What will your supply chains resemble in ten years' time? Part 2

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Elaine Porteous.jpgIf an organisation wants to be competitive in the next decade, let alone a significant market participant, then its supply chains had better evolve.

Researchers have proposed seven key strategies for success in the future.
'Succeeding in a Dynamic World : Supply Management in the Decade Ahead', compiled by CAPS Research, A.T. Kearney and the Institute of Supply Management (ISM), was conducted across 260 global and US companies which provided some very interesting results.

The first four strategies outlined in the study, and discussed in October’s SmartProcurement, were: developing category strategies that are robust and forward looking; developing and managing value-adding relationships with suppliers; designing and operating multiple supply networks; and leveraging technology.

This month, we bring you the final three, no less important, strategies. South African based organisations must understand how these will affect them, says Elaine Porteous, Business Development Executive at TechPro Personnel.

5. Collaborating internally across functions and externally with suppliers and customers

The need for an improvement in collaboration both internally and externally has become painfully evident and will be a defining factor between success and failure. Internal relationships between supply chain and procurement people and other functional areas must advance further, particularly harnessing available data and technology, if companies are to make effective use of the extensive information that they have.

Externally, there will be a trend towards competing companies collaborating and creating working partnerships to achieve new business through setting-up joint ventures, especially with small and medium enterprises and BEE-owned companies. This will create challenges for integrating supply chains and cause some tension around competitive advantage. Problems may also arise relating to managing financial and operational risk and protecting intellectual property.

6. Attracting and retaining Supply Management talent

The good news. Tomorrow’s supply chain professionals will shoulder increased responsibility and will be valued more highly within organisations involved in more strategic work. They will be expected to reduce overall costs and develop and execute projects to find new value in the supply chain. To do this they will need to have a broader view of the business so as to contribute to revenue generation and will need to apply skills to leverage external and internal sources of innovation. All this has to be achieved whilst ensuring business continuity and sustainability.

Companies will have access to the same supply market information, the same best practices and tools and the same technology. The difference will lie in how this information is accessed and used, how we work with suppliers and how we harness those tools.

This means that it will come down to the ability and creativity of supply chain and procurement personnel to make the difference, which is a challenge in South Africa where these skills are in short supply. A well developed ability to build relationships with others, both internally and externally will be key.

At the SmartSourcing Conference 2009
TechPro will be talking about Supply Chain Jobs of the future.

7. Managing the future supply management organisation

The centralised model that has been championed over the last decade may need some adjustment. Owing to market differences, there will be a need for local leadership and management, even in global organisations. Technology and knowledge of management systems and processes has enabled virtual working and collaboration across global teams and regional teams. This means that we can utilise best practices in category management and create savings and benefits in major commodities. However, in some cases aggregation of demand may benefit the company overall, but may be detrimental to local business units and this will have to be addressed case by case by not being too prescriptive.

Continued pressure on the headcount in procurement and supply chain will drive more companies towards automation or outsourcing of routine operations. Scarce resources will need to be allocated to the most strategic activities and outsourcing of tactical activities will be undertaken, but with an eye on risk factors.

However, the World-Class Procurement practices outlined in this two part series are only half the challenge - how do South African organisations align these seven strategies with government’s transformation targets?

Don't miss SmartProcurement’s 3rd Annual SmartSourcing Conference, November 10 & 11, at Leriba Lodge in Centurion, which will debate future global trends of Supply Management within the dynamics of local Preferential Procurement.

For further information or registrations, please contact Erieka Santos on 0861 334 326 or email her at admin@smartprocurement.co.za.

Elaine Porteous can be contacted on 011 514 0463 or via email at elaine@tech-pro.co.za.

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