Executive Briefings

The Near-Term Outlook for Supply Chain Management

The supply chain has helped many companies to weather the recession because it enabled them to react better to either capacity shortage or inventory change, says Simon Ellis, practice director, global supply chain strategies, at IDC Manufacturing Insights. That was largely due to the use of information technology. While cost is always king, investment in the right IT is going to continue.

The sales and operations planning process is getting a lot of attention, and increased investment is likely. "We're seeing a lot of interest in it," Ellis says. "It's been a part of the lexicon for decades, but it's emerging again because companies need to get control of the totality of their supply chains."

In fact, S&OP, inventory optimization, and forecasting and demand improvements are the top three applications on companies' wish lists, according to surveys since late last year, Ellis says. And of those, S&OP is the most interesting. "That's because companies have begun to realize they haven't been as effective as they would have been had they had S&OP."

Having said that, while companies are considering new investment, it's "optimistic" to say things are likely to return to pre-recession levels soon.

There has been a redress of sorts in the imbalance between transportation demand and capacity, but the situation remains highly fluid and volatile. It's always advisable to lock one's carriers into contracts. Nevertheless, it's difficult to say now if consumer caution will ensure another disappointing holiday sales season.

Sustainability is the biggest buzzword of the day, but driving out waste is entirely consistent with cost-cutting goals, Ellis says. But because cost reduction continues to be so important, any carrier that can guarantee sustainability at low rates is likely to win the contract.

To view this video interview in its entirety, click here.

The sales and operations planning process is getting a lot of attention, and increased investment is likely. "We're seeing a lot of interest in it," Ellis says. "It's been a part of the lexicon for decades, but it's emerging again because companies need to get control of the totality of their supply chains."

In fact, S&OP, inventory optimization, and forecasting and demand improvements are the top three applications on companies' wish lists, according to surveys since late last year, Ellis says. And of those, S&OP is the most interesting. "That's because companies have begun to realize they haven't been as effective as they would have been had they had S&OP."

Having said that, while companies are considering new investment, it's "optimistic" to say things are likely to return to pre-recession levels soon.

There has been a redress of sorts in the imbalance between transportation demand and capacity, but the situation remains highly fluid and volatile. It's always advisable to lock one's carriers into contracts. Nevertheless, it's difficult to say now if consumer caution will ensure another disappointing holiday sales season.

Sustainability is the biggest buzzword of the day, but driving out waste is entirely consistent with cost-cutting goals, Ellis says. But because cost reduction continues to be so important, any carrier that can guarantee sustainability at low rates is likely to win the contract.

To view this video interview in its entirety, click here.