Last year, I predicted that we would see two fundamental changes in supply chains during 2014: the advancement of “multi-channels” for sales at nearly all companies, and the reinvention of supply chains to accommodate this growth in online ordering and fulfillment, as well as the new demands by customers and businesses. For the former, we have indeed seen the growth of multi-channels, cross-channels, and omni-channels, across multiple industries. What began in retail has found its way to almost all companies that can sell their products online, whether for B2C or B2B needs.
The reinvention of supply chains, however, has not kept pace with the new demands. Companies in all industry segments have found themselves lagging behind the leaders in selling and servicing all their channels and customer demands. Either their new business strategies are incomplete, or their implementations are stuck. New strategies for order management, distribution networks, fulfillment centers, and business processes — just to name a few — are complex, time-consuming and challenging for companies to redesign and apply change management.
In 2015, however, we expect to see more progress, or else we will see more business failures. The e-commerce giants (Amazon, Alibaba, Google, eBay, etc.) are expanding globally, thus new operational capabilities are becoming known, and traditional best practices are being transformed for survival. While brick-and-mortar retailers are facing the challenges the most, producers and logistics service providers are not protected.
So supply chains will change at even greater paces. New operating models, new product flows, new fulfillment centers, new processes, new best practices and new technologies will be coming faster this year. Most companies are finding their ERP systems are inadequate in providing decision support to supply chain management. At the same time, new cloud-based applications are more available for each of the supply chain mega-processes. We see the best of these new tools being acquired and used by companies in every industry.
Are your supply chains contributing to profitable growth? Are they ready for enabling your company’s business strategies for the changing markets? These are the top two questions for 2015.
Gene Tyndall, Executive Vice President, Global Supply Chain Solutions, Tompkins International