Future supply chain 2016: designing for new parameters
Are you ready for 2016? This session will focus on the future physical supply chain and the critical role collaboration will play. Discussion will centre on the changes that will need to take place, the toolkit for the future supply chain, the new integrated model and the next steps that must be taken to make it real.
Speakers: Ard Jan Vethman, Capgemini; Xavier Derycke, Carrefour; Roland Dachs, Crown Europe; Jochen Rackebrandt, Kraft Foods; Jos Visee, Philips Consumer Lifestyle. Facilitated by GCI.
2. GCI Projects Overview
• New Ways of Working Together
• Information Sharing
• The 2016 Future Supply Chain
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3. Great Team – Great Work!
• GCI has started the "Future Supply Chain" project, with
the objective to:
• Model flows of the Supply Chain representing possible alternative supply chain scenarios
• Create a Supply Chain Framework for collaboration in the 2016 Supply Chain
• On November 14 and 15:
Joint 2-day workshop in Chicago with an extended ‘Future
Supply Chain’ team
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4. Agenda
• Challenges ahead
• Need for breakthrough change !
• Integrating innovation
• Enhanced collaboration
• Next steps
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6. 1. The Future Challenge
• drivers of change
• impact on the future supply chain
This new report focuses on the future physical
supply chain and the critical role that
collaboration will play moving forward.
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7. Key trends driving the report
• Increased awareness of
CO2
• Increased urbanisation
• Regulatory restrictions
• Economics of supply
chain
• …
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8. Future Supply Chain 2016: As precised in 2008
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9. Conclusions
• True collaboration will be imperative.
• Supply chain managers will need new
capabilities.
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10. 2. The Past Does Not
Reflect The Future
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11. 2. The Past Does Not Reflect The Future
• Full Truckloads?
• Out-Of-Stocks
• Complex Infrastructure
• Energy Costs
• City Distribution
Industry must take a new approach.
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13. The 2016 Vision
• Greatly reduce lead time over
entire value chain
• Improved mechanisms to
synchronise production with
demand
• Real-time, flexible and
standardised information sharing
• Emerging home-shopping and
neighbourhood distribution
New measurements required!
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14. Set of KPI’s to evaluate potential scenarios
within the future supply chain
Overall KPI’s Sustainability KPI’s
• Availability to Consumer • Energy Consumption
• Cost reduction • CO2-emission (hothouse gasses)
• Financial KPI’s • Traffic Congestion
• ROI • Infrastructure Simplification
• GMROX (e.g. M² warehousing, total
• Return on brand equity transport distances)
• Inventory • Water consumption
Security KPI
• Traceability
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15. Why Should You Care?
Well, what if you could reduce the following by
more than 20%:
• Transport costs per pallet
• Handling costs per pallet
• Lead time
• CO2 emissions per pallet
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16. 3. A Tool Kit for an
Innovative Future
Supply Chain
17. A toolkit to explore the changes that different supply chains
can undertake to improve the complete set of KPI’s
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18. Solution Areas and Leading Practices
• In-Store Logistics
• Collaborative Physical Logistics
• Reverse Logistics
• Demand Fluctuation Management: joint
planning, execution and monitoring
• Identification and Labelling
• Efficient Assets
• Joint Scorecard and Business Plan
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19. Collaborative Physical logistics: Different combinations
of transport and locations can be optimized
• Collaboration from source
to manufacturing
Remote sourcing
• Collaboration between Local sourcing / production
different manufacturers to / production
retailers
• End to end joint transport. Distribution
• Joint transport between
retailers for the Urban final
mile Non Urban
Urban final mile
final mile
• Joint transport on the non-
urban distribution
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20. Efficient Assets will improve current
operations as well as new collaborations
• Alternative forms of energy
• Solar, fuel cells, anaerobic
digestion, tidal, wind, ...
• Efficient/aerodynamic vehicles,
• Euro V engines, streamlined
vehicles ...
• Switching modes
• Barge, train, new
infrastructure...
• Green buildings
• Reducing energy consumption
of buildings.
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21. Benefits of joint scorecards on SC
performance and on sustainability
Enter data Identify further
= Measure & Monitor improvement potential
Improved Increased adoption
Business Results (ROI) of standards
Improved Higher
Business Relationships Process Efficiency
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22. Impact of different best practices on chosen
parameters (1 example..)
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25. New Ways To Calculate The Impact On The Supply
Chain
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26. Model shows: Less cost, less CO2 emissions
Depending on the supply chain..
..basic modelling shows potential
cost & emission reductions
by more than 20%.
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27. Based on some current example supply chains we identified
the benefits of a number of major Collaboration Themes
Example Solution
SC’s areas
Collaboration themes:
-Collaborative warehousing
-Collaborative transport
-City replenishment
-POS-data/OSA-planning
-Home delivery
KPI SC costs per pallet SC cost for 90 pallets Total Truck kilometers CO2 emission for 90 pallets (tonnes) Emission per pallet (kilo)
Scenario
As Is Plant to RDC 58 5190 7500 37,5 417
Calculation
To-be Plant to RDC 46 4170 6900 34,5 383
Best
Reduction Percentage 20% 20% 8% 8% 8%
SC costs per pallet CO2 emission per pallet
models practices
420
60
415
50 410
405
40 400
SC costs per pallet 395 Emission per pallet (kilo)
30 390
385
20
380
10 375
370
0 365
1 2 1 2
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28. 4. A New Model for
Enhanced Supply
Chain Collaboration
29. 4 Collaboration Concepts
• Information sharing – driving the collaborative
supply chain
• Collaborative warehousing
• Collaborative city distribution, including home
delivery and pick-up
• Collaborative non-urban distribution, including
home delivery and pick-up
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30. Characteristics Of The Future Supply Chain 2016
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31. 1. Information Sharing
• Sharing of standardised data (based on the use of
GS1 keys and transaction message standards) is the
cornerstone
• Master data relating to locations such as node location
and lead time between nodes
• POS sales data, Internet shopping sales data and
other mobile-sourced shopping data, must be shared
in a standard and timely manner
• Events in the supply chain, such as new product
launches and promotions.
• Timely information on out-of-stock (OSA)
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32. 2. Collaborative Warehousing
• Revolutionary: Concepts that go far beyond the warehouse
collaborations that exist today
• combined shipments to distribute to one or more retailers
covering different modes of transport ownership, formats and
channels
• repositioning of warehouses is likely to be required to improve the
new supply chain KPI’s
• Collaborative warehousing should improve
• Improve several KPI’s:
• Capacity utilisation of the total warehouse
• Transport optimisation through shared delivery from the
warehouse
• CO2 and energy reduction through the use of the latest
technologies (such as energy-efficient buildings and fuel-
efficient trucks)
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33. 3. Collaborative City Distribution
• Urban areas: limit the amount of (polluting)
trucks going into the city.
• “city hubs” with a collaborative cross-dock
operation.
• Solution applied differently per shipment
category:
• Full truckloads for store replenishment
• Less-than-full truckloads for smaller-store
replenishment
• Parcels, including home delivery needs
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34. 4. Collaborative Non-Urban Distribution
• as with city distribution, key will be
consolidation of delivery streams in short term:
• different products
• based on different orders from different online
ordering facilities,
• all for the same shopper
• via consolidation centres (multi picks, pooling)
• Convergence between home shopping and
neighbourhood distribution via pick-up points
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35. How to prepare our people for the new world of
collaboration
• Incentives and Measures
• Capabilities
• Organisational Resources and design
Benefits of an integrated model
• To illustrate how this could work, the different
calculation models have been combined into one
integrated model.
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36. As Is Situation: The Future Supply Chain 2016
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37. To-Be Situation: The Future Supply Chain 2016
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38. 5. Next Steps Toward
The Future Supply
Chain
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40. Call To Action
GCI Project Team will be established:
• Support the Report Marketing Plan
• Set up Implementation Issues Exchange Team
• Identify established pilots
• Liaise with other associations, e.g. ECR Europe to
help resolve implementation issues
• Measuring the progress of implementation
through, e.g. the Global Scorecard.
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