Supply chains are changing and evolving into something new. Gone are the days when a supply chain was just moving a product from one place to another, today they require a considerable amount of complex movements that all need to be co-ordinated and tracked.
Consumers and retailers today want to have the best possible supply chain that can offer both flexibility and efficiency and the aim of next gen supply chains, is to provide this.
So what makes a next gen supply chain? Below we have the seven main aspects that next gen supply chains are attempting to create.
Supply chains need to be data driven. This means that data needs to be collected from as many sources as possible in order to create wide ranging insight that can have a positive impact on the supply chain as a whole. This could be anything from tracking where a particular product is, to the speed of movement in certain areas.
These insights will allow companies to optimize their supply chains based on informed analysis rather than gut feeling of what is quicker or more efficient. It also means that the performance of any one aspect can be monitored and maintained or improved.
Having a supply chain that damages the environment is something that most companies want to avoid. We have seen from companies like Nike, that it can create negative press for the company. In addition to this, oil prices are only likely to increase in the future as reserves decrease.
This means that people want to have a greener supply chain that does less damage to the environment whilst also running on green fuels that can make a supply chain more sustainable.
Finding a supply chain that is attempting this through every stage is almost impossible, but next ten supply chains will be those who are attempting this through as much of their supply chain as they possibly can.
The speed at which products can be delivered is important for both retailers and those involved in the supply chain. Not only do companies want to have stock as soon as it’s needed, but those working within the supply chain want to be able to move more in a shorter amount of time.
Possessing the ability to quickly react to demand is going to be one of the most important pillars of a next gen supply chain as the demands of expectant consumers mean that companies are looking at new ways to get products delivered in less time.
For instance, Google and Amazon are both experimenting with drones for delivery to attempt to break the illusive 30 minute delivery barrier. It may be sci-fi at the moment, but the reality is that this kind of speed will be what supply chains will be looking for in the future.
Next gen supply chains will need to be an agile operation that can adapt to changing circumstances. This is not only in terms of how things are delivered, but also in reacting to problems within the supply chain. For instance political instability like we are seeing in Russia, disease such as Ebola and natural disasters like the tsunami in Japan.
These kind of actions are both unpredictable and devastating to supply chains and being able to effectively react to make sure that the disruption caused is minimized. This is true to an extent for all supply chains, but the difference is that next gen supply chains will have the ability to do this almost instantaneously, through the data that has been collected and modelled.
As the internet has made the world a smaller place, companies need to be able to deliver throughout the world quickly. This requires a truly global supply chain that allows companies to not only deliver, but also make sure that the global supply chain can react at a local level.
If a certain machine part made in the US is required in China, it won’t be constructive to have it sent all the way from the US to China when it is required. It could takes weeks and the potential loss of revenue to the Chinese company would be effected.
Therefore, next gen supply chains know how to create effective global hubs that can help supply products locally without needing to transport them across the world for a single order.
Next gen supply chains need to be proactive in their preparations for potential disruption. This needs to be not only through organising around issues, but identification of potential problems in advance through data modelling and thorough research. It requires a considerable amount of knowledge and preparation to arrange for these issues. It may also have a negative ROI until the worst happens and then the investments will be fully justified.
Next ten supply chains realize the importance of continuation of service regardless of conditions as their customers have come to expect a strong level of service at all times and excuses are not good enough, regardless of how valid the reason.
Making sure that the stock being held is both enough to meet demand and not excessive is important to next gen supply chains, simply because it makes warehouse management more efficient and allows for stock levels to be monitored to give the shortest possible chain to the eventual end user.
Supply always needs to meet demand and with the potential for consumer behaviour changing rapidly and the internet meaning that people can place orders at any point, stock availability needs to be monitored in real time. A company needs to know when numbers are too low or high to make sure that they are always operating at full capacity.
This does not necessarily mean that the same amount of stock needs to be placed in every distribution centre, instead it means that data should be used to recognize buying trends and local demand for particular products can inform decisions about what stock is needed and where.