4 Supply Chain Changes Taking Place in 2016

Dustin Caudell
Tue, May 17, 2016
Chief supply chain officers now serve as major influencers over all operations.
Chief supply chain officers now serve as major influencers over all operations.

New ideas for communication platforms and business best practices pop up every day. Innovation is one of the leading factors supply chain logistics management must take into account if companies want to remain relevant in a world eager for new ways of doing business. Here are four changes facing the supply chain industry and how organizations can respond:

1. Smarter Decision Making
Whereas previous generations may have viewed the supply chain as a necessary but minor part of an overall business, Forbes shared SCM World survey results that showed chief supply chain officers now serve as major influencers over all operations. On average, CSCOs make decisions about half of a company's annual spending and two-thirds of the organization's workforce.

Acquiring, storing and shipping products to audiences becomes increasingly important as supply chains extend around the world and consumer expectations involve speed and personalization. This means leaders need direct insight into growing operations. Participants in the survey predicted foundational knowledge of core supply chain functions will be the primary skill businesses look for when hiring CSCOs in the near future.

As the supply chain becomes more important, leaders need greater attention to detail. This is why many companies introduce mobile data collection devices into every section of the supply chain to create full visibility. It is important to know what happens on a day-to-day basis and an integrated information system shows how supply chain activities affect the company as a whole.

2. Leaner Assets
Investments in smarter technology calls for decreased spending in other areas. Many businesses respond to changing markets by doing away with traditional supply chain assets. The Wall Street Journal reported major U.S. trucking companies plan to decrease the number of vehicles in their fleets and freeze purchase of new trucks in 2016.

By selling off assets and getting the most use out of existing equipment, companies can reduce costs and improve return on investments. Businesses may also want to look for alternatives. Many smart pieces of supply chain equipment can serve more than one function and replace two or three assets.

It's also possible to take advantage of new opportunities. Instead of shipping products cross-country via trucks, another article from The Wall Street Journal suggested companies may turn to foreign suppliers thanks to new trade exemptions.

3. Diverse Supply Chains
Companies shouldn't just investigate the use of foreign supply chain partners. There are domestic businesses that offer the location or knowledge necessary to secure and hasten a phase in procurement and distribution.

Federal News Radio said even traditional organizations like the U.S. Post Office plan to create more diverse supply chains with help from smaller businesses. Working with a variety of partners is beneficial thanks to the local expertise and specialization provided by each company. This calls for effective communication and logistics visibility to ensure each organization works in sync.

Another benefit of working with small or startup businesses is investment in minority- and woman-owned companies. This helps promotes local economies and can service as positive public relations when handled well.

4. Changing Leadership
Diversity in the supply chain is also present at the very top in modern businesses. Companies may need to move beyond their traditional image of warehouse management and distribution leaders to recognize individuals with the skills necessary to respond to modern challenges.

This means organizations hire more women and younger candidates for supply chain management positions. The Des Plaines Daily Herald reported organizations like Achieving Women's Excellence in Supply Chain Operations, Management and Education encourage diverse company leadership and reward brands that provide opportunities for qualified women. Good PR is just one of many reasons more supply chains move beyond tradition and seek out valuable people that may have been ignored in the past.

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