Managers today face an apparent contradiction. On one hand, austerity in the developed world and intense competition push them to cut costs and drive efficiencies. On the other, the increasing pace of change means they need to emphasize innovation. Resolving this contradiction requires ambidexterity"” the ability to both explore new avenues and exploit existing ones.
European Commission delivered a bleak assessment Friday of Europe's economic prospects, saying that growth would be just 0.1 percent in the 27-nation European Union in 2013 and that the 17-nation euro zone would shrink 0.3 percent over the same period.
It seems like a cruel joke. At the same time we hear about the return of manufacturing jobs from Asia to the U.S., we are inundated with stories about the growth of robotics, which threatens to take away those very jobs for good.
Analyst Insight: The corporate goal is to drive profitable growth. Growth happens through success in new products, capturing market share in emerging markets or brand building in existing regions. To make these initiatives successful, the supply chain matters more and more; however, the greatest success happens when companies shift from marketing-driven to market-driven value networks. In market-driven value networks, companies build the capabilities to listen, test and learn in vitro with zero data latency to maximize market opportunity.
- Lora Cecere, Founder of Supply Chain Insights
Analyst Insight: In order for businesses to succeed in an increasingly competitive marketplace, they must find new ways to add value. At John Deere, that means collaborating with dealers to expand the brand from selling equipment to offering solutions that improve the productivity of farming. For leaders in supply chain management, it means developing strategies that create value across the supply chain through innovation, responsiveness and agility.
- Robert D. Boyle, Director, John Deere Chair, APICS The Association for Operations Management
In recent years, supply chains have become longer and more complex, while the severity and frequency of supply chain disruptions seems to be increasing. In close cooperation with Accenture, the World Economic Forum recently presented a report, "Building Resilience in Supply Chains," at the WEF Annual Meeting in Davos, Switzerland. It indicates that significant supply chain disruptions reduce the share price of affected companies by as much as seven percent on average.
Analyst Insight: The talk in outsource circles these days continues to revolve around the need for bigger and better collaboration and innovation. Some articles talk about the end of outsourcing, but what they mean - and a better way to put it - is to think about the end of outsourcing relationships as we know them.
- Kate Vitasek, faculty, University of Tennessee's Center for Executive Education. and Founder, Supply Chain Visions
Analyst Insight: With the government of India recently liberalizing foreign investment into the country's retail sector, many global retailers are eyeing the country as the next expansion opportunity. The experience of early entrants into India's organized retail has shown that supply chain inefficiencies are among the top hurdles to profitability. The unique Indian context requires creative sourcing approaches and significant investment in training and retaining local skilled supply chain talent.
- Viktoria Sadlovska, Chief Research Officer, Prameya Research
Analyst Insight: Third-party logistics providers continue to be the recipients of outsourcing requirements and have grown to provide a critical business capability, but the business rationale in selecting an outsourcing partner appears to be changing. The use of 3PLs remains compelling, with shipping companies continuing to report productivity gains - along with cost reduction and service enhancement - but in discussions with clients, increasingly manufacturers are looking to leverage industry best practices and process knowledge as a first priority.
- Simon Ellis, Director, Supply Chain Strategies Practice, IDC Manufacturing Insights
President Barack Obama is trying to persuade the United States to adopt a cap-and-trade system to curb greenhouse gas emissions. But the European Union's Emissions Trading System "” the world's flagship effort "” is sputtering. European carbon permits, which traded at about €30 ($40) per ton a few years ago, are now hovering at about €5 per ton or less.