Coping with and Adopting to the Emerging Issues and Trends in Supply Markets
Companies need to devise strategies for dealing with the emerging issues and trends in the supply market.
a) Adopt Network thinking
In the past, firms have characteristically considered themselves to be independent stakeholders in the market and, at best, managed interfaces to direct vendors and consumers. In contemporary networked economies, this is just not sufficient any longer. Firms are at most times forced to work in partnership with others both vertically and horizontally in their enlarged supply chain network, and their partners expect them to incorporate their processes and systems. Firms are compelled to adopt network thinking rather than company thinking.
b) Devise cost reduction strategies
Consumer expectation of low cost continues. Despite increased requirements including sustainability, social issues or risk-mitigation capabilities being evaluated in the media, cost pressure continually appears as the ultimate criterion for consumers. With the trend towards improved customer expectations, it is becoming even more difficult to reduce costs any longer depths. Logistics costs play a crucial role in the reduction of overall costs. Logistics costs share of overall revenue is as low as 4% and 6% in the electronics and automotive industries, respectively.
c) Adopt globalization strategies
As worldwide footprints increases, logistics performance as evaluated through delivery reliability has worsened, as a result of increasing customer needs, increased volatility, as well as challenges with infrastructure. Most players in the industry agree that their company’s logistics capability is negatively affected by poor transportation infrastructure, which is a great challenge more so in the emerging markets. In sum, globalization unequivocally amplifies other trends and contribute to a rise in complexity, specifically in regions of growth that including Russia, Eastern Europe, India, and Africa.
d) Address talent shortfall challenge
Across all regions as well as sectors, the shortage of talents in logistics is viewed as one of the most critical problems in the coming years. Shortages are being viewed at both the operational level as well as the planning and controlling role. The most critical tactics for coping with talent shortage are training and qualification programs and strategic cooperation with higher education institutions and other research entities.
e) Handle Sustainability pressure:
This trend has emerged as a very serious topic. Corporate social responsibility has also developed as a highlight for debate. However, there remains a great deal of uncertainty in the implementation of these strategies, particularly relative to measurement systems, evaluation and setting objectives and strategies relating to logistics sustainability.
Discussion of challenges and opportunities posed by the emerging issues and trends in Supply Market.