Supply Chain Blog

FMCG/Pharma IT: The Supply Chain of the Future?

Posted by Dave Jordan on Thu, May 23, 2013

Do you agree that Supply Chains seem to evolve very, very slowly? I cannot recall any major ground-breaking innovation in recent times. Yes, we have had bar-coding, RFID and S&OP etc but nothing that sticks out as significant or a major leap forward. Is there a revolution around the corner? Will Producers continue to make small incremental steps or will someone take the industry by the scruff of the neck and drag Supply Chain kicking and screaming into a brave new world.

I have dusted off my crystal ball and after a bit of gazing I saw a version of the future through the swirling mist.

Consumers

Rightly, consumers drive the largest change by buying exclusively on line as premium pricing applies to shopping in stores. Petrol will cost around 25 Euros per litre so driving will be prohibitive any way.

Advance consumer purchase demand accumulated by “Cloud IKAs” and automatically fed to brand owners SC IT.

Manufacturing

Today’s big name Multi-National Companies (MNC’s) will not own manufacturing assets. Products will be produced by versatile 3rd party factories in an automated supply support network.

Few people involved in the entire process and that sadly for those currently working in Supply Chains, is a recurring theme.

Factories will have seamless automated supply of RM/PM to mixers and machines without man handling. Not a “just in time” approach but “right on time” on each at each and every stage of the process.

Automated changeovers will maximise asset utlisation and output efficiency leading to lower and controlled product costing.

Late post dosing/late differentiation will be perfected to further streamline manufacturing  and provide supply agility.

Where no quarantine is required there will not be any intermediate factory storage of finished goods as produce to order is in place.

Planning

No people. Repeat, no people involved. Simply, SC IT analysing, collecting and accumulating consumer driven demand signals and allocating supply requirements on the manufacturing network.

Supply Chain Future ImprovementsDeliver

High quality “Super 4PLPs” will deliver around the clock to retailer picking platforms and not necessarily to stores.

Some PLPs will offer order assembly to cut out a stage and deliver directly to consumer’s homes or workplaces.

Fuel and time efficiency will be gained from having trucks filled with goods from all suppliers and products from compatible industries. (Always puzzled me this one. Producers keep goods apart apparently as long as possible yet you get Knorr mixed with Signal and Lipton next to meat in the back of store warehouse, shopping baskets and in the car. Although some items like tea will indeed soak up flavours and fragrances I think producers are far too cautious.)

Route To Market (RTM)

In Developing & Emerging (D&E) markets D&E the Traditional Trade (TT) will still exist as the prime method of getting products in front of consumers. In TT there will be a small number of distributors per country or region acting solely as 3PLPs and moving competing products.

Increasingly, the key players in your Supply Chain will be found in your IT department!

As the mist slowly clears once again I stop playing Nostradamus and put the crystal ball back in its box.

Image courtesy of Salvatore Vuono at freedigitalphotos.net

Tagss: FMCG, Route to Market, Dave Jordan, Performance Improvement, Manufacturing Footprint, Forecasting & Demand Planning