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Factors affecting supply chains of the future

Factors effecting supply chains of the future

July 20th, 1969 – Fifty years ago man first walked on the moon. Not only was this an exceptional achievement, but it also portrayed the limits mankind could push. Since then, the world has seen many more Godly feats, but some would argue it was one of the events 50 years ago that triggered a new wave of achievements.

The world of supply chain is no exception. The last 50 years have seen some defining moments that have changed the way we operate supply chains. From becoming increasingly global and complex to pursuing innovation at every link in the chain, one would think the world has seen it all.

From growth of containerisation to use of universal product codes, from mainstream use of EDI and ERP, to the Amazon revolution; supply chains have come a long way. But just like space expeditions, they are also searching for their next “Mars” to land upon.

Space Expeditions and Supply Chains

There is more similarity between transforming supply chains and exploring space than one would think. For starters, both are driven by competition. Be it to win a space race or to stay relevant in a constantly changing marketplace, competition has played an important role in pushing the change agenda.

Then there is the multitude of players coming together to make change happen. Just like successful space programmes are a result of collaborative work of Suppliers, Engineers, Technologists, Government bodies and Astronauts; successful transformation programmes require collaborative working across suppliers, customers and various internal functions to come together and deliver against a common vision.

And finally, the role of technology and how it is utilised plays an important role in success of both programmes. It is important to understand the suitability and limitation of technology used and design a robust tech architecture to enable change.

Future Supply Chains

From our experience at 4C Associates in the market, we see four key factors in shaping the future supply chains.

Customer driven supply chains – Gone are the days when companies could afford to produce whatever they wanted and push through their supply chains. Forecasting, demand planning and the emerging role of customer in product development and supply chain planning is becoming increasingly important. With rapidly changing customer expectations, the role of customer in the chain has never been more exciting.

Labour shortage in developed markets – Decreasing population growth, changing demography of working population and shortage of focused training have all had effects on the availability of labour force, especially in the developed markets. This coupled with a constantly changing nature of supply chain operations and technology has made labour shortage an important factor for the future supply chain.

Automation and Digital Revolution – Automation is now not only confined to machines, robotics and product flow, but is increasingly being used for optimising information. May it be back office operations like accounting or specific supply chain use cases in order to cash process or even demand planning; automation has a very important role to play in future supply chains. With the multitude of data being collected these days, the possibilities are immense.

Circular economy – There is an increasing focus on the Cradle to Grave supply chains, with firms increasingly seen responsible for managing the full lifecycle of their products. This is increasing a focus on reusability and recyclability, driving a circular economy in future supply chains.

On the eve of moon landings, JFK famously said – “And those who look only to the past or present are certain to miss the future.” It will not be out of context if the same was said about the advancements in supply chain today. Supply Chains are indeed changing every moment, and the centre of all these changes are competition, collaboration and technology.

So how do you see your supply chains changing?

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