Supply chains are never static – they are constantly evolving and changing. This happens on the micro-level with the individual order, but also on the macro-level where huge industry shifts affect everyone. In fact, in the end-to-end supply chain, we’ve been undergoing some of the biggest changes ever, mostly fuelled by technological advances, and that landscape is still changing.
Change has a huge effect on your supply chain. At the Gartner Supply Chain Executive Conference in May, Gartner Research Director Tom Enright highlighted the factors which are happening right here and now, and affect your end-end-end supply chain.
Of course, customers have always been central to everything to do with the supply chain. However, what’s changed is the power that the customer now has over the supply chain, and their ability to both engage, and interact with the supply chain on their terms. Customers are an increasingly demanding force, and able to be so. You need to be delivering the entire experience as well as a high-quality product – on time, quickly. The result is that the lines between different levels of the supply chain are blurred.
The problem for your supply chain comes when it isn’t capable of operating in this demand-led field. Customers have a myriad of ways in which they can buy and interact with a product. You need to be in every single one.
Global Purchasing Power
The global landscape of commerce is fundamentally shifting. Whilst the G8 has traditionally led the way, we’re now seeing the E7 (emerging economies), such as China and Brazil, vying for centre stage. These countries are increasingly the ones with the most purchasing power. This gap looks set to continue.
The effect of this on the supply chain is the need to rethink your product distribution – who are you distributing to, and where? Supply chains of the future need to be looking at these markets and ensuring their supply chain network design incorporates them. In practical terms, this might involve relocation of certain levels and areas within the supply chain.
If we sound like a banging drum about technological advances in the supply chain here at Paul Trudgian, that’s because we need to. Digitisation is here to stay and growing apace, and if you’re not yet facilitating that, and utilising that, within your supply chain, then you’re as good as a dinosaur.
Supply chain businesses need to be aware of every tiny element of their business that can and should be operating more efficiently with the right technology. This includes managing cyber risk and using data insight. At its heart is the fundamental shift that we are experiencing with the advent of the Internet of Things (IoT). Connected devices – utilising them, and catering for them – should be a central tenet of every part of the business.
Uber have brought something utterly unique and transforming to the global marketplace, and we’re going to increasingly see that effect spreading to other areas, particularly logistics. Logistics, with last mile delivery in particular, is being radically transformed by this shift (read about this in our article Get Ready for Logistics Disruption). However, other areas will also be affected with talent jumping from project-to-project on a demand-led basis. Supply chain skills and talent will increasingly move from organisation to organisation in a way we haven’t seen before. The process of ‘uberization’ should help to improve efficiency.
At the Gartner talk, Tom Enright went on to suggest solutions and strategies to enable end-to-end supply chains to adapt to these enormous factors. He suggests a number of capabilities you should focus on.
Talent Resources: There is a huge talent gap widening in supply chains due to the global workforce reducing, and the right talent not just yet coming up through the ranks. Leadership in supply chains is going to look very different from how it did just 10 years ago, and current leadership needs to plan for that, including investing in talent and developing it. You also need to think outside the box and realise the labour saving benefits of robotics, and start realising how to integrate your human talent with your robotic talent.
Corporate Social Responsibility: The new and onward generations of consumers make purchase decisions based on ethics and social responsibility. There must be complete transparency in how you operate. This means that you should ensure you have a Corporate Social Responsibility (CSR) strategy in place now, and adapt it over time. Gartner also predicts that it is only a matter of time before this encompasses being global citizens in your actions from the environment, to your labour, and more.
Algorithmic Business: With digitisation comes opportunity. You can, and indeed must, start to use artificial intelligence (AI) and machine learning (ML) to create greater efficiencies in the way your supply chain operates. With this comes data insight, which can be immensely powerful if you can harness it.
Economies of Connections: All of these points put together, Gartner believes, means you should really focus on the power of network relationships and partnerships, and seek to maximise value through them. Through collaborations, greater efficiency and success can be found for all of the different parties within the supply chain. For example, shared transportation can reduce costs for all involved.
There is no doubt that all supply chains are going to be subject to these global factors, and if they don’t adapt then they won’t survive. The supply chain landscape is radically changing, but with that comes immense opportunity. Those within the supply chain industry who embrace the change, and seek to use it to create greater efficiencies, will be the industry leaders of tomorrow.
Paul Trudgian can assist your organisation by identifying the factors that will have an effect on your supply chain. However, we go beyond this to create workable solutions which will help your supply chain business adapt and thrive in the ever-changing global marketplace.