In the January/February 2017 department about the future of supply chain management, I wrote about how APICS used future-casting to develop an ongoing strategic framework, which APICS leaders call The Rise. In this and future magazine issues, I will dig deeper into the rise of supply chain and how it corresponds with other factors, namely
- the rise of urbanization
- the rise of Africa
- the rise of the young and elderly
- the rise of the role of women in global society
- the rise of technological autonomy and intelligence
- the rise of data
- the rise of transparency
- the rise of the speed of change.
As the APICS board of directors and staff members worked together on this project, there was a common theme. Brian David Johnson, a renowned futurist, technologist, and author whom APICS engaged to work on the futurecasting process, says that theme was an increase, or rise. Furthermore, it stretches across economic, technological, and cultural areas.
“The future of supply chains will be significantly affected by these increases,” says APICS CEO Abe Eshkenazi, CSCP, CPA, CAE. “As we look out to the future of APICS, we need to understand, study, embrace, and ultimately take advantage of these factors.”
As with all futures, people play a vital role in what’s to come for supply chain. Therefore, APICS must work to increase its engagement with and responsiveness to supply chain professionals and others. Said another way, APICS must raise its influence and involvement in the world. Consider what Paul Keel, 3M’s senior vice president of supply chain, said earlier this year in a Forbes article: “While historically organizations looked to their supply chains primarily for productivity and cost reduction, today’s high-performing companies count on us for much more—for developing new products, protecting our environment, serving our customers, and driving meaningful value creation across the enterprise.”
How many of the factors of The Rise intersect with Keel’s observation? Let’s take a closer look at the first two: the rise of urbanization and the rise of Africa.
The rise of urbanization
People in cities are more influential to business than ever before. According to the McKinsey Global Institute, the top 100 cities, measured by expected global gross domestic product (GDP) growth by 2025, accounted for 38 percent of the global GDP, or around $21 trillion dollars, in 2007. Further, in 2020, the top 600 cities will account for nearly 60 percent of the global GDP while being home to 25 percent of the global population.
“The Rise related to urbanization has a dramatic impact on the downstream supply chain,” says Sharon Rice, former APICS vice president of strategy and now a strategy consultant. First, she says the population density in megacities significantly decreases the real estate available to open traditional brick-and-mortar stores. Add to that the trend of bringing products to customers—changing from the more traditional idea of bringing customers to products—and it’s clear that both shifts mean a dramatic need to innovate logistics, transportation, and distribution.
Lastly, Rice points out that congestion will heavily influence distribution in megacities, such as Seoul and Mexico City. Because of this, APICS leaders suggest supply chain may experience greater influence from apps, Uberlike couriers, and drones.
The rise of Africa
For years, experts have deliberated the influence of Brazil, Russia, India, and China—the so-called BRIC countries. Now, attention is shifting to Africa. Many nations in Africa, inspired by the growth of China and India, are pursuing economic advancement. However, they also face distinctive challenges.
The 2012 Forbes article “How Companies Overcome Africa’s Five Great Challenges,” written by experts at management consulting firm Bain Insights, highlights the most significant hurdles to doing business in Africa and how to overcome these issues:
Although South Africa has already established itself as a strong trading partner with many companies and nations, Central and Northern African nations now are building their own manufacturing centers. “With high—and growing— numbers of individuals of working age, an abundance of natural resources, and desirable geographic locations, Northern and Central Africa are attracting a good deal of attention in the supply chain,” Rice says.