More thoughts on Supply Chains for 2013, top 10 part II

Social remains an enigma but someone will solve that puzzle. Social has been seen as one of supply chains last great frontiers, an ability for companies to get closer to the consumer (because it is all about the consumer!). Social has been seen as a way to get instant demand sensing, detecting issues before they become front page news and even provide customers with better after market assistance. Yet, I have not seen anyone truly take advantage of the social beast. But someone will. Think about the data that could be found from services such as Groupon and LivingSocial as they provide promotions and demand shaping services for local vendors. What about all the social tagging services such as FourSquare, Gowalla and Facebook Places? The data and ability for companies, such as retail and CPG, to access and take advantage of that information could have repercussions through out their supply chains. As companies look to gain competitive advantages, look for the company or companies within the supply chain that can take the most advantage of social to gain that little extra in market share.

Speaking of social, what about mobile?? In last year’s predictions I spoke about the rise of mobility and the impact it will have on supply chains. This will only continue in 2013. Of course supply chains need to think of mobile from multiple angles. Mobile is yet another data source. Mobile is also another manner of getting close to the consumer (see how we are tying in some of what was said above?). When a supply chain company mentions mobile, I always wonder what aspect they are speaking of. The smart supply chain players will determine what mobile means to their supply chain. Is it a data source they want to leverage, is a manner to touch their consumer or is it a way to bring greater efficiencies to their processes? In 2013, the smart supply chain players will determine what mobile means to them – data source, customer interaction, unique user interface or something else? But just saying, “we have a mobile strategy” will not fly anymore in 2013.

And when we discuss mobile can we ignore eCommerce? eCommerce has become a part of our everyday transaction and retail experience since the late 1990s. The reality is, the actual percentage of retail that is done via eCommerce remains small. Less than 6% of US retail was via eCommerce in Q3 of this year (numbers from the US Department of Commerce). But the influence that number has on our supply chains is much greater. As companies, such as Amazon, begin to push for same day delivery, there will be a greater pressure on supply chains to meet these demands created by an eCommerce world. The genie is out to the bottle, 2013 will be a year when the logistical headache created by that genie will impact companies from Best Buy to Ryder – all scrambling to figure out how to meet this consumer expectation.

Governments’ role will become vital to supply chain risk management. Much like 2011, we witnessed some large supply chain disruptions in 2012 due to Mother Nature. Think Hurricane Sandy on the East Coast of the United States. We also saw how human events can have an impact on one’s supply chain. Think the Olympics in London or the looming strike that could shut down the United States’ eastern port facilities. Supply chains have become global, complex and sensitive to disruptions…not a news bulletin. But because of this, governments are the only organizations that can truly ensure that the supply chains are kept up and running. Look for governments to begin to address how they can ensure supply chains are given the latitude to function properly. I might even suggest governments such as those of the United States consider cabinet level personnel to take on this task. Are you listening President Obama?

Public perception will drive supply chain decisions. Think about all the headlines that dogged Apple when the work practices at Foxconn were revealed. We all know that the “world is flat.” This flatness has allowed supply chains to find places and ways to gain efficiencies and lower cost. The flip side of the flatness has been greater openness of communication. When your main outsourced manufacturer leverages questionable labor practices to guarantee your margins…that might not be as easy to keep out of the public eye. The companies within the supply chain that have the greatest brand presence will also be the ones most sensitive to these issues. Look for companies such as Apple to turn a more PR savvy eye to some of their supply chain decisions.


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