Scm World’s 2016 Report on Supply Chain Trends Reaction

The results of SCM World’s 2016 report on supply chain trends are interesting in that they have great implications for the future of supply chain, literally living up to the report’s title. Even though we have seen milestones from the early stages of supply chain management development, changes and new trends in the recent years have only accelerated and only continue to potentially become game changers.

Based on the report, digitization is the primary trend that will be impactful to the future of supply chain. And the group fully believes in digitization’s capability to pave way for the advancement of traditional supply chains toward a highly efficient and connected supply chain environment.

One thing that interests us is that the empirical evidences shown in the report regarding how industries around the world are reacting to the intense trend towards intensity of product at the point of sale. In particular, it’s interesting to know that digital demands in the form of increasing their SKU counts so that

It’s amazing to realize that these developments in the growing SKU counts are according to industries, a response to accommodate consumers’ growing demand for personalization and customization and not just a general market trend or fad. Or is it?

The group thinks while these claims of industries as driver for their increasing SKU counts are actually good, the degree reliability of information where these came from are imperative because there is a thin line between it being a trend to last and it being just a current fad. And although the number of industries responding to this has grown in 2016 vs its 2014 levels, it is still beyond majority. This is probably because more industries lack the capability in terms of both financial and operational resources as expanding SKU counts requires investment. Not to mention that there is an imminent threat of internal cannibalization.

The group is also intrigued with the overall impact of E-Commerce and mobile consumers on the level of customer fulfillment. Being technology savvy and users ourselves of this type of innovation, we have witnessed firsthand how developments on this point of sale have changed the game, specifically in the retail industry. Gone are the days that one has to necessarily go to supermarkets, department stores, hardware etc to personally procure items and products. This development has indeed reshaped the way trade channels used to operate.

However, the report shows that for some sectors that are more experienced with e-commerce like fashion & apparel, retail and logistics & distribution the trend is starting to stabilize. In fact, all the mentioned sectors showed a decline in the percentage of building direct-to-consumer capabilities. This is a little surprising considering that the e-commerce say for the fashion industry at least for the Philippines, has a relatively higher popularity today than a few years back. It is explained that this reflects a transition especially with the growing interest in local distribution centers.

Interestingly,