Question

Trends Changing Supply Chain Management

After reading the Hitachi Consulting White Paper titled, Six Key Trends Changing Supply Chain Management Today, from your perspective choose the two most important trends from the list of six; explain each trend and why you feel it has the most impact on supply chain management today. Be sure to include a real life example of a company that has been impacted by each of the two trends that you have selected.

Answer 1

The 2 most important trends Changing Supply Chain Management (SCM) are:-

a) Shortened and more complex product life cycles

b) Closer integration and collaboration with suppliers

The above trends can be

Trend 1 - Demand Planning;

Is the first step of SCM because unless knowing the quantity of Sales to fulfil. Organizations won’t be able to purchase required Raw Material from Suppliers.

E.g. unless knowing the Bookings of Car from the Dealers & Showrooms. Car Manufacturer cannot manufacture specific Model & Quantity of that Particular Car.

Trend 2- Globalization;

Today World is called an Global Village-wherein borders are not an issue for good quality of Raw Material/ Service Requirement.

E.g. ZARA (Global #1 Clothing Manufacturer) imports Fabric (Unstitched Cloth) only from Suppliers in India & Brazil

Trend 3- Increased competition and price pressures;

There is high competition Pressure offered at the less price as there are always limited number of suppliers in the same industry providing the best quality of raw material. Hence there is a high competition in Supplying parties to partner their Customers which is a part of Business-to-Business.

E.g. in Government Projects & Initiatives every Organization wanting to win a Government Contract commits for Best Quality & at Lesser Price.

Trend 4- Outsourcing;

It is always advisable for Organization to focus on the core strength & get rid of weakness. Letting off the weakness to other organization & reducing the risk is much better option in Business which is called as "Outsourcing".

E.g. Car Manufacturer will focus only on Design & Quality of Car but not on Advertising which it will provide the work to Advertising & Digital Media Companies for Ads.

Trend 5- Shortened and more complex product life cycles;

Few Industries are been characterised by Shorter Product Life Cycle & More Improvements in the Next Products due to high demand of Customers.

e.g. The Mobile Phone Industry wherein the Life Cycle of each Product (Mobile Phone) is decreasing day-by-day mainly due to:-

1) Continual Improvement in Products (of the same Company) e.g. Companies launching Model-1, Model-2, & so on. Every year

2) Intense Rivalry (Competition) demanding more High Quality Products at a lower cost.

Trend 6 - Closer integration and collaboration with suppliers

Closer Supplier Integration is essential today to get the Product & Service Quality to the End Customers as Customers always avoid to change & to adopt new things. Supplier Integration is currently a Competitive Advantage in Today’s Business world given the Consistent Quality.

E.g. Change of Supplier in Food Industry (QSR-Quick Service Restaurants) e.g. change of either in the taste & specifications of Burger (Bun-supplied by Supplier) in McDonalds can be instantly identified by the Customer & can negatively impact on the Sales of McDonalds Burger.