Login



For PLUS+ subscription assistance, contact customer service.

Not a PLUS+ Subscriber?

Become a PLUS+ Subscriber today and you'll get access to all Supply Chain Management Review premium content including:

  • Full Web Access
  • 7 Magazine Issues per Year
  • Companion Digital Editions
  • Digital Edition Archives
  • Bonus Email Newsletters

Subscribe Today!

Premium access to exclusive online content, companion digital editions, magazine issues and email newsletters.

Subscribe Now.


Become a PLUS+ subscriber and you'll get access to all Supply Chain Management Review premium content including:

  • Full Web Access. All feature articles, bonus reports and industry research through scmr.com.

  • 7 Magazine Issues per year of Supply Chain Management Review magazine.

  • Companion Digital Editions. Searchable replicas of each magazine issue. Read them in any web browser. Delivered by email faster than printed issues.

  • Digital Editions Archives. Every article, every chart and every table as it appeared in the magazine for all archive issues back to 2009.

  • Bonus email newsletters. Add convenient weekly and monthly email newsletters to your subscription to keep your finger on the pulse of the industry.

PLUS+ subscriptions start as low as $109/year*. Begin yours now.
That's less than $0.36 per day for access to information that you can use year-round to better manage your entire global supply chain.

For assistance with your PLUS+ subscription, contact customer service.

* Prices higher for subscriptions outside the USA.

You have been logged out of PLUS+


For PLUS+ subscription assistance, contact customer service.

Need to access our premium PLUS+ Content?
Upgrade your subscription now.


Our records show that you are currently receiving a free subscription to Supply Chain Management Review magazine, or your subscription has expired. To access our premium content, you need to upgrade your subscription to our PLUS+ status.

To upgrade your subscription account, please contact customer service at:

Email: [email protected] Phone: 1-800-598-6067 (1-508-663-1500 x294 outside USA)

Become a PLUS+ subscriber and you'll get access to all Supply Chain Management Review premium content including:

  • Full Web Access. All feature articles, bonus reports and industry research through scmr.com.

  • 7 Magazine Issues per year of Supply Chain Management Review magazine.

  • Companion Digital Editions. Searchable replicas of each magazine issue. Read them in any web browser. Delivered by email faster than printed issues.

  • Digital Editions Archives. Every article, every chart and every table as it appeared in the magazine for all archive issues back to 2010.

  • Bonus email newsletters. Add convenient weekly and monthly email newsletters to your subscription to keep your finger on the pulse of the industry.

PLUS+ subscriptions start as low as $129/year*. Start yours now.
That's less than $0.36 per day for access to information that you can use year-round to better manage your entire global supply chain.

This content is available for PLUS+ subscribers.


Already a PLUS+ subscriber?


To begin or upgrade your subscription, Become a PLUS+ subscriber now.

For assistance with your PLUS+ subscription, contact customer service.

Sorry, but your login to PLUS+ has failed.


Please recheck your login information and resubmit below.



For PLUS+ subscription assistance, contact customer service.

Manufacturing and Retail Supply Chains in Flux

Wholesale, rapid changes in both of these sectors are requiring supply chain managers to respond with speed and smart decision-making.

By ·
By ·

When Gartner’s 2013 Supply Chain Top 25 came out last May, it signaled a shift in “demand-driven leadership” with a handful of new multinationals moving up in the rankings. Further evidence that significant changes are taking place in our industry surfaced with two new reports demonstrating disruption in global linkage in the manufacturing and retail sectors.

The first comes from IDC Manufacturing Insights, which recently released “Business Strategy: The Journey Toward the People-Intensive Factory of the Future.” This report notes that for the last 15 years, the manufacturing industry was essentially neglected with respect to other industries and was not considered a good industry for local investors and investors from the world’s most advanced economies. However, the situation is rapidly changing, maintain analysts.

IDC says that governments worldwide now better understand that an economy based on service alone cannot survive in the long run.  Manufacturers themselves are going back to basics and putting a renewed premium on production knowledge driven by the need to protect and enhance their technology. They realize now that the direct involvement in production operations fosters innovation and improves customer service.

All of these factors have combined with the rise in transportation costs as a consequence of oil price developments and the need to produce closer to clients for better flexibility and service. The net result: in several developed countries, including the U.S. and U.K., some manufacturers are favoring insourcing initiatives.

“The manufacturing industry is back onstage in developed countries worldwide. Governments, media, manufacturers themselves, and their people are all changing their mindset with a stronger focus on production,” says Pierfrancesco Manenti, Head of IDC Manufacturing Insights, EMEA, and Practice Director, Operations Technology Strategies.

Avoiding Future Shock

This trend is confirmed by IDC survey results, where more than 43 percent of global manufacturers declared they have a formal process in place to look at how factories and plants will be organized in the near term. This highlights how manufacturers are starting to design their factory of the future now to get ready for a massive change that will last for the next generation.

It’s important to note that for more than 56 percent of respondents, the factory of the future will be measured according to its production capability and flexibility, not merely efficiency and production capacity. Furthermore, the survey indicates that over the next five years about 10 percent of Western enterprises will give up to make-to-stock (MTS) heading toward make-to-individual (MTI).

Another key takeaway, say IDC analysts, is that in five years, 47 percent of manufacturers will produce modular platforms centrally while using local small factories, suppliers, and distributors to tailor final products for local demand. This means that manufacturers will have to build a “global plant floor,” harmonizing, supervising, and coordinating execution activities across the company’s and suppliers’ network of manufacturing operations.

Despite growing plant automation, people—and the flexibility and decision-making capabilities they provide—will be at the center of the factory of the future. Finding skilled workers will prove to be a key issue in the industry, analysts conclude. They point to the fact that 64 percent of respondents expect their production processes to be largely or completely digitized in the next five years.

Finally, more than one fourth of manufacturers will invest over 25 percent of their total ICT (information and communications technology) budget for plant-floor IT.

“We are about to witness a new generation of manufacturing enterprises where operational processes on the plant floor—at the very heart of the enterprise—are considered the centerpiece of this transformation,” Manenti concludes.

Retail Shake Up

And while the global manufacturing industry is passing through probably one of the most complex market contexts ever, a similar supply chain story is unfolding in the retail sector.

According to Jones Lang LaSalle, omni-channel selling and consumer demands are raising the bar, as retailers must compete on service to stay in the game. Demands, such as same-day delivery or ship-from-store, require retailers to adapt their supply chain network and store formats sooner rather than later. This transformation means that in five years, the retail supply chain may be unrecognizable from the infrastructure that exists today.

“Brick-and-mortar stores are becoming more than just a point of sale—they’re an essential component of the supply chain as pick-up /drop-off locations for e-commerce orders,” said Kris Bjorson, International Director and leader of Jones Lang LaSalle’s Retail/e-commerce Distribution group. “This additional role offers the retail store another sales opportunity to entice customers to add to their order, or to try new products.”
Analysts have identified five key retail supply chain movers:

1. Omni-channel” distribution strategy has become a reality for retailers, and it means seamlessly serving customers via all available channels such as web, mobile, in-store, catalogue and so on, typically fulfilling same-day and next-day delivery promises. These individual shipments to customers are vastly different from replenishing the weekly inventory in a store on a weekly basis. In short, online and mobile delivery has turned every customer into a point of sale, and every distribution center into an individual customer service location.

2. Leveling the playing field between brick-and-mortar stores and internet-based retailers is the goal of the Marketplace Fairness Act, the proposed federal legislation that expands the collection of sales tax by online retailers and is overwhelmingly popular in the Senate. Even though it means new taxes for online retailers, it actually focuses on tax collection, not the new taxes themselves. While the industry knows the changes that result from the final legislation will be profound, the jury is out on how the specific implications will play out—and who the winners and losers will be.

3. 3D printing is beginning to have a real impact on manufacturing, the supply chain, retail, and ecommerce. The breadth of creative possibilities are staggering, as new products become cheaper to bring to market, me-tail-driven consumers get to design more of their own uber-customized products. At the same time, some brick-and-mortar stores now offer walk-in customers tools to create precisely the product they want.

4. The convenience of digital devices and advancement of internet speeds enable books, music, computer games and other entertainment to be download-only purchases. This transforms the retail supply chain in a unique way.

5. The rise in pop-up temporary stores where large brand retailers may showcase a new product or a guest designer to create buzz and drive sales. We see former retail space being used by schools, churches, clinics, fitness centers, and dental offices. As the sector changes, retailers and retail landlords must be creative.

“Never has change come so fast, and so furious, in the history of retail,” says Greg Maloney, Americas CEO and President of Jones Lang LaSalle Retail.  “The good news is that both retailers and their supply chain partners are responding, evolving to rise to the challenges and opportunities posed by the omni-channel paradigm, the advent of 3D manufacturing, changes to tax law, and being creative with remaining retail space.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Supply Chain Management Review Magazine!

Subscribe today. Don't Miss Out!
Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!

Latest Whitepaper
FREE White Paper: Dive into the Minds of 1,500 Industrial Buyers
The advent of the Industry 4.0 brought with it the next phase in the digitization of the manufacturing sector.
Download Today!
From the May-June 2017
Too often, working capital pressures roll over supplier relationships without regard for what happens to supply chain risk. But now that new supply chain financing tools and techniques are proliferating, companies have a fresh chance to implement a coherent business strategy that balances the legitimate concerns of the buyer’s finance department with those of the company’s supply chain management experts.
How they did it: Supplier Trust at General Motors
Supply Chain Negotiations: Creating Leverage
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!


Latest Webcast
Supplier Performance Management
You've negotiated a contract with your supplier, signed the deal, and then what? In this webinar, procurement expert Mark Trowbridge will explore 10 places where additional value can be found in a company's highest-value provider relationships throughout the supply chain - AFTER the contract has been signed.
Register Today!
EDITORS' PICKS
Fitch Ratings Issues Cautionary Study on Ocean Cargo Supply Chains and Ports
According to a new report, traffic growth in the ports sector is likely to remain well below...
New Study Says Global Ocean Cargo Industry at the “Tipping Point” of Digitization
Study Finds Huge Opportunities to Improve Performance and Customer Service Through Better Use of...

APICS Addresses SCM Talent Gap With Expanded Supply Chain Stem Program
K-12 program teaches supply chain concepts with interactive games, provides resources for teachers...
Global 3PL Market Report Includes Estimates for 190 Countries in 2017
2016 was a “mediocre year” for third-party logistics in the U.S., said Armstrong, with net...