This month’s issue of World Trade Magazine is chock full of useful information, particularly its cover article covering 10 Trends That Will Change Your Supply Chain:

1. The Adaptive Process of Operating in Low Cost Regions

I believe that tracking and responding to the relative positions of low cost regions will be an ongoing theme for global supply chain managers. Five years ago, China was “the” source for low cost products; now Vietnam is competing against inland China and parts of India for that same position. Add in the importance of market proximity, whether to the U. S., Europe, or emerging urban markets in India and China, and it becomes even more necessary to understand how an area’s character fits with a firm’s global supply chain strategies.

2. Managing the Risk Inherent in Global Outsourcing

Unfortunately, we see many firms that have not placed their outsourcing strategy within the context of a complete global strategic plan. There is invariably pressure from the top to reduce direct, visible cost. This quickly evolves into an outsourcing strategy to take advantage of the incredible pool of low cost labor in other regions of the world: Asia, Latin America, and Eastern Europe.

When pursuing an outsourcing strategy, it is hard for many companies to stop and consider risk because they are blinded by the huge savings potential.

3. Lean Six Sigma Logistics

While the practices of Lean and Six Sigma are commonly applied in manufacturing, they are rarely used elsewhere in the supply chain. This is changing, though. Leading companies are finding that the application of Lean and Six Sigma makes good business sense in logistics management as well, given that wastes and process variation exist throughout our logistics and supply chain networks.

4. Use of 3PLs

Looking to the future, many 3PL-customer relationships are evolving from conventional customer-supplier relationships to true “partnerships.” Accomplishing this objective would allay a frequent criticism from this year’s survey respondents: 3PL providers many times “react” to situations; they do not anticipate and identify opportunities to improve. To be fair, the study results also suggest that customers sometimes limit their 3PL providers from demonstrating their full set of capabilities. The good news is that upgrading the quality of customer-3PL relationships is an objective of 3PL users in all of the geographies studied.

5. Structuring High Performance Supply Chain Relationships

Management’s goal should be to establish the correct amount of closeness in their firm’s supply chain relationships, not to just get close for the sake of being close.

6. Trading off the positives and negatives of Service Level Agreements

For example, a retailer could require a supplier to achieve a certain fill rate (fraction of demand met from inventory) over a specified review period. Such service level measures are often part of a supplier scorecard. The important question is, are these service level agreements (SLA) effective at resolving misaligned incentives and improving performance?

The short answer is, yes, usually such SLAs do improve performance by providing a supplier incentive to improve service, thus improving the overall performance of the supply chain. Recent research has shown, however, that imposing such SLAs on suppliers can drive strange inventory management strategies.

7. The Impacy of Reduction in Supply Chain Variation on Shareholder Value

Supply chain management should be viewed as a powerful tool affecting all three drivers of financial performance/shareholder value. While holding the right mix of inventory could result in revenue growth, providing the same level of service with a lower amount of inventory (safety stocks) would result in shorter cash-to-cash cycle time and higher liquidity, allowing firms to grow faster and create shareholder value.

8. New Product Launches and the Supply Chain

To ensure the success of a product launch, one needs to pay close attention to supply chain design, sales and operations planning, as well as supply chain coordination.

9. Revitalized Supply Chain Command

The next era, the era of revitalized command, is already upon us.

The multinational enterprise is becoming more risk-averse and less likely to over-extend itself through alliances; at the same time, it is showing an emerging bias toward more direct absorption and control over assets in its network.

10. Transforming Supply Chain IT into “Business Technology”

The visibility of the entire supply chain in real time is one of today’s overarching goals, and automation plays a big role in that. Nonetheless, more than half of supply chains are still managed manually with phone, fax and paper, making it virtually impossible to have visibility into the overall supply chain….

Read the whole thing.

Stumble it!