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The closing 2007 can be celebrated as a good year for supply chains. No significant disasters, hurricanes, tsunamis or bubbles disrupted the flow of goods to and from the United States. Today, in an increasingly interdependent global economy, supply chain personnel all over the world contribute significantly to keeping us fed, entertained, clothed and safe. Some more privileged than others maybe, but affordable by many! But what does the year ahead hold for the supply chain?
Looking Ahead: Is That a Wave or a Tsunami?
In all tsunamis, there is a period of early warnings and signs of the inevitable force of nature to follow. Those who can sense and respond intelligently have the best opportunity to reap the rewards of their decisions.
Globalization is an economic tsunami that has been set in motion, creating new supply chain dynamics. For CEOs, CFOs, CIOs and supply chain executives responsible for making decisions, globalization presents great opportunities and challenges. The right decisions will determine the future prosperity of your enterprise. The wrong decisions will take their toll on the enterprise and its trading partners. Previous business models and processes no longer provide a competitive advantage. It is time to innovate and change strategies.
Early Warning Signs
What are globalization's early warning signs that supply chain executives must take heed of as they plan for the year ahead? They come from different quarters and in various shapes and sizes. Here is a sampling:
| Signs | Impact |
|---|
| • Falling dollar value | • Procurement & logistics negotiations impact financial supply chains |
| • Oil price exceeding $100 a barrel | • Rising costs |
| • Mergers and acquisitions of IT application vendors | • The big squeeze |
| • Security threats and regulations | • Compliance |
| • Mega-container ships | • Redesign of physical supply chain networks |
| • Web 2.0 & Supply Chain 2.0 technologies |
| • Product and process innovation |
| • Better, faster and smarter supply chains |
Toward the "Visual Supply Chain"
As manufacturing continues to move offshore, so will procurement, logistics and finance. Yet existing applications and business processes cannot sustain a common, repeatable decision-making process across geographically dispersed procurement, logistics and finance personnel. As a result, new technologies are required to keep financial and physical supply chains in sync 24/7.
End-to-end supply chain visibility has become essential to manage an enterprise. Existing business processes and management of supply chains are focused on the wrong end of the supply chain. The focus needs to shift to the start of the global supply chain, which begins offshore. Enterprises with the ability to see the entire supply chain will have a competitive advantage. By leveraging technology to create a "visual supply chain," these enterprises will be more agile and better prepared to respond to the next supply chain tsunami.
How will this affect you, the supply chain executive? Visualize this: A "smart device" in the palm of your hand, leveraging a global network of applications, radio frequency identification (RFID), GPS and wireless communication technologies, showing you in real time precisely where in the world your "stuff" is in the supply chain and whether it will arrive on time. This technology exists today and offers you the opportunity to make the right decisions to ensure the prosperity of your enterprise.
Visual supply chains are a reality making next-generation supply chains better, faster and smarter. You ain't seen nothing yet...
About the Author:
Subhash Chowdary is founder and CEO of Aankhen, a provider of "Supply Chain 2.0" solutions, consulting and application development services spanning financial, physical and information supply chains. Chowdary's previous experience includes founding See Commerce (formerly VIT) and managing the development and deployment of supply chain applications at several large multi-national organizations. More information at www.aankhen.com.
author: By Subhash Chowdary