Trends in Supply Chain Management

INTRODUCTION

Rapidly changing and advancing technologies, increasing globalization, shifting demographics and greater regulatory oversight combining to create fundamental shift in business environment leading to new opportunities, challenges and risk for business managers. Firms in the twenty first century are grappling with a constantly changing world. Businesses are required to have products that are environmentally friendly and do not cause harm to the environment thus requiring companies to work more closely together to ensure that environment is preserved while at the same time ensuring that value to the customers is added with every product designed to meet that need. In this paper the focus is on discussing the key future trends in supply chain management that are emerging as firms search for new ways to create value. These future trends are outsourcing, globalization, going green, collaboration and information technology.

TREND #1: OUTSOURCING

Growing global sourcing of business services throws a variety of important business and policy challenges in both developed and emerging economies. Sharma and Loh (2009) define outsourcing as the contracting of some corporate activity or task to an external entity or person. In most cases companies would outsource an activity if it is not their core activity thus outsourcing becomes a solution as it reduces the costs and at the same time allowing the company to focus on its core function of business. Sharma and Loh (2009) assert that manufacturing companies have long leveraged outsourcing and offshoring low value services such as cleaning and security work for quite some time. However, organisations are now outsourcing more critical activities such as design, manufacturing, marketing, distribution and information system (Mclor, 2005).

Benefits of Outsourcing

Simchi-levi, Kaminsky and Simchi-levi (2008,281) state that through the 90’s, strategic outsourcing, outsourcing of key manufacturing components was...