Supply chain for millennials

A Supply Chain horizon for Millennials

Past week, talking about the future of SCM with some colleagues from the industry, it came to my mind an article published by Supply Chain 24/7 in 2013 with the title: “10 Supply Chain Trends for the next 10 years”:

  1. Service chains will become more important than product chains.
  2. Companies will need to fully report corporate externalities.
  3. Supply chains must be designed to serve the “base of the pyramid”.
  4. Knowledge work and workers will become global in nature.
  5. SCM will have a standard certification process similar to that for CPAs.
  6. Product clock-speeds will determine the number and nature of the supply chains.
  7. Micro segmentation will be key to success.
  8. Technology to support SCM will primarly be “on tap”.
  9. Leaders will leverage social media in a closed loop feedback process.
  10. Artificial intelligence will be embedded in mainstream supply chain activities.

In the equator of the 10 years horizon we can see with retrospective that most of the trends are already facts, but by 2013 the Millennial generation was still in the puberty.

Nowadays we know that by 2020 Millennials, the future customer that will change the consuming of goods and services dramatically, will represent the 40% of the world working population.

What changes will introduce this in the global demand of goods, and how supply chains and stakeholders will have to evolve are perhaps two unresolved questions in the sector yet.

But by this newly 2018, Millennial is a better profiled generation:

  1. Millennials grew up in the digital experience.
  2. They are astute consumers.
  3. They will expect companies to know their individual needs.
  4. They will expect companies to personalize all experiences.
  5. Their consuming habit will shrink the product lifecycle a 50% by 2020 (from 2000 to 2010 product lifecycles experienced already a 50% down).

Service chains will be as important, if not more important, than the product chain.

Less lifecycle means a more regular product/service replacement.

Consequently, companies will be forced to streamline reverse logistics, and supply chain processes will depend more than ever on track inventory and shipments through the use of Trade Management Systems and a constant monitoring of their KPIs.

But a second important consideration is about Globalization. As businesses landscapes become more and more global, suppliers and competitors keep continuing expanding operations across the world.

In only 2 years, thanks to the modern transportation management, logistics capabilities and savvy IT systems, 60% of companies expect to source from more countries than they did in 2017 and in the same period 80% of manufacturers expect to have multi-country operations.

A recent intelligence published by ITV Corporation concludes that new scenario will require a new change of approach in many aspects, as a brooch to this post, here you have their very valuable conclusions:

  • Be aware about any opportunity for new optimizations as it may pop up, because optimization will bring reliable decision support for supply chain challenges such as network design, route mapping and load building.
  • When in doubt, simulate! Simulations will provide value by showing how solutions will play out in the real world.
  • Go for carrier quality.
  • Invest in 20/20 visibility.
  • Inspect product for exceptions before they reach the logistics phase from production phase.
  • Use damage claims as a source of insight to learn and lead to better performance.
  • Invest in modern IT systems to help your company to collect and analyze data -including mode, carrier and location- of exceptions.

Inspired in the article published by ITL Corporation: https://www.itlvn.com/news/333-hieu-suat-chuoi-cung-ung-vao-nam-2020.html

About ITL Corporation: Indo Trans Logistics Corporation™ is positioned as the premier regional solutions provider for Integrated Logistics, Aviation Services, Warehousing, Freight Management and Distribution in South East Asia, being listed for more than 10 consecutive years (2007-2017) as one VNR 500 enterprise – Top 500 Vietnam’s largest enterprises following the same selection criteria as FORBE’s FORTUNE 500.

https://www.itlvn.com