Published on February 22, 2014
Supply Chain Management in 2030: Shape of things to come P.P.Sengupta
Topics Supply Chain in the VUCA world Today’s leading supply chains Economic megatrends Business mega trends Technology megatrends Supply chain game changers How supply chain of 2030 will look “Black swans” in supply chain P.P.Sengupta 2
Features of today’s best supply chains Agile Visible Collaborative Flexible Tightly co-ordinated Lean, Just in time comp P.P.Sengupta 3
Supply Chain in the VUCA world VUCA “New Normal” P.P.Sengupta 4
Best supply chains in the world, 2013 , Gartner Group 1 2 3 4 5 6 8 Apple McDonald's Amazon.com Unilever Intel P&G Samsung P.P.Sengupta 9 Coca Cola 10 Colgate 11 Dell 12 Inditex 13 Wal-Mart 14 Nike 5
A few Supply chain leaders and their distinguishing marks HUL McDonald GM Amul Al Quaeda P.P.Sengupta 6
A modern Supply chain is like a symphony An orchestra , where dozens of string, brass, woodwind, and percussion instruments play their own tunes to create a perfect piece of music. Similarly , in a well-coordianted supply chain ,the trading partners collaborate to create a perfect harmony bringing superior value to their customer. P.P.Sengupta 7
The bloodline of a supply chain “The bloodline of today’s supply chain is IT . Without it , it drops dead“ P.P.Sengupta 8
Making prediction is risky Let’s rather look at the Megatrends
Famous short sighted predictions “I think there is a world market for five computers” – Thomas Watson, CEO, IBM 1943 "We don't like their sound, and guitar music is on the way out." -- Decca Recording Co. rejecting the Beatles, 1962. "640K ought to be enough for anybody.“ Bill Gates, CEO, Microsoft, about computer hard disc size , 1981 P.P.Sengupta 10
The most embarrassing one "The concept is interesting and wellformed, but in order to earn better than a 'C', the idea must be feasible." -- A Yale University management professor in response to Fred Smith's paper proposing reliable overnight delivery service. (Smith went on to found Federal Express Corp.) P.P.Sengupta 11
Pace of Change
Pace of Change Human race’s 650 0f 800 lifetimes spent in caves All major technological changes taken place in our present lifetime Only in last 70 lifetimes , communication from one to next possible 13
Pace of Change Year Speed 6000 BC Fastest transportation Camel Caravan 1700 AD Mail Coach 10 mph 1825 AD Steam engine 13 mph 1880 AD Steam Locomotive 50 mph 1980 Space craft 18,000 mph 2010 Space craft 36,000 mph 8mph 14
Economic mega trends 2030
Economic mega trends 2030 Intensifying competition for ﬁnite resources . "Asia,“ will surpass the combined economic and military might of the Europe and the United States G7 will be replaced by E7 India will become the youngest nation in the world 2 billion jobs will disappear by 2030 Consumers will learn to live with no waste Wages in Asia will rise to European level on PPP basis P.P.Sengupta 16
Business mega trends 2030
Business Mega trends 2030 Economy will be Spawning New, Fast-Growing Entrepreneurial Companies. Collaboration will be common , even among Competitors Consumer choices will explode. The next billion of consumers will not be “another billion” P.P.Sengupta 18
Business Mega trends 2030 “War for Talent” will intensify Consumers will be increasingly concerned about a brand or product’s so-called SECH rating Crowdsourcing will become increasingly popular Social Media will integrate with Business P.P.Sengupta 19
Business Mega trends 2030 Reducing carbon foot print will be a business compulsion Terrorism will increasingly bother business Speed would become the new normal Transaction costs will fall dramatically P.P.Sengupta 20
Business Mega trends 2030 Regulatory pressures will rise Mass customization will be the order of the day The cost of making things will get lower and lower. The cost of moving things will get higher and higher . P.P.Sengupta 21
Technology Mega trends 2030
Technology megatrends 2030 “ Big Data” will be the key to innovation Industry 4.0 (M2M) will be a reality. Cognitive Computing will commence commercial application. SMAC will rule All devices will converge . BYOD a new normal P.P.Sengupta 23
Technology megatrends 2030 Additive manufacturing (AM) will be firmly in place Five potential platform technologies —nanotechnology, genomics, artiﬁcial intelligence, robotics and ubiquitous connectivity will thrive Pervasive Networking will dominate P.P.Sengupta 24
Technology megatrends 2030 Web 2.0 will mature to Web 3.0 as Internet of things Semantic web will thrive Collaborative IT infrastructure will be popular Virtualization will be complete Real time data mining will become a possibility with everything on the cloud. P.P.Sengupta 25
Game-changing shifts : Supply Chain Management 2030
Seven Game changing shifts in SCM Absolute value for the firm to relative value for customers Forecasting to endcasting (demand management) Push to On-demand service Vertical integration to virtual integration P.P.Sengupta 27
Seven game changing shift Adversarial relationships to collaborative relationships Incremental change to a transformational agile strategy Information hoarding to information sharing and visibility P.P.Sengupta 28
How supply chains of 2030 will look like ? P.P.Sengupta 29
What will be the new signatures of SCM? Risk Intelligent Personalized omni-channels Slowgistics Services of Supply Chain orchestrators Real time SaaS model Green and Sustainable P.P.Sengupta 30
“Black Swans” in Supply Chain The Unknown Unknowns : Low probability events with high impact
“Black Swan” events impacting SCM A severe pandemic Faster-than-forecast climate change Collapse of the European Union Russia joins NATO Collapse of China (or its embracing of democracy) World war or Massive Cyber attack A sudden retreat of the U.S. from global affairs A solar geo-magnetic storm P.P.Sengupta 32
Black Swan events in Supply Chain Supply Chains of 2050 will be completely “self healing” and able to predict “ Black Swans “ by creating “process playbooks”. Process playbook is systematized set of actions to take when supply chains face disruptions . It learns key insights and build muscle memory to deal with such future events. P.P.Sengupta 33
What a SCManager Will Do in 2030 Strategic, integrated customer value management, ”Virtual plant" management Continuous product and process improvement Continuously innovate Cost and profitability targeting, New product and supplier development P.P.Sengupta 34
What He Will Not Do in 2030 Routine purchases or sourcing or re-buys Signing contracts , purchase orders or SLA s. ”Fire fighting” Inputting information Inspection P.P.Sengupta 35
Two Things That are Sure to Happen Supply chain management will be a mission critical, “top of the list” activity in your organisation Technology that will be used in SCM will make today's supply chain Management systems look like stone-age. P.P.Sengupta 36
Three new paradigms Artificial intelligence will play a central role in all supply chain activities. Supply chains will be branded and marketed. Logistics operations will be paperless and "near laborless." P.P.Sengupta 37
Five Key Trends for Future 1) Supply chains will not only connect with other supply chains, but also with transportation systems, financial markets, electric power grids and even natural systems like rivers and weather patterns. P.P.Sengupta 38
Five Key Trends for Future 2)With so much embedded intelligence, SCM can progress from decision support to predictive capability. Dashboards on devices, perhaps not yet invented, will display the realtime status of procurement orders, fulfilment status, sources of supply, pipeline inventories and customer orders . P.P.Sengupta 39
Five Key Trends for Future 3) Smarter supply chains will take advantage of unprecedented levels of interaction – not only with customers, suppliers and IT systems in general, but also among smart objects that are warehoused or even flowing through the supply chain. P.P.Sengupta 40
Five Key Trends for Future 4) This extensive interconnectivity will facilitate collaboration on a massive scale, hitherto unknown . Worldwide networks of supply chains will be able to plan and make decisions collectively. P.P.Sengupta 41
Five Trends for Future 5) Intelligent supply chains will assess hundreds of constraints and alternatives, allowing decision makers to simulate various courses of action. It would instantly reconfigure supply chain networks when disruptions occur. P.P.Sengupta 42
Five Key Trends for Future It could acquire rights to use physical assets like production capacity, distribution facilities and transportation fleets on demand through virtual exchanges. Equipped with sophisticated modelling and simulation capabilities, the smarter supply chain will move past sense-andrespond to predict-and-act. P.P.Sengupta 43
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