Listening to Bob: Supply Chain Predictions for 2009

As I've said before on Spend Matters, I have a tremendous amount of respect for Bob Ferrari, author of the blog Supply Chain Matters. So when he offered up his supply chain predictions for 2009, I made sure to take note. In the sea of yearly prognostications and predictions, it's easy to get lost in all the pontificating that goes on. But if there's someone worth listening too, it's Bob (who has previous experience leading supply chain research for both AMR and IDC, in addition to years spent serving as a practitioner). In his predictions for 2009, Bob suggests, among other areas, that we should expect that "global supply chain flexibility will be radically reduced." Expect increased lead times as capacity comes off line. To overcome the challenge of slower supply chain throughput coupled with variable customer demand, invest in "global-wide supply chain visibility to sense changes in supply or demand patterns" to take action before you miss customer deadlines and orders. Bob also believes that the basis of supply and demand in markets will fundamentally change as the recession continues to rear its ugly head and as companies go belly up. This will force organizations (both buyers and suppliers) to spend extra time monitoring and managing existing relationships. As Bob puts it, "I believe that strategic sourcing and procurement professionals will face a continuous challenge to just maintain existing supply agreements, and may well have to also consider structural change in the way suppliers are selected and managed. More than ever, in 2009, maintaining strong supplier relationships will be a key to navigating severe disruption."

Coming from an unflappable old industry hand, these predictions are about as dire as they can get. If they're to be believed -- and I think Bob is more right than wrong -- we’ll spend 2009 as much in defensive triage mode as focusing on strategic cost reduction programs. Not a good sign, but better to be safe than left holding an empty supply bag.

- Jason Busch

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