French President Emmanuel Macron's call during his recent visit to the US to counter climate change generated new hope in the Paris accord on environment, and is an example for other world leaders to follow.
Also, French Minister for Higher Education, Research and Innovations, Frederique Vidal, emphasized that there is an urgency to counter climate change. It adds that the joint initiative by France and Germany offers the international scientific community to increase its efforts in battling climate change. The US-based scientists are part of a larger group of 14, and come from a variety of universities like Yale, MIT and Florida State, among others.
Supply chain managers have a responsibility to make choices in manufacturing and logistics that minimize carbon footprint and support green initiatives. A persistent policy of Reduce, Reuse and Recycle across at home, work and leisure can have a huge positive impact.
Author: Aftab A. Khan, Executive Director, BRASI
Trends in Supply Chain Management
SERVICE CHAINS WILL BECOME MORE IMPORTANT THAN PRODUCT CHAINS
- Service as a product: Bank loan, health insurance
- Product as a service: Rentals, Uber, SAAS
- Growth of service sector:
- Traditional services: Financial, Hospitality, Retails, Health, Information Technology and Education.
- Products today have a higher service component than in previous decades. In the management literature this is referred to as the servitization of products or a product-service system
- Virtually every product today has a service component to it.
- The old dichotomy between product and service has been replaced by a service-product continuum.
- Many products are being transformed into services.
- Seller’s Benefit: On-going revenue stream
- Buyer’s Benefit: No capital expense, improved cash flow
- SCM: Focus on service element of products
COMPANIES WILL NEED TO FULLY REPORT CORPORATE EXTERNALITIES
Corporate externalities—the impacts of an organization’s manufacturing and business processes on other segments of society—and the need to disclose those externalities.
- Supply chain sustainability and the carbon footprint
- Disclosing the end-to-end impacts of their supply chains.
- Measuring and reporting on the effect of major supply chain transactions on jobs created, carbon footprint reduction, sustainable procurement processes, types of labor used, and modes of transportation among others.
- Third world manufacturing – labor practices
- Air transport – carbon emissions declaration
- The customer or consumer will begin to demand the transparency into these impacts much as these have now on the labeling of food and beverage products.
- SCM: Risks due to third party operations, critical materials sourcing, affiliates businesses’ labor practices
SUPPLY CHAINS MUST BE DESIGNED TO SERVE THE “BASE OF THE PYRAMID”
- What is the Base of the Pyramid? Based products at low cost – serving large number of customers
- The phenomenal growth of ‘base’ suppliers – Dollars Stores, Walmart, Dicount Stores online, Amazon
- Item Type: Basic Needs/daily bread, one car (less elastic demand), vs Wants/fancy restaurant, second car for excursions (highly elastic demand)
- Item Quality: Functional quality (large market) vs. bells and whistles
- Growth of Amazon: Service aspect of product
- Survival of Walmart
- Growth of the Dollar Store (catalogue). Where is the BON TON catalogue – the store closed down
- Struggling super stores (Sears, Target, JCP)
- SCM: Focus on mass market product – low margin, high volume, cost efficiencies – continuous improvement
KNOWLEDGE WORK AND WORKERS WILL BECOME GLOBAL IN NATURE
- What was tech territory a decade ago is common skill today.
- Artificial Intelligence at work behind the scenes
- Knowledge work in supply chains today accounts for approximately 40 percent of the total labor hours spent.
- Much of this work deals with complex analytics, planning, procurement processing, and provision of services.
- This nature of the work, the need for multi-language support, and the associated local complexities of the different geographies being served will necessitate the seamless globalization of supply chain knowledge work.
- As an example, you could see a U.S.-centric company performing supply chain planning in the Philippines, operating procurement centers of excellence in Singapore, and conducting global business analytics in Brazil.
- SCM: Wage gap between high-skill and low/mid-skill work grows with time.
- Focus on continuous learning in tune with time and technology
SUPPLY CHAIN MANAGEMENT WILL HAVE A STANDARD CERTIFICATION PROCESS SIMILAR TO THAT FOR CPA
- Many universities offer undergraduate and graduate degrees in supply chain management. In addition, professional associations such as APICS, CIPS, ISM and other offer a range of certification programs.
- However, in most cases these programs either focus on the basics of SCM or on a specific activity such as import/export or financial analysis. We believe that a fundamental shift will occur in the normalized delivery, content served, and certifications of supply chain professionals.
- Many other professions like accounting (Certified Public Accountant) and engineering (Professional Engineers) require national board examinations as well as continuing professional education (measured by a specified number of hours per year).
- A similar professional credentials program will be required for supply chain professionals to normalize the knowledge base of the incoming resources.
- What is in it for SCM?
- Diverse training and specialized skills
- Analogy: Dome and Beam technology
CISCOM course was concluded at Pakistan Institute of Management’s Lahore Centre, on May 05, 2018.
Congratulations to the participants on receiving their CISCOM credentials and to the PIM faculty for achieving another successful milestone.
CISCOM Online Courses start every month – check out course calendar on BRASI web site. Book early as positions get filled quickly.
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Please contact Danish Mairaj, Managing Editor at email@example.com.