Executive Briefings

Capgemini Looks Backward and Forward at the Hottest Topics in Supply Chain and Procurement

Capgemini saw substantial growth in its supply chain and procurement practices in 2007. According to the consultancy, more than 1,400 projects related to those areas were executed during the year. A number of clear trends emerged from the spate of activity. One was the growing popularity of sales and operations planning (S&OP) projects that utilized so-called One-Number Planning. The term refers to efforts to ensure that a company's finance and supply chain departments are working with the same numbers, for purposes of budgeting, forecasting and production planning. Prompted by the increased outsourcing of manufacturing, businesses are also embracing "control tower" projects, in an attempt to assert end-to-end visibility over extended supply chains. Other areas of heavy activity during 2007 included service-parts logistics, retail supply chain transformations, logistics cost reduction, optimization of direct-materials sourcing, renewed interest in projects that boost revenues as opposed to cutting costs, and global trade management.

Looking ahead to 2008, Capgemini sees a continuation of many of the trends that emerged last year in supply chain and procurement programs. But it also predicts additional changes. Price and revenue optimization will be big, migrating from its origins in the airline and travel sectors to other industries. For example, one large retailer is pricing the same article differently, according to the particular store and its surrounding demographics. Radio frequency identification, which lost favor after several years of hype, is back on the radar screen, "and we are seeing a huge uptake in RFID projects around the world," Capgemini said. "The technology has become mature and companies are seeing positive business cases to implement it." Finally, the topic of sustainability and "green" supply chains will garner increased attention, especially in the U.S. and U.K. What began as "carbon-neutral" initiatives will expand to cover "cradle-to-grave" concepts, "where the idea is to develop supply chains which do not produce waste anymore."

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Capgemini saw substantial growth in its supply chain and procurement practices in 2007. According to the consultancy, more than 1,400 projects related to those areas were executed during the year. A number of clear trends emerged from the spate of activity. One was the growing popularity of sales and operations planning (S&OP) projects that utilized so-called One-Number Planning. The term refers to efforts to ensure that a company's finance and supply chain departments are working with the same numbers, for purposes of budgeting, forecasting and production planning. Prompted by the increased outsourcing of manufacturing, businesses are also embracing "control tower" projects, in an attempt to assert end-to-end visibility over extended supply chains. Other areas of heavy activity during 2007 included service-parts logistics, retail supply chain transformations, logistics cost reduction, optimization of direct-materials sourcing, renewed interest in projects that boost revenues as opposed to cutting costs, and global trade management.

Looking ahead to 2008, Capgemini sees a continuation of many of the trends that emerged last year in supply chain and procurement programs. But it also predicts additional changes. Price and revenue optimization will be big, migrating from its origins in the airline and travel sectors to other industries. For example, one large retailer is pricing the same article differently, according to the particular store and its surrounding demographics. Radio frequency identification, which lost favor after several years of hype, is back on the radar screen, "and we are seeing a huge uptake in RFID projects around the world," Capgemini said. "The technology has become mature and companies are seeing positive business cases to implement it." Finally, the topic of sustainability and "green" supply chains will garner increased attention, especially in the U.S. and U.K. What began as "carbon-neutral" initiatives will expand to cover "cradle-to-grave" concepts, "where the idea is to develop supply chains which do not produce waste anymore."

Visit www.capgemini.com