By Boris Felgendreher
Supply chain is no longer an afterthought for CFOs, CEOs, investors and board members. As the supply chain rises to be a key concern for businesses, GT Nexus has identified a number of trends that can be expected this year:
1. Networked companies come out ahead.
Collaboration is a critical element of a supply chain and we expect to see more companies fully integrate throughout their network of suppliers and customers. Organisations need to work as an integrated network of companies, with access to the same latest information, working towards a shared mission to deliver results and be ahead of their competitors. Strategies need to be planned and implemented via the various groups to achieve the desired results. A business network will allow companies to be agile, responsive, flexible, and efficient.
2. Siloed companies are falling behind.
Businesses which break down silos by focusing on transforming efficiency, transparency and risk exposure will gain an advantage. Overall net savings can be measured through reduced routing delays and faster reactions to changing trends.
3. Responsibility and traceability.
As businesses expand globally, they are realising the need for transparent and traceable supply chains. Businesses will continue to put their global supply chains in the hands of a safe and secure IT platform.
Major food and drink retailers have found themselves under the critical eye of government policies and customer pressure. With consumers becoming increasingly aware of issues around sustainability and expectant that companies have policies in this area, supply chains need to sit up and listen.
5. Acceleration of the supply chain.
This can be best achieved through partnerships and collaboration. 2014 will be the year when solution providers offer strategic, tailored and easily deployed packages to help businesses accelerate their supply chain.
6. Digitisation of the supply chain.
Supply chain analytics will allow businesses to create useful key performance indicators and incubate innovative ideas to successfully manage service levels. Daily monitoring, sharing, and interpretation of analytics will help businesses plan.
7. Big data.
The potential of big data is becoming evident in all areas of business and this is the case for the supply chain. Businesses that capture and analyse the huge amounts of data generated around shipment and transport will continue to improve efficiency. Companies that take advantage of collaborative solutions to process and analyse this data will reap the benefits of cost reduction, capacity control and risk management.
With increasingly erratic weather across the globe in the past few years, and the effects of climate change being felt, the supply chain has experienced many disruptions. The Supply Chain Resilience 2013 survey highlighted that 62 per cent of business continuity professionals felt “top management commitment to managing the supply chain is inconsistent or totally lacking”. Proactively assessing the risk of disruption and developing a risk management strategy continues to be crucial to meeting supply and demand challenges.
9. Supply chain gains prominence at the C-level.
Today, CFOs, CEOs, investors and board members recognise the value of a good supply chain. They also recognise the significant risks. This will continue as more consumers become conscious of global production. The supply chain is under a microscope and businesses must maintain a balance between growth, profitability, responsibility and customer service.
10. Interest rate volatility will send shocks through global trade.
On 28 January 2014 the Turkish central bank raised the overnight lending rates from 7.75 per cent to 12 per cent. Rapid shifts like this have a huge impact on both businesses and trading partners sourcing from that point. The same volatility exists in places such as China. As the global economic recovery continues with uneven results, countries seek to regain their footing but will still find balancing economic stimulation and devalued currencies a struggle, the result being occasional interest rate shocks.