Future of supply chain: 5 predictions updated

Almost exactly one year ago I wrote a blog with five predictions for the next five years. A fifth of my window is now closed, so I thought it was time to check up on how I’ve done so far.

Prediction #1 – Amazon stumbles

Not a great start for my aspirations to replace Nostradamus. In the past 12 months Amazon has continued to rip it up in every way possible. The ongoing build-out of fulfilment capabilities (see our Apple & Amazon report) is working just fine. Same-day delivery has become nearly mandatory to modern omnichannel retailing, and Amazon’s footprint, scale and expertise give it an edge.

The mysterious retail empire has also moved faster and deeper into pure content than I expected, including high-end original programming for television and further penetration into publishing. Throw in mini-helicopter drones unveiled on CBS’s heavily watched 60 Minutes evening news show and I am hard pressed to give myself any points on this one.

Grade: D

Prediction #2 – Africa becomes your most important growth market

So far, so good. A brand new report from Geopolitical Monitor offers a very bullish outlook for Africa in 2014, saying its emerging middle class numbers 150 million with projections as high as 300 million by 2015. The report points to World Bank growth forecasts for sub-Saharan Africa’s GDP of 5.3% this year and 5.5% next year. “Economic development will be supported by strengthening domestic demand and increasing production in the mining, agriculture, and service sectors,” the report says.

SCM World community intentions indicate plenty of focus on consumer products and healthcare, which will benefit from value engineering costs down to realistic consumer price points.

Grade: B+

Prediction #3 – The carbon tax happens

Political signs don’t look especially promising, particularly in the dysfunctional United States Congress, but everything else says we’re on track. Most important is the fact that companies are openly and explicitly including carbon taxes in long-term strategic plans. As the New York Timesreported last month, “more than two dozen of the nation’s biggest corporations, including the five major oil companies, are planning their future growth on the expectation that the government will force them to pay a price for carbon pollution as a way to control global warming”.

SCM World community members called out in the article for their forward thinking on the topic include ExxonMobil, Chevron, Disney, BP and Microsoft. Consider also the Arctic vortex thing in North America and melting tennis players in Melbourne and the pressure for action is clearly mounting.

Grade: B

Prediction #4 – Robotics explodes

Our manufacturing report last April drilled into this and found plenty of truth. Survey data shows a 30:1 ratio of respondents saying they plan to increase spending here, with 14% saying they expect to increase it “significantly”.

Huge investments being made by Foxconn to outfit plants in China with advanced robotics confirm our data, which shows that automation is rising faster in low-cost countries like China, Mexico and Brazil than in the US. On top of all that, Google is throwing in some big dollars, right behind Apple, which has reportedly spent as much as $10 billion. We may have the makings of a true hockey stick growth curve.

Grade: A-

Prediction #5 – CSCO becomes CEO

The argument a year ago was that the balancing act typical of sales & operations planning is the perfect training ground for general business leadership. In the past year, at least two really prominent CEO slots have been filled directly from the supply chain track. Mary Barra took the reins at General Motors in December after a long career with the Detroit icon that started in a plant and culminated as global head of product development, purchasing and supply chain.

And back in May, Brian Krzanich took over as CEO of Intel having previously headed up worldwide manufacturing and supply chain. Both of these appointments broke new ground by elevating operations expertise ahead of traditional corner office pedigrees in finance, sales or engineering. More like these should be expected. Then again, if I was so smart I’d have more to point to now.

Grade: A-

I hope to see you in Miami next month when our entire SCM World Live conference focuses on future of supply chain and over 200 leaders from around the world will come together to share forecasts, challenges and lessons learned. This event is a unique opportunity to learn from your peers, test your ideas and see over the horizon to the threats and opportunities that lie ahead.

Kevin O’Marah
Chief Content Officer
SCM World