Supply Chain in 2013

Everyone waits, as we go to press, to see how domestic political forces will impact the U.S. business climate right from the 2013 get-go. If ever “waiting with bated breath” was a relevant turn of phrase, it is probably now.

While both the near-term U.S. fiscal policies and the ongoing debt crisis in Europe will strongly influence the outlook for 2013, the further removed we are from the depths of the 2008 recession, the more companies want, and need, to shift from defensive to more offensive market-focused supply chain strategies.

We at TEC expect to see, as a result, a significant increase in software evaluations in 2013. Notwithstanding the strong influences at play, recent business indicators and increasing customer requirements will create an increasing sense of urgency among a growing number of companies to evaluate new technologies to create new capabilities.

In supply chain management (SCM), to single out a few particular areas of innovation and focus, we foresee particular vigor in the areas of visibility, analytics, cloud, and sales and operations planning (S&OP). Sustainability initiatives will be a focus for select areas of the supply chain, but await a more sustained positive business climate for other business sectors. Radio frequency identification (RFID) is expected to see considerable pickup by the retail sector in 2013. Regulatory compliance will be of increasing importance to specific supply chain sectors. Global trade management (GTM) will get more focus by select industry sectors as global supply chains continue to get more complex.

Visibility will be a new—or renewed—focus for many companies this year. Having a better view into an enterprise’s operations makes sense for every company. Having seen all achievable return from defensive, cost-cutting strategies, more companies will now turn their attention to the power of better visibility of the strategic levers within their enterprises.

We expect to see in 2013 an accelerating uptake of the use of analytics in supply chain contexts, with vendors focusing on increasing their capabilities, and companies looking even more closely at analytical capabilities in their supply chain software evaluations.

Analytics has taken on increasing importance, with or without big data, in the supply chain space. Companies are finding more ways, on both the demand and supply sides, to use analytics (and, increasingly, predictive analytics) to drive better internal efficiency as well as customized and enhanced customer response.

The penetration of cloud technologies into the supply chain arena has been ongoing. We foresee 2013 as something of a watershed year here, with cloud and software as a service (SaaS) becoming an ever greater differentiating capability for some specific SCM segments. SaaS will also become an even more heavily weighted evaluation criteria for more companies in 2013.

S&OP will get much greater focus by more companies in 2013. As companies, tired from (or fearful of more) cost-cutting, look more closely at market-responsive strategies, they will look anew at some sort of S&OP process.

As S&OP tools have continually improved—and now with even more analytics to juice the process—it becomes more manageable to coalesce and manage the disparate data from demand, supply, and financial operations, in order to better align their supply and demand plans.

There is much to watch in the supply chain arena in 2013.  Let us know what is on your supply chain agenda for 2013. We would love to hear.
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