Anyone who dares to predict the future must long for the prehistoric days before the invention of the internet. Back then you could make the wildest statements imaginable, and no one breathed a word when you turned out to be wrong. On the other hand, you could claim to have predicted some earthshaking event without fear of contradiction. Who kept copies of those ratty old supermarket tabloids from years back? Now, thanks to the Web, the most offhand comment lives forever in cyberspace.
Which is why I admire the brave individuals who stood up before the San Francisco Roundtable of the Council of Supply Chain Management Professionals a couple of weeks ago and offered their best guesses as to what the future holds. They were following an innovative format that the group debuted last year, in which the views of each speaker are subjected to an "agree" or "disagree" vote by other panelists, then the entire audience. Here, then, are this year's bold predictions, accompanied by appropriate comments from naysayers. Feel free to chime in with your own opinions.
Prediction: "The cloud is here upon us," said Mark Buck, supply chain and procurement leader with Bio-Rad Laboratories, Inc. Within five to seven years, he believes, traditional enterprise resource planning systems will be a thing of the past. Major software applications will be hosted off-site by vendors, while companies will only need to keep some basic internal capability for tracking financials.
Or not: Buck's view garnered near-unanimous agreement from the audience. But attendee David Ginsberg, vice president of supply chain management with Sonic Manufacturing Technologies, cautioned that some companies might have gone too far down the path of outsourcing. "Manufacturing has been reduced to a purchase order," he said. He thinks businesses will start building back certain internal capabilities, in a trend that could slow the stampede to the "cloud."
Prediction: In the next 12 to 18 months, companies that blindly outsourced their manufacturing to Asia will start bringing some of that capability back to the U.S., said Jim Miller, vice president of worldwide operations with Google Inc. This "general backlash against outsourcing" will be driven by a number of factors, including inflation of the Chinese currency, new geopolitical uncertainties, the push for greater sustainability and cleaner technologies, and political pressure from domestic sources.
Or not: "A lot of companies were accustomed to offshoring," said panelist Lisa Bugajski, senior director of supply chain operations with Adobe Systems Inc. "Bringing it back to the States is too costly." Miller agreed that companies will find it tough to unravel the "ecosystem" that was created in the move toward outsourced manufacturing. Audience member Mike Hamilton, senior global account director of Ceva Logistics, said the prospect of higher taxes on business in the U.S. will serve as a barrier to "on-shoring."
Prediction: "We are in the midst of a transition to electronic software delivery," said Bugajski. Adobe's customers no longer want a packaged product taking up space on their shelves.
Ditto: Total agreement from panelists and audiences alike. Said panel moderator Carl Guardino, president and chief executive officer of The Silicon Valley Leadership Group: "I think that's a prediction like the sun's coming up tomorrow."
Prediction: From Greg Stein, vice president of supply chain with Better Place, a provider of systems and services for electric vehicles. He believes that a consortium of Chinese "new energy initiative" companies will soon acquire a top ten global third-party logistics provider. Their goal will be to support rapid growth in China's raw material imports and indigenous automotive industry.
Or not: Disagreement centered on whether Chinese interests would be able to assimilate a marquee foreign player into their distinct culture. Stein replied that they won't even try; they'll keep the 3PL's management team in place and draw on its expertise. But audience member Alan Davis, practice leader with Strategic Solutions Partners, LLC, said the only entity in China that could afford a top global 3PL would be a state-owned enterprise. "They prefer to joint-venture with companies," he said. "I don't think they see the advantage of having a foreign company on China's ground."
Prediction: Hugh Durdan, chief operating officer with eSilicon Corp., a fabless semiconductor company, sees more of a balance between supply and demand in the semiconductor industry next year. Foundries took a lot of equipment offline in response to the global recession, then were caught short when demand bounced back in late 2009 and early 2010. The return of some capacity in 2011 will help to meet that renewed appetite for product, he said.
Or not: Miller agreed that supply and demand will likely approach a state of rough equilibrium in the last half of 2011, but he believes the first half will see a continuing correction. "The [semiconductor] market will actually get softer before it starts to stabilize," he said. Durdan noted that Ireland and other struggling European economies present a nagging short-term problem for chip suppliers. "We're not predicting that the macro-economy is going to grow," he said.
Prediction: Stein sees major progress ahead toward the "greening" of transportation, with large-scale fleet operators making the switch to electric vehicles by 2015. Companies such as UPS, FedEx and Hertz will lead the charge, converting 20 percent of their fleets to electric. Miller chimed in with a related prediction, that the push for green initiatives and sustainability will move from being "an exogenous activity in a supply chain to one integrated into mainstream supply-chain strategy and operations."
Or not: There was little disagreement, although Buck warned against getting too excited about a massive shift by commuters to public transportation. "It's very tough to put Americans into a bus," he said. "Even in China, they're buying cars."
Prediction: Fifteen years from now, the world will realize that China "is not the juggernaut that we make [it] out to be," said Miller. The nation faces a number of systemic problems, including the prospect of "the mother of all real estate bubbles."
Or not: Don't be so sure, said Buck. "China is coming up strong everywhere I see. It's not temporary." But Miller wondered whether the masses of skilled engineers that China is turning out will be true innovators, "or are they just exploiting cheap labor? Can they make that cutover?"
Impossible to say at this point. I do note one area where even the most fearless prognosticator tends to exhibit a blind spot. Guardino cited an interesting fact about the five panelists who favored the San Francisco Roundtable with their visions of the future last fall. By March of this year, all had changed jobs.
You think any of them predicted that?
Comment on This Article
Enjoy curated articles directly to your inbox.