Hermann Haupt | Vice President | CHEP Sub-Saharan Africa | mail me |
This tumultuous year has placed incredible pressure on people, on relationships and on the global economy. However, one component of the economy has proven its resilience throughout the pandemic and the lockdown: global supply chains.
While not without some challenges, the logistics and supply-chains sector has been able to get goods from growers and manufacturers to retailers across countries and across the planet. This vibrant sector has emerged into a vastly changed social environment in greater demand than ever.
However, having done so, it is now presented with a set of challenges and opportunities. There are the trends that will shape the next era of global supply chains.
Agility
The lockdown has affected the cadence of supply and delivery relationships. Some industries have stopped entirely; others have surged. Some have moved into e-commerce; another group has found solutions in new B2C models.
There is no doubt that customers are looking at smaller stock holding and faster cycles, being more agile to mitigate risks. We have seen customers reducing SKUs (numbers of different pack sizes) in order to address stock and it is a focus point and a trend.
Agility is key for businesses to quickly change tack, alter processes, reduce or expand production volumes or branch out into new business models and supply chains etc.
Key to the agility challenge is aligning costs with revenue. When lockdowns were imposed, many businesses found themselves without income.
While this is a setback, organisations are better able to survive if they are able to minimise their cost base while not earning. An agile approach allows an operator to reduce costs when revenue and income decline.
Data and information
In future, there will be huge demand for processes, skills and products that can provide real-time data. Without real time data one cannot be responsive to react to volatile market situations and it will reduce agility.
It’s been extremely exciting to be part of some digital deployments and trials in different part of the world. We’ve learnt a lot so far – we’re embracing every challenge and pivoting where necessary, because the journey is helping us to build our digital capability, building a solution for improving asset productivity through track and trace and new advanced analytics for example.
This in turn will help us to understand the challenges within our supply chains and implement appropriate plans to drive tangible improvement.
Building up these insights and understanding trends undoubtedly takes time but we are already making plans to make changes based on our insights to date.
Besides, blockchain, Internet of Things (IoT) and Artificial Intelligence (AI) have all come to global prominence over the past five years in the supply-chain and retail space.
Illuminating the supply chain
Today, technology helps clients understand where they might be losing product due to non-approved flows, and where there may be bottlenecks in the supply chain that are hampering efficiency.
For supply-chain companies, IoT helps them understand at a glance how many days a pallet is on hire for, where and how it may suffer damage, and how our customers are using our pallets. This, then, allows us to make changes to our own circular, share-and-reuse model of platform pooling to effect savings and efficiencies.
Instore retail platforms can also use technology to inform retailers when product is running low, to ensure it is restocked timeously – again, to build efficiency on the customer-facing side.
Less, more often
A function of the need for agility is that retailers now demand smaller-volume deliveries, more frequently. Where before we might deliver on a 1000×1200, pallet, we are now being asked to use half-size or quarter pallets.
We are also being asked to provide solutions that move from distribution centre to store, without the need for repacking.
The COVID-19 period has also seen more dynamic activity, more retail promotions, and an aversion to overstocking, in some cases.
These more complex trends require technology to facilitate, in order to improve the customer experience and drive efficiencies.
Where digital processes help manage and control the overall supply chain process, you can also avoid unnecessary human contact, improve sustainability and optimise logistics infrastructure.
Automation
There is a discernible move towards automating processes in manufacturing and logistics. In the supply-chain sector, adopting automated technologies also means adapting to the tolerances of our customers’ automated methods.
For instance, the use of robotics has now reached most of our service centres, with the goal of consistently ensuring the best possible processes and the highest standards of performance and compliance.
Through an automated operation, pallets are inspected for defects, damage or contamination, always meeting the highest quality standards, while improving the working conditions for service-centre employees, for instance through improved safety and ergonomics.
Sustainability
Today, all organisations have sustainability goals. We’re all looking to reduce carbon footprint, to invest in new energy sources, and to build sustainable business models.
We are each at different stages of the sustainability journey, but this is no time for points-scoring. We should share insights and learnings from our sustainability approaches.
We offer all our partners the benefit of our share-and-reuse pallet pooling model, which ensures no one-way disposable pallets are used and all platforms are returned to our circular ecosystem as efficiently as possible.
We are constantly refining our own sustainability strategy, and recently unveiled our 2025 sustainability goals, leveraging our circular business model and pioneering regenerative supply chains for our customers.
The goal is to restore, replenish and create more value for society and the environment than the business takes out.
