Our 2011 prediction called for a renewed commitment to strategic sourcing and global distribution and investments in new distribution channels. We also stated hat those companies that make these changes, with the proper alignment of growth and operations, would see profitable growth.
Despite the sluggish global economy, and its risks and uncertainties, those companies that had profitable growth this year did, for the most part, meet these criteria. New distribution channels, and emerging markets, expanded. And the smart companies and their logistics service providers stepped up to enter new markets and create more efficient supply chains.
The uncertainties of demand will challenge sales forecasts and operations in 2012, and the risks of global supply chains will persist. The dominance of China, and importance of Southeast Asia, will persist, despite some sourcing diversification in most industries. More corporations will recognize China, with its fastest growing economy, as well as others in Southeast Asia, as significant customer markets.
In 2012, I expect to see more movement toward demand-driven supply chains. Because demand is so volatile and uncertain, companies will place a premium on balancing supply with demand, and seek near real-time information on which to base operational plans and execution. Connecting trading partners from point-of-sale back to suppliers, with expanded visibility of flows of goods, cash, and information, is now feasible and will grow in implementation across industries.
We also expect to see supply chain decisions based more on total factors. As supply chain concerns advance more into the C-suite, we are seeing increased understanding of how they fit in the entire enterprise. Tax-effective supply chain management will gain in importance; as will real estate, energy management, security, and public-private incentives.
The true optimization of supply chain networks must be holistic, and we are learning how to consider all the factors for locating production and logistics facilities, goods flows and storage, and product positioning.