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The Supply Chain Management Blog covers the latest
in SCM strategy, technology, and innovation.

Mapping the Next Milestones in the Supply Chain

When we look back at 2015, one of the biggest themes has been how supply chain has embraced the Cloud. That’s not to say that the sector was a stranger to the Cloud before; rather, that this year was marked by the industry starting to factor the Cloud into its wider business strategy, instead of as a technology model to explore and trial.

We’re still some way from cross-operational adoption of the Cloud. Some parts of the supply chain are inherently more Cloud-friendly than others; for example, those areas that are more used to sharing supply chain data with external organizations. In areas where businesses have traditionally outsourced operations, such as transportation, we’re seeing rapid and widespread Cloud adoption; whereas for functions such as warehousing and product lifecycle management, the Cloud is only just beginning to penetrate.

Yet the success of Cloud implementations elsewhere in the supply chain points the way to a future where it becomes a fundamental part of SCM strategy. Looking forward, then, what other developments might we expect to emerge in 2016?

Cloud adoption spreads

As the benefits of using the Cloud becomes more widely appreciated in the industry, we will see the technology increasingly used for supply chain process innovation. This is in response to a growing realization that the one-size-fits-all approach to SCM is no longer fit for purpose. As businesses becomes ever-more globalized, and customers become more sophisticated and demanding, organizations are under greater pressure to localize their supply chains so that they can provide personalized products and experiences to consumers.

The challenge facing firms is thus how to continue orchestrating supply chains on a global scale, yet with the ability to tailor their operations to specific markets. Unsurprisingly, this is a tricky job to get right, and can only be achieved with sophisticated technology. In 2016, we will see organizations harness the power of the Cloud to provide innovation, personalization and localization of their supply chains for every market in which they operate.

The war for talent

Much has been written about the skills crisis facing the workforce today, and the supply chain sector is by no means immune to this talent shortfall. We will see this in both the manual and “intellectual” facets of the industry: not only does the supply chain face a finite amount of factory, warehouse, and transport workers, but it must also contend with stiff competition for knowledge workers, who are in high demand across every industry sector – and often between business units at the same company.

The supply chain function sometimes doesn’t do the best job of explaining what stimulating and challenging careers it can provide. The businesses that will succeed in the war for talent will be those that can provide a transformational talent management strategy, and which understand how to both sell the benefits of working in the supply chain to the new generation of millennials coming into the workforce to establish and operate the innovative digital supply chains of tomorrow, as well as retain and transfer knowledge from the experienced “greybeards” who have developed and operated the efficient supply chains of today.

Product and service innovation

One of the biggest challenges facing manufacturers is the spread of commoditization, which is making it harder for businesses to differentiate themselves on product alone in order to drive sustainable growth. That’s why one of the big themes of recent years – and one which is set to define 2016 – is how businesses can deliver unique and incremental value to their customers. One key example is how firms can drive incremental value by selling services and experiences, rather than just mere products.

Effective data analytics is key to these initiatives’ success. The large number of different software applications within supply chains is great for planning and execution, but increasingly businesses are coming to understand the inherent value of the data that resides in these systems. In 2016 we will see businesses move away from the operational side of data management and towards a more holistic, big data-driven and Internet of Things-driven, analytics-based approach. The data and information, both static and in-motion contained in supply chain applications and processes combined with unstructured data from external sources will enable businesses to develop a deep and meaningful understanding of their operations and strategy, including the root cause and trend analysis that will enable them to continuously improve the way that deliver and tailor products or services to their customers.

It may be that these developments fail to grab many mainstream headlines in 2016, but we shouldn’t underestimate the impact that they will have on business success – or failure – in what looks to be another year of cut-throat competition.

Read on about The Internet of Things (IoT): Opportunities for Smarter Supply Chains here

Download IDC’s report: “The Path to Supply Chain Cloud” here

To learn more about Oracle Supply Chain Management applications visit www.oracle.com/scm

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