The New Frontier of Supply Chain
The on-demand economy is playing a significant role in disrupting supply chain management – and will continue to play a disruptive role.
This was the key take-out from a presentation by futurist and trends analyst, Dion Chang, founder of Flux Trends at a recent Business Day Dialogue held in association with the IMM Graduate School in Johannesburg.
Digitisation, said Chang, has had a ripple effect on business, in many instances collapsing the traditional value chain. Banking, insurance, travel, automotive, logistics and delivery sectors are just some of the industries facing significant disruption. Digitalisation has spawned a host of new economies including the sharing economy, the gig economy and the on-demand economy, all of which are impacting the supply chain. The on-demand economy, in particular, he said, is impacting the supply chain given that customers want it directly, simply and quickly. Innovative brands are using this to their advantage: food delivery service, Deliveroo, are converting containers into kitchens and producing their own restaurant quality food in an effort to own more of the supply chain; geotag delivery service, Wum.Drop is capitalising on the demand for direct delivery to consumers on the go; and Pep is not only offering insurance products but also courier services through Pep’s Paxi Service.
Chang pointed out that we’ve already moved away from a digital age to a networking age. The blind spots – and opportunities – for the future of supply chain management include cross industry pivots (a Japanese electronics company has pivoted into agriculture, for example); transient ownership trends (a trend which is already starting to impact retailers); and climate change and sustainability issues, amongst many others. “The question is not whether we are able to change, but how fast we can change. If you don’t think proactively, you will increasingly find yourself reacting to your environment, rather than influencing it,” he said.
A panel discussion, moderated by Dominic Gaobepe, focused on the new frontier of supply chain management. Head of Logistics at Investec, Penny Henley, pointed out that the companies won’t be competing on products in the future but on their supply chains. She said it’s imperative that supply chain specialists keep learning and remain in touch with what’s happening in the industry because it’s evolving so quickly.
Nick Hoffman, COO of Linebooker, and online transport platform which creates a digital connection between customers and transporters, said the company was making transacting in the freight business much easier. “Supply chains have traditionally been very complex. There is a big drive to bring transparency back in to the industry which is not only exciting, but provides opportunities for both big business and SMEs.”
Transparency needs to add value with information being triangulated from all multiple sources to ensure accuracy, added head of business development for Africa at WiseTech Global, Nachi Mendelow. WiseTech Global is an innovative developer of cloud-based software solutions for the international and domestic logistics industries.
Effective supply chain managers of the future need to have a comprehensive understanding of logistics activities and how they all link together, said Dr Myles Wakeham from the IMM Graduate School. In addition to understanding the supply chain, they need to have a thorough understanding of all areas of business. Customers want good service, quickly and at the lowest price, he said, adding that risk management and risk complexity are increasingly becoming part of the equation.
The IMM Graduate School offers a BCom degree in International Supply Chain Management – for more information visit www.imm.ac.za