A better understanding of political, economic and technology trends driven by data analytics offers SCM advantage. With so much data to consider, where can executives gain insight?
Data-first SCM enables supply chain visibility that must be focused on immediate and long-term events – many of them unanticipated – that can alter your company’s competitiveness and your industry’s entire landscape in a matter of hours.
To be proactive, you must know what to watch, how to measure it, and the right levers to pull. And you must monitor and analyze emerging trends in both your supply chain and across your entire industry’s. Only then you can maximize developing opportunities, or avert setbacks or even catastrophes.
Disruptions like earthquakes, tsunamis, hurricanes and terrorist attacks may be utterly unpredictable. In these cases, data-driven agility is critical to identify and activate post-event alternatives for sourcing, manufacturing, distribution and logistics.
Many events can be anticipated and prepared for using data-driven visibility and predictive analytics. However, a holistic examination can be a massive undertaking. Let’s take a quick look.
Worldwide political and economic upheaval
It pays to track current developments in countries where you sell or source. Even if your company only operates domestically, or in limited geographies, significant events that affect trade overseas can impact your supply chain. For example, if an international crisis causes a sudden, massive shift to near-sourcing, that spike in demand may affect your supplier’s ability to serve you.
What major trends should you watch?
- Potential flashpoints around the world (such as the Middle East and Asia) and the impact of terrorism on the economies and politics of the states where it occurs.
- The tenor of U.S. relations with its key trading partners: Mexico, Canada, China, the EU and Russia.
- Brexit and its impact on the U.K. economy, as well as similar potential separatist movements within other E.U. members.
- Parliamentary elections in Britain, France and Germany.
- U.S. domestic disruptions, including potential government shutdowns.
Reputable sources such as The Wall Street Journal, The Economist and The Financial Times can help to gauge how world events might impact your supply chain downstream. Content is usually behind a pay wall – but a paid subscription to one or all respected international news sources is invaluable.
For trade data, the United States International Trade Commission, the Department of Commerce’s Bureau of Economic Analysis, and the U.S. Census Bureau are good places to start. Keep an eye on currency exchange rate data for all the important players: those listed above, plus Japan, South Korea, Vietnam, Brazil, the United Arab Emirates and others.
What’s really happening in transportation
It’s tempting to focus strictly on where you spend the most money or your most-critical transportation modes. But it’s also a smart idea to be aware of significant shifts in other modes that can affect your usual operations.
For example, volatile fuel prices can drive business to other transport modes – and that may change your network loads that impact pricing. Here are some sites you can use to monitor fuel cost trends, including the U.S. Energy Administration's petroleum index and NASDAQ’s fuel oil index.
Long-term planning can be improved by keeping up with domestic energy pipeline projects, government policies and regulations and global political and economic developments affecting OPEC and other oil-producing countries.
Of course, monitoring the cost of petroleum isn’t enough. Trends in ocean transport – shipbuilding rates, fleet consolidation, and scuttling of excess capacity, plus investment in port infrastructure – can offer insights on far-sourcing and near-sourcing options.
Similar trends in fleet right-sizing, consolidation and equipment replacement impact the trucking industry. Driver attrition and recruiting younger, qualified replacements is another factor that will impact competition and pricing among haulers. Organizations like the American Trucking Association monitor a range of issues that impact truckers and their customers.
The Association of American Railroads publishes weekly data on rail traffic volume in North America. The International Air Transport Association offers business intelligence and statistics to its members, including cargo intelligence and freight forecasts.
Traffic volume data, along with developments in physical infrastructure investment, globally and domestically, are critical factors to monitor. And remember that infrastructure isn’t limited to roads and bridges, or massive, publicly funded projects: it includes airports and deep-water ports, rail connections and warehousing.
Technology-driven disruption
Robotics, the Internet of Things, big data, machine learning and artificial intelligence … Game-changing new SCM technologies are emerging at a pace that can take even the most seasoned pros by surprise these days.
Timely adoption of new technology is not just for the leaders anymore – it’s for the survivors. Don’t be complacent and assume that you’ll have time to react when things change.
Be aware of how new technologies impact manufacturing, warehousing, distribution, logistics, delivery, and even customer experience management. First and foremost track your industry, but try to anticipate how solutions and processes from other industries may migrate to yours and change the current landscape.
Research companies like IDC closely follow emerging technologies and their impact on vertical markets, as do major management consultancies like Accenture and McKinsey.
The retail revolution
Huge transformations created by eCommerce and the omnichannel has rippled across, and even threatened to ruin, historically stable retailers. No matter what industry you’re in – even if you're strictly B2B – there are important lessons to learn from this turbulence, as well as some unexpected impacts to discover from transforming retail supply chains.
Retail sales numbers, personal consumption and GDP growth data are available from the U.S. Census and the Bureau of Economic Analysis. Business and trade news organizations that follow retail and commercial real estate are mapping trends that affect the major players.
That’s a lot of information to digest
The lists above of trends and sources of data only scratched the surface. Industries and individual competitors face unique challenges. Forward-thinking management and expert consultants are helping to develop specific roadmaps and solutions.
Next-generation, data-driven supply-chain visibility will be a critical part of those solutions.
Can the quantification of disparate supply chain trends, like some of those above, be applied to emerging best practices in SCM and help executives confront these issues? What do you think?