SCM and ERP trends for 2010 in United States


I keep on doing research with my limited resources and meet or electronically interact with people, who are at key decision positions at multiple organizations (yes, such is the power of linkedin, facebook etc.) and the last 90 days, I was focused to find out what are the focus areas for them in the next year in terms of technology investments. My interactions also had the purpose to find out their current pain areas and future strategy limited to next year as I do not think that in fast changing scenario of these days, anybody has visibility beyond 12 months span. Let me today share some of the insights with my readers as these are quite interesting and have the ability to influence our decisions. The key findings were:
  • Starting with the most obvious, cost reduction or in-fact cost optimization as people prefer calling it, it is evident from their chalked out strategies that cost optimization is still on top of their agenda when they plan their technology investments specially in the area of Supply Chain Management and ERP. So they will continue to prioritize investments in new technology deployment in areas that will directly affect operational costs and process efficiency
  • Focus industry for 2010 in terms of IT investments is Healthcare. The industry growth is best amongst all verticals in 2009 and will continue in 2010 with similar pace. This is the only industry vertical where SCM and ERP IT investments will not stop and thus this will remain a hot area in 2010. The other industry vertical that will be in focus next year is the federal government of United States that intends to carry out major IT investments in these areas in next 2 years

Since my focus was more towards the manufacturing industry, most of the trends I will talk about, will be related to this industry but since the group that interact to, has stakes in multiple industries so it will help other industries too. The key objectives or trends that I could make out for 2010 are:

  • Improve efficiency of operations by using more real-time process analytics, such as business intelligence (BI) tools.
  • Improve employee productivity by adopting BI analytics and automated process.
  • Reduce operational costs with shared utilities such as utility and grid computing vs. the purchase of stand-alone products.
  • Synchronize product life cycles with consumer demand cycles for maximum value capture by adopting collaborative planning, radio frequency identification (RFID) technology and product life cycle management (PLM)
    BPO and IT outsourcing (ITO) will allow manufacturers to increase their focus on core activities
  • More adoption of Six Sigma and global data synchronization for achieving the best quality
  • CRM and capable to promise (CTP) systems to keep up with clients' expectations

The market drivers for 2010 will be:

  • Cost-reduction strategies
  • Customer-centric strategies that build products around customer needs
  • Globalization of operations for producing the best with the least
  • Imported goods from non-European countries are becoming particularly aggressive and virulent on the market that is also foraged by the strong euro
    Quality is becoming the battleground where European products will fight against non-European imports (especially Chinese)
  • "Green" production — The need to reduce gas emissions in the manufacturing process by adopting more-efficient and automated processes

he identified challenges came out to be:

  • Decrease of competitiveness of European manufacturers with respect to Asian and North American manufacturers
  • Oil prices that shrink operative margins as well as contract consume
  • Speed-up of production technologies over the Hype Cycle as well as high acceleration of the life cycle of products
  • Overall low industrial production growth rates
  • Exceptionally strong euro that inhibits the exports outside of the eurozone

1 comment:

  1. Today, many companies engaging in big or small production, run their business by outsourcing products and services. I sincerely appreciate your effort in conducting a research on the challenges most manufacturers are facing and on how to improve the quality of their services. Yes, manufacturers should improve the quality of their products and services through skills development of employees, cost reduction of manufacturing process, adopting green strategies and focusing on the needs and satisfaction of customers. Sometimes, outsourcing is a means of effective management, too. Rest assured, your research will open many doors in improving the quality of services provided by manufacturers.

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