The Supply Chain of the Future

Source: Consumer Goods Forum

At last week’s conference of the Council of Supply Chain Management Professionals, John Phillips, Senior Vice President, Customer Supply Chain and Logistics for PepsiCo, presented findings from Building Strategies for the New Decade – Future Value Chain 2020.  The report is definitely worth a look and to whet your appetite and stimulate your thinking, I have summarized the twelve root trends below (supporting stats are sourced in the Report):

Increased Urbanization – By 2050, roughly 70% of the world’s population will live in urban centers.

Aging Population – Consumers 50 and older may soon represent the majority of the voting public.

Increasing Spread of Wealth – The population in low- and middle-income countries with purchasing power parity (PPP) is expected to triple by 2030.

Increased Impact of Consumer Technology Adoption – By 2013, more than 2 billion mobile users globally will have made a purchase via their handsets.

Increase in Consumer Service Demands – Over the next decade, the online channel will grow to 25% to 30% of total retail sales, up from the current 4% to 15%.

Increased Importance of Health and Wellbeing – In the U.S., for example, the “Lifestyles of Health and Sustainability” market is estimated to comprise approximately 19% of the adult population, representing a market of 41 million consumers.

Growing Consumer Concern about Sustainability – According to the Natural Marketing Institute (NMI), the green marketplace in the U.S. is predicted to grow from $420 billion in 2010 to $845 billion by 2015.

Shifting of Economic Power – China will overtake the U.S. to become the world’s largest economy as early as 2017.  And by 2012, India will have overtaken Japan.

Scarcity of Natural Resources – By 2030, the world’s population will reach 8.3 billion, with the demand for food and energy increasing by 50% and for fresh water by 30%.

Increase in Regulatory Pressure – Over the next decade regulatory pressure is expected to increase.

Rapid Adoption of Supply Chain Technology Capabilities – In the coming decade, improved collaboration together with new supply chain/logistics technologies and information transparency will enable a more synchronized value network with greater visibility and traceability.

Impact of Next Generation Information Technologies – Information technology will no longer be just an indispensable support function, but an expansion of the organization’s intelligence, a universal connector, the way to become adaptive.

This list brings up two questions:

1)      Are you seeing any of these trends today?

2)      What are you doing within your value network to capitalize on these trends – that’s right – capitalize on them, not just mitigate their effects.

With all this talk of trends and change, I will leave you with my favorite quote on change.  It was Leo Tolstoy who said, “Everybody thinks of changing humanity, and nobody things of changing himself.

Have a wonderful weekend!

About Arnold Mark Wells
Industry, software, and consulting background. I help companies do the things about which I write. If you think it might make sense to explore one of these topics for your organization, I would be delighted to hear from you. I am currently employed by Incorta, but I am solely responsible for the content in Supply Chain Action.

One Response to The Supply Chain of the Future

  1. Good post! I believe mostly macroeconomics and geographical politics will shape the trends. This is what I wrote 3 years ago in my blog and I still think it is valid.

    The only way to really address or mitigate effects of these macroeconomics impacts is effectively is to have great relations in the value chain and therefore supply chain relationships is the thing to address in supply chain


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