Supply chain “differentiation” is key to success in 2012

IDC Manufacturing Insights’ Supply Chain Top 10 predictions 2012 reconfirms emphasis on “branding, noted Simon Ellis, who currently leads the supply chain strategies practice.

“The Role of Supply Chains in the Intelligent Economy,” was the working premise for the research, he said, but other details emerged in a subsequent webcast staged by the consultancy last month.

“Our first prediction is that manufacturers will focus on clock-speed alignment across the supply and demand sides of their supply chains,” he said. “This means that demand volatility and supply instability will combine to drive increasing cadence mismatches for manufacturers.”

For brand-oriented value chains, said Ellis, the rapidly accelerating demand cycle is the “pace maker” for the supply chain – driving manufacturers to synchronize through better inventory management and demand sign utilization.

The “pace maker” for technology-oriented value chains is of another order, said Ellis:

“In this case there is a need for accelerated time-time-to-volume processes, driving manufacturers to look for faster planning and supply side responsiveness capabilities,” he said.

Finally, for asset-oriented value chains, the need for consistent return-on-investments is the “pace-maker” for the supply chain – driving manufacturers to look for more effective ways to manage feedstock pricing and asset utilization.

Ellis, who collaborated with IDC analyst Kimberly Knicle on the study, told SCMR that there were not “startling” conclusions drawn from their findings.

“We’ve been in this business too long for that,” the former Unilever executive said. “But we saw that that there is a continuing emphasis on supply chain branding that is valued by companies seeking to differentiate their supply chains.”

Apple Inc., for example, insists that all of its products be labeled “designed in the U.S.,” said Ellis, rather than noting where items were manufactured and/or sourced.

“This means the company wants consumers to know that they are buying a fashion item rather than a technological tool. It also reflects the complexity of its supply chain.”

Procter & Gamble, on the other hand, remains focused on speed-to-market, and is telling consumers that its supply chain efficiency makes their products less expensive, said Ellis.

“But in the end, communication is key,” he said. The role of social networking and other media relationships is growing in importance when it comes to relating supply chain advantages.”

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