For another perspective on pending structural changes across global supply chains, I recommend you read Trevor Miles’s posting on the 21st Century Supply Chain blog, titled “Recession or reset?” 

I will pre-warn you that it is a rather lengthy posting, but does bring forward some interesting points to consider regarding the supply chain implications that are already occurring in the post-recession business climate, changes that your organization should be considering.  I should also acknowledge that Trevor’s posting cited some of my recent postings on this blog as reinforcing some pertinent points. Thank you Trevor!

Trevor cites two recent Boston Consulting Group research reports analyzing new global manufacturing and other challenges within the so-called Rapid Developing Countries (RDE’s), which industry analysts often refer to as the BRIC countries (Brazil, Russia, India, China). The report conclusions point to a combination of a growing consumer class, higher momentum in post-recession GDP growth, and more astute understanding of unique consumer needs as a building reality that post-recession growth will probably not be led from North American or European based organizations. Trevor concludes that Western companies have little option to regain revenue growth but to address fulfilling demand in the RDE’s, which in some cases, may be a different forms of products as well as demand management fulfillment processes.

I would add that these trends were also brought home to me when I read a March 2009 Harvard Business Review article titled Value-for-Money Strategies for Recessionary Times.  Authors Peter Wlliamson and Ming Zeng concluded in their article that companies, particularly those in the West, who historically sold premium products to drive profits can no longer rely on this tactic, and must instead focus on more cost-conscious buyers who will desire more value for less money. In his post, Trevor cites the case study of Nirma, a washing powder producer offering products to India based consumers as yet another example of a different fulfillment need.

Global supply chain structural changes are underway in many RDE’s and if your company is going to remain competitive, it must be prepared in product development, business planning and distribution competencies that both reside in these geographic areas and can effectively competes across these economies. Supply chain related skill shortages have already been identified within these specific regions and the time to augment and recruit more skilled professionals is overdue.

Bob Ferrari