1. The gap between the “haves” and “have nots” will grow: Jason expects supply management leaders will continue to expand their advantage by transitioning from transaction- and price-oriented supply relationships to more collaborative supply networks focused on joint product development and process improvement. He points to Toyota’s much-admired supplier development and improvement initiatives. (An apt choice considering that Toyota’s development and securing of hybrid engine supply has reportedly irked rival automakers that want to cash in on demand for alternative fuel vehicles.) Jason highlighted similar approaches from Boeing, which will rely heavily on suppliers to deliver most modules for its new 787. In return, Boeing has shored up nearly half the world’s Titanium supply to satisfy production of the new airliner. Interesting side note: supply management leaders will pay higher salaries and be more aggressive users of technology than their peers.
2. Low cost country sourcing goes away: Jason says LCCS will become irrelevant as enterprises begin to market and sell into low-cost regions. (This prediction is consistent will my previous research that found that supply managers are the “Marines” of the business world, scouting out new regions and setting up local supply lines that will be required to support their companies’ sales efforts in the region.) In the future, says Jason, “overall country competitiveness and flexible strategies will trump labor costs.” Again consider investments that Toyota and Honda have made in securing and developing supply in North America at a time when U.S. companies are looking for offshore sources.
3. Procurement will have a dotted line to all areas of the business: Jason says, “Procurement will increasingly be the road that bridges all aspects of the organization.” Playing this new part will require supply managers to acquire an entirely new skill set, including improved financial acumen, engineering, and risk management skills. This echoes the skills challenge debate we’ve been having here at Supply Excellence.
4. Risk management and sustainability will become bigger than you think, sooner than you think: “Preparing for – and actively managing – risk will be as important as reducing costs,” says Jason. Indeed, research I have conducted indicate that in this era of globalization, inflation, and tightening supply markets, chief procurement officers rate supply assurance and risk management as Job #1.
5. Technology – as we know it – will change entirely: Jason predicts that the next wave of supply management technology will be focused on streamlining and improving external networks – not internal operations. He also anticipates the rise of intelligence services – such as category and supply market insight – that can be accessed as Web services to improve supply decisions and mitigate risks. Says “Think Bloomberg – not SAP.” Jason also notes that On Demand and Software as a Service (SaaS) application delivery models will become ubiquitous. “When it comes to technology, it will be innovation that counts,” says Jason. “And the SaaS model enables more frequent enhancements that are instantly accessible to all users.”

While lacking controversy, Jason’s predictions are spot on. Supply management has arrived as a strategic business discipline that, when executed properly, delivers significant value and continuous improvements (not just cost reductions) to the enterprise. CPOs and supply chain executives will need to function as part general manager and part coach to recruit new talent, call new plays, and use new equipment to meet this new role.