Based on these conversations, I’ve put together a brief list of five trends that I’m tracking. The first is an outgrowth of last week’s post, the next two are from ongoing discussions with key vendors, and the last two came courtesy of two articles I ripped out of The Wall Street Journal this week.
Demand for social supply chains is starting
Last week’s post on social supply chains drew several positive comments and a lot of personal email. While readers acknowledge that there are cultural/political barriers, many see the need for a collaboration medium like salesforce.com’s Chatter to serve as the system of record for all discussions between brand owners and tier 1 suppliers. Let’s see where this goes.Hottest trend: Supply Chain Control Towers
Over the last three weeks, I’ve talked to three software vendors that are developing control towers to manage the extended supply chain. Not surprisingly, each has taken a different tact. One is focusing on the infrastructure needed for near real-time sense-and-respond. Another is morphing planning and execution functionality to allow changes in supply and demand to cascade up and down the chain from the brand owner to the supplier’s supplier. The third is adding simulation capabilities on top of its popular planning software.
This is just the start. Many more vendors are expected to offer their own versions over the next couple of quarters.Supply Chain Execution-as-a-service
In the last 10 days, executives at two software firms asked me for my perspectives on outsourcing core supply chain processes. At first I thought they were talking about some of the demand planning outsourcing that Accenture was performing for clients at a Mumbai site that I visited in 2007.
That wasn’t what they meant at all. Instead, they asked what I thought about contract manufacturers offering to manage the procurement and manufacturing processes for their customers. While it’s hard to imagine a company like Dell ceding this level of control, I could see how this type of service would have appealed to salesforce.com in the fictional DealBook scenario I created last week. This bear’s watching.Titanic supply chains
Six years ago while I was at AMR Research, I wrote about the concept of “predatory supply chains.” I argued that smart companies look for ways to cut off their competitors’ oxygen. The two examples I cited were Apple’s cornering of the flash memory market before the launch of the iPod, and Toyota’s investment in and purchasing deal with a core supplier of hybrid transmissions that prevented others from matching Prius sales.What’s the flip side of predatory? How about Titanic where a partner’s failures can sink your boat?
Last Tuesday, The WSJ wrote about how “Nokia’s Troubles Hit Suppliers.” Nokia’s cell phone sales woes have caused problems for chipmakers at STMicroelectronics and Texas Instruments. STMicroelectronics’ wireless division saw a 34% drop in second quarter sales over the same period last year. This resulted in a $102 million operating loss.
Nokia is TI’s primary customer for applications processors having bought 85% of units shipped. TI recently blamed Nokia for its lower quarterly sales guidance. Overall, TI’s share of that processor sector has dropped from 34.5% to 19.2% over the last year.
It’s not just Nokia’s travails. Hewlett-Packard’s recent decision to stop producing WebOS products could not have been viewed as good news inside Qualcomm which had been a key chip supplier.Retailers: Give your best customers a free iPad
OK, so this one is a stretch. Last Wednesday, The WSJ published an article based on a Forrester Research survey that found that tablet users were more likely than PC users to buy something from a retailer’s site – 4-5% conversation rate versus 3%. The same piece said that tablet users also spent more per order – as much as 10-20% more.
If you remember my reference to Burberry in my September 8th post, it would not be too much of a leap to imagine the fashion leader distributing tablets clad with its iconic tartan pattern to key customers. Here we see the convergence of social commerce with the social enterprise.What do you think?
As always, I welcome your feedback and ideas. Please add to the conversation.