Since our inception as both a supply chain management industry analyst research firm and a Supply Chain Matters global-wide blog presence, we have produced and made available our annual predictions for industry and global supply chains.

The purpose of these predictions is to advise our clients and global-wide supply chain management teams as to what to anticipate in the coming year as well as areas to focus on in strategy and tactical direction, business process improvements and technology investments. These predictions and their implications become the basis of our continued research and consulting agenda in the coming year.  Feedback we have received indicates that this report often serves as a reference for many of our clients and readers.

This year’s feature a new format in what we are designating the year 2021 as a Year of Renewal. Our individual predictions are formatted in the context of our prediction of New Thinking, New Definitions and New Directions for each area.

Over the coming days, we will be highlighting select portions of our ten specific 2021 predictions for blog readers.

Prior published bogs detailing our individual 2021 predictions have included:

2021 Prediction One-The Need for Enhanced End-to-End Supply Chain Visibility.

2021 Prediction Two-Discernable Acceleration of Supply Chain Digital Transformation Initiatives but in the Context of Business-Driven Objectives

2021 Prediction Four: Omni-Channel Focused Processes and Customer Fulfillment Capabilities Now Essential to Business Growth

 

2021 Prediction Six: Fostering of Connected Manufacturing and Supply Chain Operational Synchronization Among Product Demand and Supply Networks Remains an Important Priority.

2021 Predictions

Prediction Summary

Today’s highly complex global supply chains are a product of increasing individual customer requirements, an overall global sourcing strategy that heavily weighted lowest cost producer, and a lack of realization that overall synchronization of supply chain operational processes requires new thinking. Prior to the 2020 COVID-19 disruption, many businesses were under pressure to significantly increase efficiencies, reduce overall costs, but at the same time be able to support the dramatic shifting of markets and just-in-time focused customer fulfillment needs. As previously noted, the pandemic laid bare the cracks and fissures of manufacturing and supply customer fulfillment processes.

Businesses face a reality of extended product demand and supply networks that require more agility and synchronization of activities. Owned factories and customer fulfillment centers generally remain as black boxes that have isolated islands of information or multiple systems of transactional record. Rather than solving such challenges by adding more safety stock or re-organizing the supply base, there is a need for New Thinking, New Definitions and ultimately New Directions.

New Thinking

New Thinking is about adopting an outside-In perspective where end customer needs drive manufacturing, direct materials procurement and end-to-end inventory management and replenishment requirements. Rather than fighting multiple localized fires each day or optimizing one network fulfillment mode at the expense of inefficiency or added bottlenecks in another, new thinking is an overarching customer demand pull process perspective.

It requires the capture and data convergence of siloed information occurring among existing software and operational application systems in the context of outside-in demand pull data convergence. Rather than a rip or replace of existing application systems approach, or a single execution system customization approach, it will be a rethinking of data convergence than can be enabled by today’s more advanced Cloud based technology in this area.

An understanding that the keys to global supply chain synchronization and added agility are connected factories and supply chain execution, transportation and customer fulfillment entities. This implies streaming Cloud based data streams and low-code API’s that capture and exchange data among various other Cloud systems as opposed to singular behind the firewall resident applications having data and information siloed for a particular process.

Supplementing material and inventory planning requirements by establishing a Plan for Every Part (PFEP) methodology achieves a more holistic view of inventory optimization.

The rethinking of Just-In-Time to just enough inventory to meet existing customer orders, but at the same time, to a more weighted context to now more important risk factors, including required customer service levels, existing supplier or transportation lead times, supplier performance and known risks of potential disruption. Rethinking Just-In-Time is in the context of an electronically controlled and risk balanced Kanban system.

Building the foundation for truly connected factories that are outside-in, customer demand driven, as well as virtually connected to customer fulfillment and inventory replenishment processes.

Harnessing the potential of Manufacturing 4.0 and IoT in operational data at the Edge for early warning of quality lapses or more insightful analytics.

New Definitions

This area involves a context for driving needs for added efficiencies beyond a single production facility, to include multiple production and supplier facilities. It involves the goal of linking interconnected manufacturing and supply chain material and information flows under common decision-making context of quality, cost and delivery (QCD) factors.

An awareness that that in supply chain execution and customer fulfillment processes, data is siloed among ERP based production scheduling, various WMS and TMS applications, and even other operational management and scheduling systems that control the priority of movement of materials. For manufacturing and supply chain execution, interconnected systems, data and more synchronized decision-making implies an overall data convergence strategy.

New Directions

New Directions are in building the foundation for more predictive (likelihood of what is to occur) and prescriptive (actions that need to take place to ensure needed outcomes) decision making capabilities related to supply chain material and inventory replenishment flows. It is an awareness that added customization or additional integration of data and information of any single supply execution system defeats the objective of synchronizing and optimizing end-to-end flows of inventory and product fulfillment needs.

Rather than adding additional safety stock or re-organizing the supplier network, an outside-in perspective has a context of individual or collective customer needs in on-time and service level performance as the over-arching determinant.

Leveraging appropriate predictive or prescriptive analytics as well as artificial intelligence enabled technologies to assist teams determine and enable the best QCD outcomes. The goal is achieving smoother workload management, requiring less labor and unforeseen disruptions that can aid with agility and efficiency.

Providing end-to-end graphical, visual or Digital Twin enabled views of manufacturing and supply chain execution to assist appropriate teams to initiate exception-based control, prioritization, and collaboration on the most optimal or highest priority inventory flows when disruptions do occur, which they will.

 

 

Obtaining a Copy

Our Ferrari Consulting and Research Group Advisory Report– 2021 Predictions for Industry and Global Supply Chains is now available for complimentary downloading with our Research Center. Readers can obtain a complete copy by providing some basic registration information.

Stay tuned to Supply Chain Matters by bookmarking this site.

 

Bob Ferrari

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