Demand for Supply Chains Predicted to Increase in 2014

Experts predict a supply chain demand surge in 2014.

IHS Global Insight economists are predicting a demand surge for supply chain managers in 2014. A report from IHS stated that the improved economy is a major factor in this prediction.

Gross domestic product on the rise
​IHS Global Insight Chief U.S. Economist Doug Handler told Supply Chain Management Review that there are two key factors for the increase in the supply chain: a jump in the need for gross domestic product and a stable economy.

"Third-quarter real GDP grew at a 2.8 percent annual rate – well above consensus expectations, although 0.8 percentage point of this growth came from increased inventories," Handler said in a statement. "We believe at least some of these inventories were unplanned, triggering offsetting forecast changes in the coming months."

Government shutdown had little effect
One of the other key contributors that surprised IHS economists was the increase of jobs over the last month. The Supply Chain Management Review stated that during the month of October, 204,000 jobs were created. This comes as a major surprise to many experts because they thought the government shutdown that occurred in October would affect several sectors, although it had effect anywhere. USA Today reported that the U.S. added 203,000 jobs in November, showing that the economy and job market is on the rise.

Along with an increased amount of job growth, consumer spending will play a part in the supply chain demand surge for 2014. The SCMR economic report stated over the last six quarters, consumer spending attributed to between 1 and 1.5 percent of the overall growth of each quarter.

Retail looks to change business model
Along with an increase in jobs and consumer spending, the retail industry looks to make a major contributing factor in the supply chain push. IDC Retail Insight had a webinar on Dec. 10 and offered a few predictions for the upcoming year. One of the predictions was that retailers will double their industry supply chain investments next year and by 2016, 50 percent of national retailers will increase their output to meet consumer demands. IDC Retail, Energy and Manufacturing Group Vice President and General Manager Robert Parker said during the webinar that over the next three years the retail world will reinvent itself.

"In the next three years, retail will reinvent itself as omni-channel leaders reach for customer relationship, relevancy, and reciprocity," he said. "A new replacement cycle of enterprise, planning, and commerce systems will anchor complex company wide business transformation for immersive experience and commerce. Quick-to-market leaders will improve same-shopper sales — fast becoming the most significant leading indicator of future performance."