After years of stagnant activity, mergers and acquisitions surged in 2014, with the announcement of more than 7,500 deals with a combined value exceeding $3.5tr. That's an increase of more than 7 percent by number and more than 25 percent by value compared with 2013. While that volume hasn't yet reached the high of nearly 10,000 deals set in 2007, a new wave of activity is clearly under way.
To hear some tell it, the world will soon be abuzz with small drones that inspect bridges, monitor pipelines, survey crops and help assess damage for insurance claims.
Analyst Insight: Alignment is the positioning of parts so they are in their proper position to run correctly – as in car parts. Alignment is also the ability to optimize the business results by aligning people, programs and business processes. According to Supply Chain Insights, Alignment continues to be one of the top three supply chain business initiatives in 2015. – Mickey North Rizza, VP Strategic Services, BravoSolution
Analyst Insight: A major reason the majority of start-ups and mergers are destined to fail is that companies are not aligned when it comes to determining the nature of their business, what they want to achieve and how they will achieve it. Misalignment can happen both internally and externally and almost always translates into frustration and failure. – Kate Vitasek, Faculty, University of Tennessee's Center for Graduate Executive Education programs.
Analyst Insight: Optimization. It sounds simple enough, but when was the last time you thoroughly reviewed your supply chain, and more specifically, the transportation network and associated cost structure for complete optimization? Optimization has many spokes, yet the goal is to improve service and reduce costs. For many companies this awareness is event-driven, occurring only when something negatively impacts the supply chain such as congestion at ports or anywhere along the transportation network, supplier issues, or an imbalance in inventory. – John Haber, President & CEO, Spend Management Experts
Analyst Insight: Companies spent over $400bn on external management consultants in 2013 with a majority on strategy development and implementation. This figure shows companies struggle to develop and retain strategy as a skill in the talent toolbox. As a pioneer of process engineering and continuous improvement, supply chain has already proven to be an organization that can break complex problems down into simple, repeatable steps. It's now our turn to do the same with strategy. – Matt Davis, SVP Research at SCM World
Manufacturers typically evaluate seven critical areas when it comes to operational decision making: transportation and energy costs; market demand for their products; rising labor costs in China and other developing nations; access to talent, tax and regulatory policies; availability of capital; and currency trends.
For the last 50 years, the world economy has benefited from a demographic boom that has contributed 1.8 percent to average annual global GDP increases, helping to generate an unprecedented level of growth. This demographic headwind is coming to an end.
Ever since Chinese companies began going global in force a couple of decades ago, their impact on worldwide business has been hard to overstate. By combining low cost with massive scale, and by taking full advantage of a huge domestic market, companies based in China have disrupted and transformed industries from telecommunications equipment to solar panels. Will that leadership continue?