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“We can't solve problems by using the same kind of thinking we used when we created them.” Commonly attributed to Albert Einstein

Future Supply Chain 2016 Serving Consumers in a Sustainable Way

FUTURE SUPPLY CHAIN


Future Supply Chain 2016 Overview

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT


Background on Study „ The Global Commerce Initiative (GCI) began the

“Future Supply Chain” as a follow-up project to the “2016: The Future Value Chain” report, published by GCI, Capgemini and Intel „ The earlier Future Value Chain project was

important for the industry: • Addresses key challenge: Will the industry invent its future, or have it dictated by forces and trends upon which it has chosen not to act? • Collaboration among all parties in the value chain will be essential to better serve the needs of the consumer • Provides a model for the future and identifies opportunities for growth and business improvement

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

© 2008 Capgemini. All rights reserved


The Objective Was to Design a Future Supply Chain Against New Parameters „ Workshops in Utrecht

(NL) and Chicago (US) „ Participants:

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

© 2008 Capgemini. All rights reserved


First Step: Understand the Drivers of Change

New New markets markets andand a new a new economic economic balance balance

Drivingthe valuechain Driving the value chain

Sustainability and the scarcity of natural resources

Economic Economic Ecological Ecological ConsumerBehaviour

Consumer Behaviour

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True collaboration will be imperative

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Regulatory Regulatory

-Re-designing supply chains Redesigning supply chains

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Managing complexity through transparency

New rules, new compliancy

Demographic Demographic

Graying Grayingand and urbanisation

Explosion of information Explosion of information

New NewTechnologies Technologies

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

Š 2008 Capgemini. All rights reserved


There is a Need for Breakthrough Change as the Past Does Not Reflect the Future

EU renewable energy policy

OOS in France (ECR)

CAFE Standards: Higher Gas Mileage Standards Will Save Fuel

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New KPIs Address Current and Future Sustainability Issues + On-Shelf Availability and Costs Current KPIs

Sustainability KPIs

ƒ Availability to consumer (% in-stock) ƒ Cost reduction ƒ Financial KPIs

ƒ ƒ ƒ ƒ ƒ ƒ

• ROI • Gross Margin Return on “X” (GMROX) • Return on brand equity • Inventory

Energy consumption CO2 emissions (greenhouse gases) Traffic congestion Water consumption Security compliance Infrastructure simplification

ƒ Traceability

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“We can't solve problems by using the same kind of thinking we used when we created them.” Commonly attributed to Albert Einstein

Future Supply Chain 2016 A Toolkit for an Innovative Future Supply Chain

FUTURE SUPPLY CHAIN


Innovation Can Be Realised With Help From a Toolkit Addressing the KPIs Components of the toolkit ƒ Solution areas • The solution areas address existing problems and those anticipated for the coming decade

ƒ Leading-edge practices • Examples of existing leading practices are integrated into the model to show how they help address the solutions areas

ƒ Application to example supply chains • Simplified supply chains are used to demonstrate how the model works

ƒ New ways to calculate the impact on the supply chain • These include both macro-level and micro calculation models

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© 2008 Capgemini. All rights reserved 9


Solution Areas Focus on Physical Supply Chain Innovation 1. In-Store Logistics • Includes in-store visibility, shelf-ready products, shopper interaction

2. Collaborative Physical Logistics • Shared transport, shared warehouse, shared infrastructure

3. Reverse Logistics • Product recycling, packaging recycling, returnable assets

4. Demand Fluctuation Management • Joint planning, execution and monitoring

5. Identification and Labelling 6. Efficient Assets • Alternative forms of energy, efficient/aerodynamic vehicles, switching modes, green buildings

7. Joint Scorecard and Business Plan

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

© 2008 Capgemini. All rights reserved


We Assessed the Impact on Example Supply Chains

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

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How Will the New Parameters Influence the Bottom Line?

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

© 2008 Capgemini. All rights reserved


“We can't solve problems by using the same kind of thinking we used when we created them.” Commonly attributed to Albert Einstein

Future Supply Chain 2016 A New Model for Enhanced Supply Chain Collaboration

FUTURE SUPPLY CHAIN


A Future Model Is Designed

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

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Information Sharing Will Drive the Collaborative Supply Chain

„

Sharing of standardised (master) data will be the cornerstone • • • •

Production identification Attributes Classificaiton Information Master data related to locations

„

Demand-signal data, data on item location, quantity and status must be shared in a standard and timely manner

„

Free flow of data and associated information to manage events

Impact on KPIs • Especially availability to consumer • Affects all other current KPIs

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© 2008 Capgemini. All rights reserved 15


Collaborative Warehouses Are a Crucial Enabler for Realising Integrated Sustainability Improvements

„

Both retailers and manufacturers must be part of the concept „ Store picking will be done from the shared warehouse „ A repositioning of warehouses will likely be required to shorten the chain and increase flexibility in allocating inventory to demand „ Standardisation of data is critical Impact on KPIs • Capacity utilisation of the total warehouse • Transport optimisation • CO2 and energy reduction

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© 2008 Capgemini. All rights reserved 16


Collaborative City Distribution Will Limit the Amount of Trucks Going Into the City

„

Merging different streams that go into the city onto one infrastructure „ Key element will be so-called “city hubs” with a collaborative cross-dock operation „ The concept includes the consolidation of the different delivery streams for home delivery, pick-up points and drop-off boxes Impact on KPIs • Traffic congestion • CO2 emissions and energy reduction • Infrastructure simplification

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© 2008 Capgemini. All rights reserved 17


For Collaborative Non-Urban Distribution, Transport Optimisation is the Main Objective

„

A regional consolidation centre can have a similar function as the city hub but is also needed to merge the longdistance streams with the local product streams „ In contrast with the city hub there could also be some warehouse function „ Parcels and home-delivery models should be considered in conjunction with the store replenishment models Impact on KPIs • CO2 emissions and energy reduction • Infrastructure simplification

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© 2008 Capgemini. All rights reserved 18


Combining the Concepts Shows How the Models Reinforce Each Other and Create a Synergetic Effect

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Potential Benefits Are Significant

An example run indicates that all KPIs for transport costs, handling costs, total truck kilometres, emissions and lead time could be improved substantially in this integrated model

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

Š 2008 Capgemini. All rights reserved


The Concepts Won’t be Realised Without New Ways of Working Together

Incentives and measures Retailers

Capabilities Logistics service providers

Manufacturers and suppliers

Consumers and shoppers

Organisational resources and design Regulators

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© 2008 Capgemini. All rights reserved 21


Designing the 2016 Physical Supply Chain

“We can’t solve problems by using the same kind of thinking we used when we created them.” — Commonly attributed to Albert Einstein

For more information on “Future Supply Chain 2016”… ƒ www.futuresupplychain.com (launching 27 May 2008) ƒ www.gci-net.org ƒ www.capgemini.com

FUTURE SUPPLY CHAIN 2016_EXTERNAL DISCUSSION DECK_FINAL.PPT

© 2008 Capgemini. All rights reserved


www.gci-net.org www.capgemini.com

GCI Future Supply Chain 2016 I  

GCI Future Supply Chain 2016 I

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