Succeeding in a Dynamic World: Supply Management in the Decade Ahead

140 Pages·2007·3.54 MB·English

Succeeding in a
Dynamic World:
Supply Management
in the Decade Ahead
Authors
> Phillip L. Carter, DBA
Executive Director for CAPS Research and
Professor of Supply Chain Management, Harold E.
Fearon Chair in Purchasing, W. P. Carey School of
Business at Arizona State University
> Joseph R. Carter, DBA, C.P.M.
Avnet Professor, Department of Supply Chain
Management for W. P. Carey School of Business
at Arizona State University
> Robert M. Monczka, Ph.D., C.P.M.
Director, Strategic Sourcing and Supply Chain
Strategy Research for CAPS Research, and
Distinguished Research and ISM Professor of
Supply Chain Management for the W. P. Carey
School of Business at Arizona State University
> J ohn D. Blascovich
2007 Partner
A.T. Kearney, Inc.
A Joint Research Initiative of
> Thomas H. Slaight
Partner
CAPS Research
A.T. Kearney, Inc.
Institute for Supply Management™
> William J. Markham
A.T. Kearney, Inc. Fellow Emeritus
A.T. Kearney, Inc.
CAPSFutureStudyCover07.indd 1 9/27/07 8:09:38 AM
Succeeding in a Dynamic World:
Supply Management in the Decade Ahead
A Joint Research Initiative of:
CAPS Research
Institute for Supply Management
A.T. Kearney, Inc.
Phillip L. Carter, DBA, Executive Director for CAPS Research
and Professor of Supply Chain Management, Harold E. Fearon Chair in Purchasing,
W. P. Carey School of Business at Arizona State University
Joseph R. Carter, DBA, C.P.M., Avnet Professor, Department of Supply Chain Management
for W. P. Carey School of Business at Arizona State University
Robert M. Monczka, Ph.D., C.P.M., Director, Strategic Sourcing and Supply Chain Strategy
Research for CAPS Research, and Distinguished Research and ISM Professor of Supply Chain
Management for the W. P. Carey School of Business at Arizona State University
John D. Blascovich
Partner
A.T. Kearney, Inc.
Thomas H. Slaight
Partner
A.T. Kearney, Inc.
William J. Markham
Fellow Emeritus
A.T. Kearney, Inc.
Copyright © 2007 Institute for Supply Management™
and W.P.Carey School of Business at Arizona State University.
All rights reserved.
Contents may not be reproduced in whole or in part without the express permission of CAPS Research.
Acknowledgements
The lead researchers for this study would like to thank the supply executives of the more than 260 companies that
participated in this study for their time and contributions. The research was greatly enriched by their insights and
viewpoints on the challenges and opportunities that lie ahead.
The lead researchers would also like to publicly acknowledge and thank the following members of the extended
research team for their contributions to this effort.
• Nadine Schnell, MaryAlice McHale, Julie Couch, Stephanie Tsai, Jitender Uppal and Roshni Puri of A.T.
Kearney, Inc. developed the web-based version of the survey questionnaire, managed the technical aspects of
its use and developed many of the data extract and analysis tools used by the team.
• Debbie Maciejewski of CAPS Research managed the solicitation process for the CPO focus groups, conference
calls and interviews for the web survey, and administered the ongoing communications with survey
respondents.
• Rebecca Sweda, Tuvan Sencalis, Matt Skindzier,Michael Phillips, Arthurine Barned and Deepa Bangaruof
A.T.Kearney,Inc. provided significant analytical and document preparation support throughout the research.
• Inigo Aranzabal, Stephen Easton, Jules Goffre, Mui-Fong Goh, Federico Mariscotti, Jesper Schade, Hasan
Shafi, Per Thompsen, Alfredo Tsutumi, Jan Fokke van den Bosch and Danny Wyatt of A.T. Kearney, Inc.
organized and led CPO focus groups and coordinated web survey participation by supply executives in the
European, Latin American and Asia/Pacific regions.
• Paul Laudicina, managing officer and Chairman of the Board of A.T. Kearney, Inc., provided valuable
guidance and support throughout this effort.
• Jim Brown of A.T. Kearney, Inc., Steve Wade of CAPS Research and Steve Gozdecki, an independent writer,
provided ongoing editorial guidance and communications support for the study.
• Sung Kang, Ph.D. candidate in the Department of Supply Chain Management in the W. P. Carey School of
Business at Arizona State University,conducted sophistical statistical analysis of the survey results, often with
veryshortlead times.
• Yusoon Kim, Ph.D. candidate in the Department of Supply Chain Management in the W. P. Carey School of
Business at Arizona State University, conducted literature reviews and investigated the feasibility of using a
wiki as a data collection tool.
• Steve Koch, IS/applications analyst at CAPS Research, provided IS support for the project and pioneered the
development of a wiki for use with the project.
The principal researchers would also like to thank the Institute for Supply Management, and in particular its CEO
Paul Novak, for ISM’s significant funding of the research project and for providing access to its membership to
reporton the research results at the 2007 Annual International Supply Management Conference and in Inside
Supply Management magazine.
ISBN 0-945968-70-1
2 Succeeding in a Dynamic World: Supply Management in the Decade Ahead
Table of Contents
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Index of Figures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
External Forces Will Affect All Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Tomorrow’s Business Models and Strategies Will Raise the Bar for Supply. . . . . 9
Supply Must Pursue Seven Key Strategies in the Coming Decade............9
Section I — About the Research.......................................12
Chapter 1 — Background and Previous Research Findings . . . . . . . . . . . . . . . . . . 13
ALook Back...................................................13
The Need for New Research.......................................14
Chapter 2 — Research Design and Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Research Participant Demographics .................................16
Research Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ReportStructure................................................17
Section II — How the Environment for Supply Management Will Change ......19
Chapter 3 — Forces Driving Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Survey Results .................................................20
Complex Interactions Between Forces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
What Supply Managers Foresee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Chapter 4 — Impacts on Business Models and Strategies . . . . . . . . . . . . . . . . . . . 28
Keys to Future Success. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Complex Business Models ........................................30
Other Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Chapter 5 — New and Expanded Missions, Goals and Performance
Expectations for Supply Management................................32
Survey Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Delivering More Innovation From Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Contributing MoreBroadly to Revenue Generation .....................34
Anticipating and Managing Supply Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Expanding Cost Management Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Even Broader Missions? ..........................................36
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section III — How Supply Management Strategies Will Change . . . . . . . . . . . . . . 37
Chapter 6 — Overview: Seven Key Strategies for the Coming Decade..........38
E-Survey Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Key Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
CAPS Research 3
Chapter 7 — Developing Category Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Achieving Leading-Edge Category Strategy Development and
Implementation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Strategy Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Strategy Enablers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Chapter 8 — Developing and Managing Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . 54
Structuring the Supply Base. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Supplier Relationship Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Developing Supplier Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Chapter 9 — Designing and Operating Multiple Supply Networks . . . . . . . . . . . . 62
Modular Versus Integral Supply Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Managing Multiple Supply Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Assuring Supply Chain Agility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Chapter 10 — Leveraging Technology Enablers. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ADecade of Technology Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Supply Executive Goals for Technology Over the Next Decade . . . . . . . . . . . . 72
Technology over the Next Decade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Future Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Future Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Conclusion....................................................75
Chapter 11 — Collaborating Internally and Externally . . . . . . . . . . . . . . . . . . . . . 76
Key Success Strategies for Collaboration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Keys to External Collaboration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Keys to Internal Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Technology Support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Protecting Intellectual Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Chapter 12 — Attracting and Retaining Supply Management Talent . . . . . . . . . . . 81
Identifying Needed Skills and Capabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Acquiring, Developing and Retaining Talent. . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Managing a Diverse, Dispersed Global Workforce . . . . . . . . . . . . . . . . . . . . . . 89
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Chapter 13 — Managing and Enabling the Supply Management Organization . . . 91
Moving Away from the Center-Led Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Integrating Supply with Other Functions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Cross-Functional Teams..........................................94
Outsourcing Supply Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Measuring Supply Management Performance. . . . . . . . . . . . . . . . . . . . . . . . . . 95
Conclusion....................................................98
Section IV — Conclusions and Recommendations. . . . . . . . . . . . . . . . . . . . . . . . 100
Chapter 14 — Research Summary and Potential Supply Challenges
for the Decade Ahead...........................................101
Forces of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Supply Mission — The Era of Great Expectations . . . . . . . . . . . . . . . . . . . . . 102
CategoryStrategy — The Era of Dynamic Value Acquisition Strategies .....102
Developing and Managing Suppliers — The Era of Customer-centric
Supply Base Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Developing and Operating Multiple Supply Networks — The Era of
Complex and Dynamic Supply Networks . . . . . . . . . . . . . . . . . . . . . . . . . 103
Collaboration — The Era of Collaboration Without Boundaries. . . . . . . . . . . 103
Technology — The Era of Networked Analytics.......................103
Talent Management — The Era of Killer Talent in Supply Management. . . . . 104
Organizational Design — The Era of Empowerment and Adaptation. . . . . . . 104
4 Succeeding in a Dynamic World: Supply Management in the Decade Ahead
Chapter 15 — Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Key Takeaways. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Appendix A — CEO Survey Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Appendix B — Study Participant Demographic Profiles. . . . . . . . . . . . . . . . . . . . 112
Appendix C — E-Survey Questionnaire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Appendix D — Analysis Strategy and Results of Detailed Analyses . . . . . . . . . . . 131
CAPS Research 5
Index of Figures
Figure 2.1: Research Framework . . . . . . . . . . . 18 Figure 7.1: Creating Additional Value by
Thinking Differently about
Figure 3.1: Average Ratings of External Forces’ Categories. . . . . . . . . . . . . . . . . . . . 44
Impact on Business. . . . . . . . . . . . . 21
Figure7.2: CategoryStrategy Framework. . . . . 45
Figure 3.2: Linear Versus Exponential Growth
Rates........................26 Figure7.3: CategoryStrategy Critical Element
Change......................46
Figure 4.1: Future Importance of 17 Key
Business Strategies .............28 Figure7.4: Rapid Growth Seen for China,
India and EasternEurope as Source
Figure 5.1: Supply Missions and Goals. . . . . . . 33 Markets . . . . . . . . . . . . . . . . . . . . . 48
Figure6.1: Future Importance Versus Current Figure7.5: Most Companies Expect a Net
Level of Implementation.........39 Decrease in Number of Suppliers
by 2012 .....................48
Figure 6.2: Quadrant 1 Biggest Gap —
Collaboration Remains a Figure7.6: FutureCategoryStrategy Focus ...49
Challange....................39
Figure8.1: Developing and Managing
Figure 6.3: Quadrant 2 Biggest Gap — Suppliers . . . . . . . . . . . . . . . . . . . . 55
Information Sharing Across the
Extended Supply Chain . . . . . . . . . 40 Figure 8.2: Developing and Managing
Suppliers — Maturity Stages .....57
Figure 6.4: Many Supply Strategies Are
Universally Seen as Very Figure 8.3: Typical Supplier Segmentation . . . . 59
Important. . . . . . . . . . . . . . . . . . . . 40
Figure8.4: Driving TowardInstitutionalized
Figure 6.5: North America — Emphasis on Supplier Relationships . . . . . . . . . . 59
Internal Strategic Alignment. . . . . . 41
Figure9.1: Supply Chains Will Be Segmented
Figure 6.6: Europe — Emphasis on Global by Product/Customer. . . . . . . . . . . 63
Strategies, External Integration and
Organization..................41 Figure9.2: Designing and Operating Multiple
Supply Networks — Supply
Figure 6.7: Supply Chain Focus in Management Strategy Gaps. . . . . . . 64
Manufacturing Sector,
Administration and Control Focus Figure 9.3: Supplier Networks Will Be
in Services Sector. . . . . . . . . . . . . . 41 Strategically Configured. . . . . . . . . 65
6 Succeeding in a Dynamic World: Supply Management in the Decade Ahead
Figure 9.4: Complex Models Will Be Used To Figure B.4: Interviews and Forums — Industry
Evaluate Supply Chain Risk, Costs, Coverage . . . . . . . . . . . . . . . . . . . 114
Performance and Design. . . . . . . . . 67
Figure B.5: E-Survey — Industry Coverage . . 114
Figure 9.5: Supply Network Flows. . . . . . . . . . 69
Figure D.1: Forces of Changes — Sorted by
Figure 10.1: Technology Tool Evolution. . . . . . . 71 Mean Response. . . . . . . . . . . . . . . 133
Figure 10.2: Critical Success Factors — Figure D.2: Forces of Change — Factors. . . . . 134
Technology Enablers. . . . . . . . . . . . 72
Figure D.3: Business Strategy — Sorted by
Figure 10.3: Technology Tools Will Evolve Mean Response. . . . . . . . . . . . . . . 135
Even Further . . . . . . . . . . . . . . . . . 73
Figure D.4: Business Strategy — Factors. . . . . 135
Figure 11.1: Collaboration Strategies . . . . . . . . . 76
Figure D.5: Supply Mission, Goals and
Figure 12.1: Future Skills and Capabilities for Performance Expectations —
Supply Management Sorted by Mean Response. . . . . . . 136
Professionals. . . . . . . . . . . . . . . . . . 82
Figure D.6: Supply Mission, Goals and
Figure 12.2: Supply Strategies for Attracting Performance Expectations —
and Retaining Supply Management Factors. . . . . . . . . . . . . . . . . . . . . 137
Talent.......................83
Figure 12.3: Talent Acquisition, Development
and Retention Strategy..........85
Figure 12.4: Supply Management Career
Paths .......................87
Figure 12.5: Managing the Workforce of
Tomorrow. . . . . . . . . . . . . . . . . . . . 89
Figure 13.1: Survey Data on Organization . . . . . 91
Figure13.2: Survey Data on Integration of
Supply Management. . . . . . . . . . . . 93
Figure13.3: Organizational Enablement ......94
Figure13.4: Survey Data on Cross-Functional
Teams.......................95
Figure13.5: Supply Management Metrics . . . . . 96
Figure 13.6: Balanced Scorecard for Supply
Management..................97
Figure B.1: Global Coverage. . . . . . . . . . . . . . 112
FigureB.2: E-Survey — Revenue Size ......113
Figure B.3: E-Survey — Respondents’ Global
Presence....................113
CAPS Research 7
Executive Summary
In 1998, CAPS Research, A.T. Kearney and the Institute External Forces Will Affect All Businesses
of Supply Management published “The Future of
Purchasing and Supply: A Five- and Ten-Year Forecast,” Amultitude of external forces will reshape markets,
aresearch study that helped the procurement profession products and industries over the course of the next
understand and preparefor the future. Although many decade. To survive, companies will have to rethink and
of the predictions from that report proved to be true, revamp their business strategies in order to anticipate,
therehas been significant change in the world since react to and even take advantage of these forces.
1998 — and each of these changes has consequences
for how businesses and industries operate, and in turn The research indicates that supply managers are
how companies manage supply. concerned about a variety of forces that will impact
company and supply management strategies. Foremost
As a result, CAPS Research, A.T. Kearney and the among these is the impact of China, India and other
Institute of Supply Management have once again large, developing countries on the competitive
explored the future direction of supply management. landscape. The impact is expected to be felt on both the
The objective of the research was to find answers to demand and supply side, and will create opportunities
these questions: as well as challenges.
• What external forces will have the greatest effect To meet this onslaught of new competition, companies
on business over the next ten years? headquartered in developed economies will need to
• How will business models change as a result of increase in size, with improved economies of scale and
these forces? market power on both the supply and sell sides, to
• How will the mission, goals, performance survive. Thus, in order to successfully compete, many
expectations and strategies for supply companies will be forced to merge and consolidate.
management change to supportthese new
business models? Government legislation and regulation of business will
increase, requiring companies to dedicate significant
More than 260 companies from North America, Europe, resources to ensurecompliance. Government actions to
Latin America and Asia/Pacific participated in the 2007 support economic development, such as tax incentives
research. About two-thirds of the participating and trade restrictions, will have a large impact on
companies came from manufacturing industries, while supply strategies. Political instability could requirea
the rest werefrom service industries. rapid change in supply strategies.
This executive summary distills the main findings and Technology breakthroughs will cause major changes to
recommendations of the research, while the complete how products and services are provided. These changes
report that follows presents the detailed results of the may requirecapital investment, but will lower the
study. customer’stotal cost of ownership. In many industries,
core technologies will eventually be commoditized,
forcing geographic consolidation and concentration of
8 Succeeding in a Dynamic World: Supply Management in the Decade Ahead
the supply base and fundamentally affecting supply suppliers from sharing their best and brightest ideas.
chain structure and relationships. Financial support, equitable sharing of risks and
benefits and two-way protection of intellectual property
In some industries, the downstream supply chain will rights will need to be a part of the mix.
change rapidly due to economics and government
policies. Within other industries, supply chain Supply management has always helped contribute to
dynamics will be influenced by the poor financial revenue generation. Close attention to costs for goods
condition of major trading partners in the chain. This and services leads to more competitively priced end
performance will reverberate up and down the chain, products. A focus on quality and service reduces failure
altering relationships and causing suppliers to seek rates, improves availability and leads to higher customer
other customers and/or sources of revenue. satisfaction and loyalty. Innovations from the supply
market lead to revenue increases from new products
The impact of private equity firms will also be and services.
significant. Many companies and suppliers have already
been bought and taken private by these companies. In Already, there is widespread acknowledgement among
looking to recoup their investments, the private equity supply executives of heightened top-down attention to
firms tend to slash costs, raise prices and change supply risk management. Extended global supply chains
business relationships with their trading partners, that include geographically distant, unproven (or even
affecting supply and supply chain strategies. unknown) suppliers pose supply continuity, liability,
reputational and intellectual property risks.
Companies in developed economies will be held to high
standards wherever they do business in the world. Supply management must more aggressively manage
Supply management will be tasked with working with liability and safety risks as well. Toensurecompliance
the supply base to ensure that it meets environmental with Sarbanes-Oxley legislation, supply must address
standards. Customers, consumers, shareholders, non- internal controls as well as a range of possible risk-
government organizations and government will all exposureareas that includes supply chain disruption,
increase their scrutiny of corporate environmental outsourcing, long-term contracting, leasing and vendor-
practices in all regions of the world. They will demand managed inventories.
that companies take environmentally friendly actions by
doing things like using less packaging material, Performance expectations will be raised considerably as
reducing carbon emissions and making products that global competition forces companies to squeeze
can be readily recycled. unnecessary cost out of every part of their business. For
supply management, this means widening the breadth
of spend areas covered, managing costs more holistically
Tomorrow’s Business Models and Strategies and delivering cost savings faster.
Will Raise the Bar for Supply
In response to these forces, companies will shift their Supply Must Pursue Seven Key Strategies in the
business models, adopt different strategies, pursue new Coming Decade
revenue streams, further squeeze costs, make their asset
base as lean as possible and reshape their capital
Based on an analysis of the survey data and focus
structures. The mission and role of supply management
session and interview learnings, the research team
will be changed in a variety of ways.
concluded that seven main families of strategies will
have the greatest impact on supply management success
The need for innovation will accelerate as companies
in the future.
continue to aggressively pursue new geographic and
demographic markets. With the demand and supply for
Developing Category Strategies that are Robust
innovation in a state of flux over the coming decade,
and Forward Looking
and limited resources within any one firm, companies
Category strategies will become more robust and require
must overcome the usual “not invented here” barriers
engagement not only from multiple functions but also
and tap into all available sources globally.
across enterprises. They will become more agile due to
the fact that they will have to be quickly reconfigured as
Relationships between companies and their external
conditions change. Strategy development opportunities
innovation sources may need to be structured
will be examined across categories where synergies are
differently in the future. This will be especially true
possible; e.g., packing and specific product designs.
wherepast adversarial approaches have deterred
CAPS Research 9