Now that the Eastern
European economies have
exited the recession (as indicated by recent GDP growth
trends), these markets are
once again drawing
increased interest from
investors. And as the region's
economies are coming back
into the spotlight, so are the
local supply chains. With
such sectors as retail, consumer goods, agribusiness,
manufacturing among those
attracting the most investor
attention, supply chain excellence is bound to play a critical role in propelling these
—Viktoriya Sadlovska, managing director of Prameya Research
Eastern European Supply
Chains Back in the Spotlight
The Eastern European market comprises economies different
in size, structure and infrastructure development levels. Hence,
There are multiple logistics and distribution challenges for companies trying
to compete in countries like Russia, Ukraine, Belarus or Moldova. These
include the lack of reliable supply chain infrastructure (roads, rail, distribution
center and warehouse facilities, etc.), the lack of logistics management knowledge and strategic approach to SCM, complex regulatory environments, etc.
These challenges are fueling the demand for specialized third-party logistics
services in the region. Besides the core SCM expertise, such outsourced
providers are also likely to have better insight into how to navigate the peculiar-ities of the often confusing local regulations.
Today, most local companies in countries like Russia, Ukraine, Belarus or
Moldova do not have an integrated view of SCM and tend to view its functions
in silos. Manufacturers, distributors and retailers operating in these markets can
reap significant competitive benefits by taking an integrated view of SCM and
investing into building supply chain excellence internally.
There are sizable opportunities for development not only in regional supply
chain infrastructure and knowledge, but also in enabling software and automation
technologies throughout the value chain. A growing number of local software
firms are offering SCM solutions, and global software players have already established regional presence. Local branches or suppliers of multinational companies
are driving increased awareness of the benefits of SCM software solutions, as these
are often mandated by the global parent or partner company.
Over the next decade, supply chain infrastructure, SCM techniques and knowledge, as well as the market for supporting SCM products, software and services
in Eastern Europe are poised for strong growth. Companies that have a long-term vision of having a presence in this region should invest in their local supply chain capabilities today.