Global supply chains are becoming more and more interconnected, where the events occurring at one side of the world are impacting at the other side, much faster than 15 years ago.
What are the right competencies required for Supply chain professionals, to install competitive advantages in a sustainable manner?
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Operational Excellence
Initial Scene …
Supply Chain concept has evolved during last 20 years, from local pure
Logistic management, very much focused on Cost and Material flow, with
vertical structure and internal solutions oriented, towards a Global interaction
in a digitalized world where Service and Agility are the main differentiators,
and where information flow and knowledge are shared.
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what is the actual scenario in the Supply Chain arena?
what will be the main changes next 10 years?
how to achieve / keep competitive advantage?
can some actions be anticipated?
which supply chain competences will be required?
Some Key Questions…
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Supply Chain 2015. External Forces …
Un-Balance between low cost and high level of services required.
Customization versus Availability. Security of Supply diminished.
Quality is not any longer a clear differentiator, but just a standard.
Loyalty is not as strong as was in the past.
Specialities are becoming standards. Niches are more difficult to find.
Efficiencies are already implemented. What else? How differentiate?
Two major drivers for Demand: Speed, Flexibility.
Focus on Services, more than Products.
Innovation Yes, but at similar Cost.
CUSTOMERS:
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Supply Chain 2015. External Forces …
Substantial shifts in global demographics economic power towards
emerging countries, like East Asia, LATAM and Africa.
Companies needs to provide comparable services worldwide,
independently of sourcing points.
Customer are not tolerating excessive lead times even in emerging
markets.
Communities instead of individual countries: Europe, Atlantic Zone,
Pacific Zone, South Cone, Asia, etc. Impacts on Commercial
Agreements, common legislations, standardization on documents flow.
Global Supply Chains in place, specialized on Niches.
GLOBALIZATION:
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Supply Chain 2015. External Forces …
Strong competition on Global scale. Local companies that were not
competitors are becoming competitors at global level: the “global
village” problem.
Market share is not enough to secure long term profitability, leading to a
more active and tense market environment. Markets are being
acquired, not developed.
All competitors are exposed to similar level of Technology development,
with quick and cheap access to information available on the Web.
Therefore, Cost reduction initiatives and Efficiencies programs are
present in all competitors segments.
COMPETITION:
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Supply Chain 2015. External Forces …
Internet is dramatically changing the way that Companies are
commercializing. New Business models based on Internet, Tablets,
GPS, e-Auctions, e-Ordering, Tracking, etc., are challenging the supply
chain process established not long ago.
More powerful modelling tools are in place, shortening the decision
process, with faster algorithms, higher accurate, decentralized users,
scenarios simulation.
The amount of information available is unlimited, the access to that
information is easy, fast and cheap. Management of that Information is
becoming crucial.
ERP systems broader implemented, with high level of processes
centralization, where business rules are controlled and standards are
secured. Regions needs to follow central Hubs, allowing Performance
benchmarking.
IT & KNOWLEDGE TRANSFER:
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Supply Chain 2015. External Forces …
Communities are strongly influencing the physical flow and planning.
Distribution network in EU, Mercosur, Asia.
Common legislations replacing local legislations.
Pressures linked to a clean, healthy and safer environment: recycling
materials, waste minimization, transport contamination, packaging and
packing materials, permits for transport and storage, time restrictions, .
Supply chain are requested to be re-designed with much more
attention to the end of product use cycle, including returns and
disposal.
LEGAL & ENVIRONMENTAL REGULATIONS:
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Supply Chain Future 2020: the 10 Trends…
1.- Increased Urbanization and the rise of megacities will impact the size of
stores, logistics and distribution infrastructures, among other factors.
2. Aging Population will have economic and political consequences related
to the amount of money spent on necessities like food and drink, and the
type of delivery services, store formats and locations offered to older
consumers.
3. Increasing Spread of Wealth will lead to a growing middle class in
developing regions, impacting consumption and availability of food items and
providing a source of growth for manufacturers and retailers.
4. Increased Impact of Consumer Technology Adoption will be reflected
not only in consumers’ own behavior but also in their ability to influence the
buying behavior of other consumers as the use of social and digital media
continues to spread.
5. Increase in Consumer Service Demands will define new service models,
offered via the Internet, that move beyond selling individual products and will
bring different types of “solutions” to consumers and shoppers.
(*) Source: 2020 Future Value Chain Project
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Operational Excellence
Supply Chain Future 2020: the 10 Trends…
6. Rapid Adoption of Supply Chain Technology Capabilities will enable a
more synchronized value chain with greater visibility and traceability.
7. Shifting of Economic Power to countries like China and India will cause
trade areas to evolve and a new generation of globally competitive
companies from these developing markets to emerge.
8. Scarcity of Natural Resources like energy, water and food will become a
growing issue as demand is projected to outstrip easily available supplies
over the next decade, resulting in increasing production costs.
9. Increase in Regulatory Pressure will be seen particularly for hot-button
areas like the environment, sustainability and food safety.
10. Impact of Next-Generation Information Technologies like cloud
computing will lead to a new way to deal, jointly, with business and
technology in the consumer goods industry.
(*) Source: 2020 Future Value Chain Project
11. 11
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The Challenge on Supply Chain professionals…
Quickly absorb/ incorporate large amount of information on its
background, being able to generate and validate hypothesis. Constant
iteration.
Understand global business interactions, local regulations and economic
developments. Full English is a must, 3rd language even desirable:
Europe: English, German, Spanish or French.
LATAM: Spanish, English, Portuguese.
Stronger involvement with 3 or 4 PLs, as cost pressure and Regulations
will force to work in a Collaborative environment, even with Competitors.
Needs to understand not only own Supply chain, but also the supply
chains from competitors, customers and suppliers. Larger integration.
Be prepared for constant optimizations instead of one-time effort.
Stronger interaction with Product design, Technical development, and
Manufacturing.
Better prepared for Changes; stress resistant & flexibility. It will not stop.
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The Challenge on Supply Chain professionals…
Get closer to customers, as much as Commercial people; understand
customer need´s. Supply Chain professionals should be perceived as
Facilitators.
More demanding environment; it is expected much higher level of
performance. KPI´s domain.
More exposed to Negotiations, not only with 3 PL´s, but also with
Customers, or internal stakeholders such as Peers, St.Comms., Boards.
It must combine Content domain together with People management.
It must be perceived as an inspiring leader for reporting Teams, Peers
and Superiors.
Act as a Change Agent.
Do the right things versus Do the things right.
(the Art of Delegation).
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Main 12 Competencies for Supply Chain professionals
Conceptual Strategic Thinking (Vision)
Learning Ability (Innovation)
Result Orientation
Customer Focused
Leadership (Change agent)
Negotiation (stakeholders)
Collaboration (internal, external)
Entrepreneurship
Decisiveness
Judgement
Communication (oral, written)
Planning and Organizing
Sequence doesn´t represent Priority…
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Last, but not least …
Project Management (Green/ Black belt)
ERP systems (SAP, Oracle, …)
Languages (3) (English, …..)
International exposure
Additional competencies are now necessary to stay competitive…
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Functions within Supply Chain field
Role Abrev
Supply Chain Manager/ Team Lead SCM
Supply Chain Planning (Demand, Supply) SCP
Logistic Manager/ Supervisor LM
Supply Chain Engineering SCE
More functions can be added…