Bookmark and Share

'Tis the Season: S.F. Roundtable Predicts the Future of SCM

Never mind those expert consultancies and handsomely compensated analysts who purport to tell us the future of supply-chain management. The real answers can be found in an event that's held once a year in the heart of Silicon Valley. With dinner thrown in as well.

‘Tis the Season: S.F. Roundtable Predicts the Future of SCM

For the past five years, the San Francisco Roundtable of the Council of Supply Chain Management Professionals has staged a year-end meeting at which a handful of practitioners offer their visions of the coming 12 months and beyond. Fellow panelists and audience members then get a chance to vote on the plausibility of each prediction.

Whether these self-appointed seers actually possess 20-20 foresight is a subject for debate. As far as I can recall, they’ve yet to be egregiously wrong, but time will be the ultimate judge. In the meantime, here’s what’s the SFRT’s latest collection of prognosticators believes the future holds for supply-chain executives.

Prediction: Planning and logistics is finally moving toward a real-time environment, said Jim Miller, vice president of worldwide operations with Google, Inc. (This is the man who declared last year that “the Chinese miracle is kind of over.” Was he wrong?) Mobile computing and the internet are combining to make real-time a reality at long last. The capability is becoming a defining feature of leading supply chains, which are increasingly being run on data mined in large part from social networks. The fashion industry is among the sectors that are leading the charge.

Response: Not an especially controversial view. Panelist Kerry McCracken, vice president of business architecture and delivery with Flextronics, said the retail business “runs on trust and people’s laziness. Eventually, everybody is very happy to let somebody do something for them, but they have to trust that you’re going to do a good job on their behalf.”

Michael Hester, head of planning, allocations, distribution and logistics with BevMo, said his company intends to “mine social media to see what people are interested in…. We will marry that into our customer database and decide whether we need to order more or less.”

Mark Buck, MOD global supply chain and procurement leader at Bio-Rad Laboratories, Inc., said a company’s ability to react in real time depends on its access to point-of-sale data, combined with a Web store that can generate instantaneous customer feedback. But at least one audience member questioned whether the intelligence gleaned from social networks can distinguish customers who actually have the wherewithal to buy a particular product.

Prediction: In the era of rampant sharing over the internet and via various mobile devices, the integrity and longevity of intellectual property is at risk, said Buck. “Idea-sharing has become something of a commodity,” he said, venturing that IP protection no longer will last a decade or more. Companies will find it impossible to shield their secrets against a tidal wave of openness.

Response: Hester disagreed. “There’s an awful of money and power [involved] in keeping [IP] as long as they can,” he said. But Buck said companies will come under increasing pressure to share their IP with emerging economies, which hold the greatest potential for future growth.

Prediction: Companies that innovate and get new products to market faster than the competition will be the winners, said McCracken. After years of talking about it, leaders have finally figured out their optimal supply-chain models for responding to customer demand. “It’s all about time to market now.”

Response: No argument from the panel or audience. (One could, of course, point out that a massive increase in retail SKUs and new-product introductions has been with us for some time now.) Buck said the price of corporate acquisitions is so high these days that companies have no choice but to innovate on the product side.

An audience member said the development might take longer than 2014 to begin happening on a large scale. “We live in a bubble in the Bay Area,” he said. “We don’t really know what’s going on in the rest of the world.” The Bay Area’s unemployment rate, which ranges between 5.2 and 7 percent, is significantly lower than both the national and California state averages. “Everybody else in the country is still in malaise,” he said.

Prediction: Retailers are doing such a good job of tracking consumer behavior that the resulting data will supplant traditional forecasting based on sales as a basis for planning, said Hester. BevMo draws heavily on information both from actual sales and its ClubBev loyalty program. In the event, the big beverage retailer has achieved a 95-percent penetration rate into its customer base. “If [an item] comes in on a Tuesday, I can see what’s going to happen on Saturday,” Hester said. “It’s not based on sales – it’s based on tracking consumer shopping preferences.”

Response: Opinions were mixed. Miller suggested that Hester was overstating the case, at least for retailers as a whole. But Hester insisted that each succeeding month sees merchandisers relying more on consumer intelligence as their primary guide for planning.

Next: More predictions for 2014 and beyond from the San Francisco Roundtable.

Comment on This Article

SCB TRANSLATOR (Over 60 languages)
Sponsored by:


DIGITAL ISSUES