6 examples of supply chain innovations

The overarching challenge in the next decades will be to design supply chains that meet future economic, environmental and social requirements, in short, that are “people, planet, profit” oriented.

There are several ways in which supply chains can be innovative. These include:

1. Supply Chain Consolidation and Coordination

Improving coordination in the supply chain can help to improve sustainability. Think of reducing waste, minimizing distribution costs and energy usage lowering stock levels and even completely getting rid of stock.

Major challenges concern the design of appropriate information architecture, methods for planning and control in view of many uncertainties, and business and governance models that respect the role of individual stakeholders and define appropriate allocation and revenue sharing mechanisms.

Recent developments in smart RFID, smart sensors and mesh networks allow us to study a new class of business analytics to improve supply chains.

2. Hubs

Hubs serve as nodes in complex transport networks and have to operate efficiently to minimally disrupt transport flows. Bundling activities in hubs can increase the effectiveness of supply chain activity and reduce transport. Famous examples of hubs are airports and seaports.

Inland terminals that support all kinds of value-added activities are also important hubs in a supply chain. They increasingly support multiple modes of transport (water, rail, road, air) and all kinds of logistics activities such as handling, storage and even assembly, maintenance, returns and so on. We also see Hubs being created very close to the end market such as industrial parks or city centres.

The hub can then serve as a place where cargo flows are consolidated and too frequent ‘last mile’ transports in busy and congested regions can be prevented.

3. Corridors

Think of a corridor as an efficient route connecting two or more hubs. Using multiple modes of transport a corridor provides a fast connection and makes use of bundling to arrive at full cargo loads and high utilisation of resources.

The fact that many (often competing) operators have to make use of the same infrastructure can be addressed by the design of intelligent software systems and distributed planning systems.

4. Multi-Modal, Slow steaming and Synchro-modality

Future supply chains have to aim for minimizing energy use and reducing waste. Preventing last-minute rush road transports and reducing low resource utilisation (empty miles) is an important part of this. By increasing sharing of information and improving the exchange of information such as plans, stock levels, orders, forecasts…the use of more energy-efficient modalities such as sea lines, short sea shipping, barges, and rail transport can be promoted.

This is called multimodal transport. Slow steaming refers to the goal of using slow and sustainable infrastructure whenever possible. Synchro modal transport combines the strengths of various modalities to tailor the transport modes to the customer demand and changes in the environment.

So slow and sustainable when possible and fast express movement when really needed.

5. Urban Logistics and e-commerce

The ongoing urbanisation and the limited possibilities to re-design the physical infrastructure of cities and metropoles calls for optimal exploitation of space by smart logistics planning and control, as well as smart mobility. The rapid penetration of e-commerce has deepened the logistic problems faced and calls for radical solutions.

Internet-based systems to coordinate and combine deliveries can improve the situation. Local stores can use eCommerce to innovate their services and become product experience and pickup points. Partly products can be produced locally on demand using robotics and 3D printing.

Smart boxes in office parks can replace home delivery.

6. Service and Closed-Loop Supply Chains

Service supply chains are dedicated towards the aftermarket support process, in particular to all the logistics and maintenance needed to guarantee optimal operation of an installed base.

Remote monitoring, diagnostics and sometimes even maintenance, based on proper sensor networks, enable the shift from corrective to preventive (i.e. from unplanned to planned) maintenance. Effective services can prevent unnecessary returns and waste.

These are just some ways to innovate supply chains and make them more sustainable. Internet of things, smart sensor networks, business intelligence, information sharing, 3D printing, etc. Technologies are quickly developing that bring huge opportunities for more sustainable supply chains.