4 major supply chain trends in 2014



Trends2014.jpgIn recent years, the on-going quest for efficiency and flexibility and the impact of emerging technologies, innovation and ever-changing customer demand, has seen the South African supply chain mature from a corporate function into an enabler of growth and a strategic weapon, providing value for customers’¹, Tech-Pro Personnel tells SmartProcurement.

Highlighting the increasing importance of global supply chain management, the World Economic Forum’s Outlook on the Logistics and Supply Chain Industry 2013 found that “if all countries were to improve their logistics performance and reduce supply chain barriers to just half the level observed in the best-performing country in their respective regions, global GDP could increase by 2.6%”.²

2014 and Beyond

Four major trends – collaboration, big data, talent scarcity and sustainability – are set to shape the future of supply chain management in 2014.

1. Collaboration will take centre stage

In recent research, the University of Tennessee listed the shift from adversarial to collaborative relationships as a “game-changing trend” in supply chain management.³ Effective collaboration, enabled by information flow, creates greater upstream and downstream visibility, reduces costs, improves customer service and stimulates growth.

Overall, collaborative relationships allow for more agile, responsive and flexible supply chains. As more South African supply chains start to derive real benefit from collaborative relationships, collaboration will take hold.

2. Big data and predictive analytics

‘Big data’ is a key technology trend impacting supply chain management, with 60% of respondents to a recent BVL International study indicating that they plan to invest in big data – or business intelligence – analysis tools within the next five years.

A recent innovation in the BI space is predictive analytics.

Defined by Gartner as “the analysis of structured and unstructured data using statistics, descriptive and predictive data mining, simulation and optimization to produce insights that query and reporting tools are unlikely to discover”, predictive analytics takes business intelligence to new levels, enabling better forecasting, optimisation and scenario planning, while driving productivity and growth.

The upside? Gartner estimates that companies who manage big data and use predictive analytics effectively can expect to grow by 20% more than their peers.

3. Talent scarcity will impact competitiveness

Talent scarcity, across all areas of the supply chain, is a key issue currently facing industry, with 70% of respondents to BVL International’s 2013 Trends and Strategies in Logistics and Supply Chain Management study reporting a shortage of skilled staff.

The study suggests that the most important strategy for dealing with talent scarcity is education – particularly, specialised training and qualification programmes offered through co-operation with universities and research institutions.

Additional strategies for overcoming this issue include encouraging skills specialisation, particularly in vital new technology areas; internal talent development and the marketing of supply chain and logistics management as a career.

4. Increased focus on sustainability

The many benefits of sustainability, including reduced environmental impact, long-term cost savings, heightened competitive advantage, improved corporate image, product and service innovation and better customer relationships, make it increasingly important to business success.

Issues – like effective measurement systems and limited resources – remain.
However, with more than 55% of the respondents to BVL International’s study indicating that “green issues are part of their logistics strategy”, it is likely that sustainability will remain a hot topic in 2014.

What trends will dominate supply chain in 2014? Are you positive about the outlook for 2014? How will supply chains create the flexibility needed to respond to changing customer demand? Join our discussion on LinkedIn.

¹: ‘Supply Chain Reaches the C-Level’ from Episode 6 of ‘Supply Chain Pioneers’, Supply Chain Quarterly, Quarter 3 of 2013
²: ‘Outlook on the Logistics and Supply Chain Industry 2013’, World Economic Forum, 2013
³: ‘Game-Changing Trends in Supply Chain’, Supply Chain Management Faculty at the University of Tennessee, 2013
⁴: ‘Trends and Strategies in Logistics and Supply Chain Management: Embracing Global Logistics Complexity to Drive Market Advantage’, BVL International, 2013
⁵: ‘Gartner Taps Predictive Analytics as Next Big Business Intelligence Trend’, EnterpriseAppsToday, April 2012

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