Transformation is Out; Optimization is In

Transformation is Out; Optimization is In

A look at what to expect from the global supply chain in 2010.

Are you tired of hearing people complaining about how lousy things were in 2009? If so, you're not alone. Mark Toon, CEO of consulting firm EquaTerra, believes that for many companies, recession fatigue has set in and talk in 2010 will turn from surviving the downturn to succeeding in the upturn.

One casualty in the new year, Toon predicts, will be "transformation" as a supply chain strategy, as it will be replaced in the buzzword lexicography by "optimization." According to Toon, "Organizations still want to transform' how they deliver back-office services, but they typically want to move in pragmatic, incremental steps and focus on achieving best-in-class, standardized and optimized delivery models."

Based on their interactions with clients as well as recent research, EquaTerra's team of advisers have compiled a list of trends companies can expect to see in 2010, including the following:

Global sourcing. "Contrary to what is widely believed, global sourcing activity will continue to grow in 2010," predicts Stan Lepeak, managing director of global research. The main reason for this growth will be the continuing desire to reduce costs. "While there is greater protectionist sentiment, there is a lack of action in the market, and therefore this is not materially impacting most organizations."

"Organizations still want to 'transform' how they deliver back-office services, but they typically want to move in pragmatic, incremental steps and focus on achieving best-in-class, standardized and optimized delivery models."
-- Mark Toon, CEO, Equa Terra

Social media. Lepeak also believes that in 2010, social media tools will become far more common in business life. "Increased usage is inevitable, so organizations should have user policies in place and focus on maximizing their positive impact," he suggests.

Talent acquisition and retention. According to Bill Thomas, executive director, Europe and Asia Pacific, "While many organizations are seeing wage deflation and stagnation, all organizations are trying to identify, nurture and retain their high-performing talent -- especially as salaries are accelerating rapidly for this group. As a result, we will see a rise in demand for specialized on-demand talent-management solutions in 2010."

Optimization and renegotiation. "While many organizations remain keen to avoid the costs of new capital and migrating to new suppliers, investment is being made in ensuring existing suppliers and internal processes are delivering optimum value," suggests Tom Schramm, managing director of finance and accounting.

China as an offshoring location for Asian countries. Vibhash Ranjan, a Shanghai-based consultant, says, "Where China can demonstrate its language advantage, it will be the destination of choice for organizations in Japan and other Asian countries."

Flexibility. "Organizations are increasingly seeking flexible commercial arrangements to cope with unpredictable levels of demand," says Nico Boot, executive director, IT advisory.

Procurement outsourcing. Rick Bertheaud, managing director of procurement advisory services, predicts: "As the discipline matures, the use of and demand for procurement outsourcing is growing -- and is currently the fastest growing outsourcing segment. A value driver fueling the demand is the inclusion of sourcing activity such as indirect spend management. Organizations that include strategic sourcing of indirect goods and services in their procurement outsourcing scope seek, and are achieving, double-digit savings on managed spend."

See Also

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish