Supply Chain Developments To Watch In 2006
PurchTips edition #91
By Charles Dominick, SPSM, SPSM2, SPSM3
What Surprises Should You Expect In 2006?
Each new year brings anticipation of changes and developments in every field of business. The purchasing and supply
chain fields are no exceptions in 2006.
Changes and developments bring uncertainty. There are three questions that represent the most significant uncertainties in purchasing and supply chain in 2006.
- Will the "China bubble" burst in 2006? While some organizations have been contracting work to Chinese manufacturers for decades, the last few years have seen a record number of businesses seeking suppliers in China. The fervor around sourcing in China reminds me of the "dot com boom" of the late-1990's, with everyone jumping on the same bandwagon. Will the early adopters consume all of the best Chinese suppliers' capacity, leaving only the worst and least skilled suppliers available for the laggards? Will innovative companies find a way to make domestic sourcing a competitive advantage, mainly through minimized cycle times? Can the growth rate of sourcing to China really be sustained?
- Will JIT programs return with more ferocity than ever? In the US, the Federal Reserve has been raising a key interest rate steadily for quite some time. This approach is expected to continue into 2006 before leveling off at the highest point in years. Most purchasers don't study this trend much, but accountants, controllers, and CFO's do. They understand that, in times of interest rate increases, holding inventory becomes more expensive. So, the "bean counters" will be looking for ways to avoid tying up money in assets. Don't be surprised if you're pressured to slash inventory in 2006.
- Will procurement offshoring become prominent? The outsourcing of procurement was a hot topic in 2005 as US-based organizations like Ariba and Corporate United took on various procurement responsibilities for their clients. Today, word has it that procurement services providers in low-cost countries are significantly investing in their growth. 2006 could see a move from studying procurement outsourcing to pursuing procurement offshoring.
Do You Want a More Rewarding Procurement Career?
Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.
Earning your SPSM® Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM® Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!
Need Better Performance From Your Procurement Team?
Are you a procurement leader whose team isn't achieving the results you know are possible? Maybe it's not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.
You need a performance improvement plan that's easy to implement and quick to produce results. The NLPA can help.
Download our whitepaper "The Procurement Leader's Guide To A More Successful Team." You'll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.
Are You Getting The Most Out of Your NLPA Membership?
Members of the NLPA get more than just articles like this by email. As a member, you also get access to:
- The Procurement Training & Certification Starter Kit
- The latest Purchasing & Supply Management Salaries Report
- Leading-Edge Supply Management™ magazine
- Members-only webinars 10x per year
- And more!
If you haven't been taking advantage of these benefits, why not log in and start now?
Copyright 2006. This article is the property of Next Level Purchasing and may not be copied or republished in any form without the express written consent of Next Level Purchasing.
Click here to request republishing permission.
This is the Web-based version of this article. Click here for the printer-friendly version.
Other Editions of PurchTips:
|« 90 The 3-Way Match, eProcurement, & Pain||92 Supply Base Rationalization: Not 1, But 5 Options »|