice monthly digest that provides with current thought leadership content. To subscribe, you’ll need to go to the subscription center for IBM e-newsletters https://www-931.ibm.com/bin/subscriptions/welcome.cgi?cl=ZZEN and once you register with your email id, you’ll be presented with a list of e-newsletters. Look for IdeaWatch: Business Perspectives from IBM Global Business Services and select it to subscribe.
Today I attended the IDC Manufacturing Insights conference call where IDC outlined its 2010 Predictions for Manufacturing Supply Chains. On the call Simon Ellis, IDC Mfg Insights Practice Director, Supply Chain and Kimberly Knickle, IDC Mfg Insights Practice Director, Emerging Agenda outlined the firm’s recommendations for manufacturer supply chains in 2010
The call started with a overall look at economic trends affecting supply chains disciplines such as procurement, planning, manufacturing and logistics and then moved into the top 10 predictions. The overall theme from IDC is that manufacturing companies need to rethink their supply chain structures and begin to evolve to a variable-cost-driven value network.
Here is a summary of the top ten trends.
Optimization Focus: “Dynamic Optimization” dominates Capability Investment to Support Redefining of the Supply Chain
Sales & Operation Planning: S&OP Will Re-emerge as the Synchronizing Process for Reconciling Supply and Demand
Redesigning Supply Chains: Balancing Supply and Demand Across the Value Chain Will Prompt a Strategic Redesign of the Supply Network
SCM and PLM Convergence: Supply Chain and Product Life-Cycle Management Applications Will Increasingly Converge as Manufacturing Companies Focus on Innovation Delivery
Intelligent Supply Chains: Intelligent Supply Chains Will Put Broader Visibility Burden on Supply Chain Organizations, Both Owned and Outsourced
Globalization: Supply Chain Organizations Will Invest in Capabilities That Facilitate Global Operations
Rethinking Fulfillment: Transportation Capacity Will Tighten, Causing Supply Chain Organizations to Rethink Fulfillment Strategies
Risk Management: The Increasing Pace of Supply Chain Outsourcing/Offshoring Will Keep Risk Management High on the Strategic Agenda, But Investment Will Remain Focused on Building Risk Awareness
Time to Get Smarter? Smart Services and the Need for Persistent Assets Create the Inflection Point for RFID, Sensors, and M2M
Metrics Drive Intelligence: Armed with Metrics, Manufacturers Move from Sustainability Reporting to Intelligence
As the IDC team summarized the call, it was stated that 2010 will be the year of the intelligent supply chain. There will be a focus on developing smarter processes, products, plants, people, and partners. This thought confirms IBM’s Smarter Planet campaign.
IDC held its "IDC Insights Predictions 2010: Retail" web briefing last Wednesday, January 13, 2010. Leading the call were IDC Retail Insights analysts Leslie Hand, Ivano Ortis, and Group Vice President Bob Parker.
The conference call provided insights into current driving forces impacting retailers (including Sustainability, POS systems and RFID, and customer experience) and important IT investment trends for 2010 in the area of supply chain, demand planning, merchandising, and point-of-sale (POS) business initiatives.
Certainly, the economy had a big impact on retail in 2009 and that trend is expected to continue in 2010. However, retail will begin emerging in 2010 with new business models and perhaps new industry leaders.
Here’s a summary of the 10 predictions IDC provided on the conference call.
Growth Strategies: IDC says that in 2010, retailers will seek growth strategies based on “Same Shopper” sales and first time buyers.
New IT Investment Strategies: IDC predicts retailers will launch aggressive technology investment programs to support new business models while reducing traditional IT costs.
Getting More Value From Supply Chains: Retailers will extract more value from their supply chains, responding adeptly to customer, supplier, and regulatory influences.
Devil is in the Details: IDC says that retailers reach nirvana where PLM information informs intelligent automation
Customer Experience: Retailers will focus on customer experience solutions convergence. CRM, SCM, and BI applications on a single source of demand information.
Mobile Shopping: IDC expects retailers will drive mobile consumer interaction and this will usher in the open shopping era.
Demand Information To Drive Customer Loyalty: Retailers will work on building customer intimacy and loyalty while improving brand performance.
Harvesting Intelligence: IDC says that in 2010, retail investment in demand intelligence and BI will be driven by a need to lower inventory costs and be more customer centric.
Sustainability Initiatives: IDC predicts retailers will build sustainable lean enterprises
Social Commerce: IDC cleverly states that traditional retailers are on the Titanic and the approaching iceberg is online social commerce.
The formal part of the call ended with the IDC team reviewing their four pillars of investment for retailers. Here’s a summary of the four pillars.
Drive IT Infrastructure savings
Harvest Demand Intelligence
Drive Improved Customer Experience
Improve The Supply Network
The four pillars seem pretty obvious when I look at them…and you could make the case that those pillars have been important for decades and will still be important for many more decades to come.
IBM’s Plant Location International services have been around for 50 years. This IBM team provides advice to companies on their location decisions, covering all sectors and types of business functions. Over the years, this team has acquired extensive expertise and knowledge on what shapes corporate investment decisions. The team also works with government agencies worldwide for economic development and investment promotion in their efforts to improve and market their locations to investors.
Highlights from the 2009 Global Location Trends report include:
The economic recession clearly affected global investment activity: a decline of 25% in jobs created through foreign investment.
Various 'hot-spots' among the emerging markets were severely affected, as companies postponed or cancelled larger, risk bearing projects.
Stable, mature markets performed relatively better than the emerging markets, still attracting the smaller, consumer oriented projects, and being a safe choice for many consolidation projects (although the majority of these also showed overall decreases).
The widening of global investment continued. Despite the overall decrease in total investment, companies extended their search for markets, talents, and cost efficiency to new corners of the world. In particular, Africa continues to increase its share of global investment.
First indications for 2009 show that the above trends continue up until recently. Q3 and Q4 however clearly show signals of increasing activity. This is unlikely to lead shortly to similar numbers of new jobs as in recent record years, but shows that companies are beginning to change their focus to growth strategies again.