We’ve reached the halfway mark of 2009. Are you better off today than you were six months ago? The answer, I suppose, depends on how you keep score. For me, I keep it simple: Every morning that I wake up is a good day.
This morning I decided to revisit the logistics predictions that I made back in December. Overall, my predictions haven’t been too far off the mark (maybe they weren’t bold enough). In any case, here’s a quick summary of my predictions, along with my mid-year assessment.
- Many companies will “panic” because of the economy and do things that might benefit them in the short term, but could potentially hurt them down the road. In my opinion, the huge layoffs that have occurred over the past six months (raising the unemployment rate from 7.1 percent in December to 9.5 percent in June) is an example of a “panic” move that will hinder some companies down the road when the economy recovers (see “Talent Management in Supply Chain and Logistics“). Another example is the “war for cash” taking place in supply chains, whereby companies are delaying payments to suppliers, while they seek to get paid faster themselves. This tactic is not only straining supplier relationships, it’s also causing many suppliers to go out of business (see “Supplier Survival: Ford Plans to Halve Supplier Base“).
- A leading Logistics Service Provider will acquire a leading Logistics Software Company. Well, this one is still a work in progress, but news last week from Landstar validates the “spirit” of this prediction. The company announced last week that it acquired Premier Logistics and A3 Integration (A3i), “two supply chain transportation integration companies.” Although Premier and A3i aren’t exactly what I had in mind in terms of leading logistics software companies, the coming together of a logistics service provider (3PL) and technology-oriented companies certainly validates a trend I’ve been writing about for several years, namely the converging business models of 3PLs, technology companies, and consultants. According to Henry Gerkens, Landstar President and CEO, “These two technology-based acquisitions immediately position Landstar as a premier supply chain solutions provider for small and large customers alike in a software-as-a-service (SaaS) environment. Landstar independent sales agents will now be able to offer customers complete integrated supply chain solutions with industry-leading technology. Additionally, our third-party capacity should benefit from increased loading opportunities created through this new service offering.”
- More logistics software companies will venture into managed services. This prediction is really an extension of the previous one. Back in December, I highlighted LeanLogistics and i2 Technologies as examples of software companies that have ventured into managed services. Although other software vendors haven’t gone down this path directly, they have via partnerships (e.g., Sterling Commerce and Chemlogix, MercuryGate and enVista). I expect this partnership approach to continue.
- The era of re-regulation begins. Okay, so this was a very safe prediction to make. The Employee Free Choice Act and cap-and-trade (aka Waxman-Markey) are arguably the two most important pieces of legislation supply chain executives have on their radar. Cap-and-trade is a step closer to being enacted after passing the House a couple of weeks ago. Things have quieted down a bit with EFCA, with health care reform and cap-and-trade in the spotlight, but I suspect this is just the calm before the storm that will come ashore later this year.
Do I dare make new predictions for the balance of 2009? A couple: Swine Flu (H1N1) will create supply chain headaches in the fall and winter (see “Swine Flu and the Readiness of Healthcare Supply Chains“), and we’ll see “an app store for logistics software” (ala iTunes) move from concept to reality (see also “The iPhone as a Logistics Visibility Device“).
What are your predictions for the balance of 2009 and beyond? Post a comment and let me know.
