Supply chain immediacy requires an overhaul of logistics infrastructures

LogisticsThe demand for faster service and the extremely rapid pace with which change is taking place will need to be addressed by all companies and many will need to completely reinvent their supply chains over the coming years to cope and to stay in business.

The current trend for businesses to offer an almost instantaneous delivery is being adopted all around the world. In some places, including Madrid, cities in Germany, and as many as 43 of the cities in China, same-day delivery is now being offered. This demand for so-called “immediacy” has taken supply chains by surprise and they are now lagging woefully behind.

Starting with a clean sheet of paper

Businesses that wish to remain competitive and retain their market share are going to have to rapidly and dramatically reinvent their supply chains. It’s probably going to have to be a case of starting with a clean sheet of paper, and with things moving and changing so fast, companies will have to ask themselves questions such as, “How do I best serve my customer today?”

The supply chains that are currently in place all around the world are in actual fact based on conditions that are in some cases are no longer valid. Trying to patch these existing supply chains up with temporary fixes is probably not going to cut the mustard. It’s almost certainly going to have to involve a total rethink.

Companies are going to need to think about modifying their supply chains and involving suppliers not only on a collaborative basis, but also adjusting the supply chain so as to integrate processes and technology that do not at this point in time exist. Many people are calling this immediacy “the Amazon effect,” and although they have certainly started it off, it is rapidly spreading worldwide.

Modified supply chains already exist

The changes that are going to be needed to bring supply chains up to speed them up are many. For example, what is termed as being “inventory velocity,” is going to have to be supercharged.

The fact of the matter is that some companies are offering immediacy now. That means that they have already modified their supply chains to cope. If their competitors don’t follow suit quickly, they will be left behind and they will sacrifice their share of the market.

Supply chains are improving in terms of technology almost on a daily basis. A fully integrated supply chain with all parties collaborating and sharing information instantaneously through The Cloud has already brought a certain amount of “self-awareness” and faster response into the mix.

Supply Chain manager need to be Change Managers too

The big problem for many businesses however, is going to be an internal one. To make immediacy happen in terms of supply chain, there are going to have to be a lot of changes, and change is something that the staff of many organizations is simply not comfortable with.

What this means is that supply chain managers are going to have to become Change Managers, or at least they are going to have to adopt the skills and approach of Change Managers in order to convince their staff not only to accept change, but to welcome and embrace it.

The need to change the logistics infrastructure

As the demand for immediacy grows, the logistics side of supply chains will be put under more and more pressure. There has been much talk about driverless trucks, and driverless truck convoys moving up and down the roads and highways. But before this can be truly even contemplated, the whole transport infrastructure in countries like the US is going to have to be seriously shaken up, and we’re not just talking about the Highways; we’re also talking about the Ports, the Railways, and the Airports too. From a private/personal point of view, what’s in place right now, in places like the US is fine. But from a business point of view, and looking at immediacy in particular; what’s in place currently would not be able to even start to cope – its seriously second rate.

Drones and 3D delivery vehicles

The problem is going to be one of getting the US administration and the administrations of other key countries around the world to relook at their investment plans. Without this, supply chains are never going to be able to fully meet the demand for immediacy.

There are some interim measures that can be taken and that are indeed already being taken. Amazon for example is seriously talking about employing drones, especially in the UK. There is even talk about the possible use of 3D delivery vehicles. But the fact of the matter is that these are temporary fixes. The main problem lies with the poor state of the logistics infrastructures in many countries including the US.

The business world must pressurize the political world

If we in  the supply chain business can see where the problem lies, and what needs to be done about it, then our businesses and trade organizations need to set about putting pressure on the administration to rethink their investment plans for our transport infrastructures. If this isn’t done, ongoing immediacy across the board is simply not going to be achievable.

In the light of further political reticence to overhaul national logistics infrastructures, what other interim measures (like the use of Delivery Drones and 3D trucks) do you think should be put in place to speed up delivery in the supply chain?

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