The SCM Perspective: 2009 in Review-and What You Can Do to Weather the Storms of 2010

In spite of the 2009 recession, some SCM vendors were able to create traction in the supply chain space this year. From an industry landscape perspective, three events from 2009 will have a more far-reaching impact than any other in this space, primarily because they’re priming the conditions for still more vendor competition and industry volatility in the year to come.

News item: Oracle announced its launch of Fusion Applications, its mishmash of E-Business Suite/PeopleSoft/JDE/Siebel applications)
So what?  As though Oracle’s strengths were not already apparent, Oracle has created an application that can potentially combine the best features and functions from its current product offerings.

News item: JDA and i2 Technologies decided to get back together after a year of shilly-shallying.
So what? With the combination of two leading supply chain products, many vertical industries will benefit from one source of supply chain expertise (with the exception of warehouse management, which is a key piece of the puzzle that JDA seems to be missing).

News item: SAP reevaluated its go-to market strategy for the SAP Business ByDesign SaaS business model.
So what? SAP is taking this market very seriously—which not only means that the giant will continue to  chase after it aggressively, but also spells the beginning of the end for software as a commodity, as the market is increasingly treating it as a true service.

Even though many analysts have predicted that economy will recover next year, I am not holding my breath. Current market conditions are still so volatile that organizations are facing crisis conditions in every aspect (technology changes, regulations, price/demand fluctuations, etc), meaning that they need to adapt to change quickly and effectively.

What You Can Do to Weather the 2010 Storms

Not everyone has the resources of SAP, Oracle, or JDA to handle change. Here’s what you need to do if you’re not one of the giants:

  1. Focus on creating a flexible supply chain that can handle uncertainty and volatility with respect to demand/price changes.

  2. Develop operational strategies focused on product branding and customers to provide customer centric models.

  3. Create a model of collaboration with partners that will provide end-to-end visibility into the extended supply chain.

Fine, but how? You will need to reevaluate how you are using your technologies. Many organizations can adapt to change by

  • using tools such as sales and operations planning (S&OP), linked to advance planning and scheduling (APS) to create a complete view of demand and to determine how pricing needs to be adjusted

  • integrating manufacturing, product development, and supply chain applications

  • using e-commerce or SaaS models to create an extended supply chain network that allows partners to communicate and collaborate effectively

As Charles Darwin says: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."

Organizations will only survive in the years ahead if they focus on adaptability to change, whether through best use of technology, or via mergers and acquisitions, rethinking of product strategies, or product delivery platform redesign.
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