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Supply chain in 2019 : 5 Trends to Get Ahead

For a long time confined in the transport and considered as a cost center, supply chain management acquired its respectability thanks to the promises of added value which it holds and wants to continue to like.

Still reserved for the big and for the medium-sized companies, supply chain management brews progressively in an increasing number of organizations. For a long time only confined to the transport and collected as a cost center, concept is apprehended better and better in its entirety. It became a steering tool of all the flows of the company, that they are physical, financial or of information. Orientated to the value creation, supply chain management distinguishes itself clearly from the logistics limited to the only physical flows. Overview of five trends which push aside a specialty in full transformation.

1. The all-out planning

Adopted in the course of 2000s by certain precursor companies, the logic of planning has reached maturity and enticed more and more worldwide groups. «In spite of an economic environment always more unpredictable, companies acquired conviction that to buy well, to produce and to deliver, it was necessary to design and to plan», explains chairman of the Logistic and supply chain section of the national Committee.

From the production line to the seller, this work of forecasts assumes that companies manage to juggle between several horizons: the very short-term to anticipate the delivery of products or services ; the medium-term to improve product lines; and the long term to program the heaviest financial investments. Thanks to a process of Sales & Operations Plannning (S&OP), or Integrated Business Planning (IBP), occuring every month, it translates the strategy of the company in a week-by-week operational plan. At Essilor, for example, this process allows the company to guarantee balance between the workload and the capacity of glass production plants.

2. The development of DDMRP method

DDMRP principles

Among the different advanced methodologies of supply chain management, DDMRP (Demand Driven Material Requirements Planning) is undoubtedly the one, currently, most trendy. Only pulled by the real customer demand, the flows of production fit from day to day to orders thanks to a system of Buffers capable of absorbing the variations in the demand and in a colour code which allows the assembly lines to prioritize their tasks. As a result: stocks decrease, while the service level and the customer satisfaction improve. « Attracted by the exceptional customer service level, the very short customer deadlines and the best capacity of innovation which this method allows to achieve, more and more companies convert to DDMRP to decrease the risk to lose market shares», asserts(affirms) Monica Monden, managing director in a major supply chain management association.

3. The emergence of RSE

Pushed by the investors and the consumers, companies try to go deeper into their Corporate Social and Environmental Responsibility, or CSR policy. An objective which the supply chain would be able to help in the future. «Besides the reduction of wastes and greenhouse gas emissions that it offers thanks to a better inventory management and to a high efficiency of transport, the traceability of products guaranteed by a mastered supply chain is able to help companies to develop their responsible purchases», says Rodolphe Lesluette. In other words, supply chain management would be able to help to detect the not very ethical subcontractor of a supplier or, on the contrary, to assess the financial impact of choosing a responsible supplier.

4. The challenges of circular and use economy

The supply chain does not escape the disruptions of economic world.

We could think that circular economy improves, thanks to its logic of recycling, the productivity of the supply chain with double-sense transportation flows and a better occupancy rate. But today, we notice that it is not the same trucks which deliver and get back goods, what could be drive to the increase of road traffic and go contrary to the environmental protection.

About the economy of use, it slowly invites itself in certain B to B strategies. Michelin, for example, proposes to its professional customers for trucks and plane tyres, to pay exactly for the use they do., This urged the manufacturer to rethink the organization of its supply chain. «At the same time, certain companies think of making customers paying only for storage space they use add Mark Gregor, of a logistics leader group. They are even able to imagine that, in a close future close, the same logic applies to the manufacturing lines».

5. The promises of the blockchain

Still in phase of test, the nesting of the blockchain in the supply chain is vector of many promises, particularly regarding traceability. These last months, Carrefour applied this technology to its chicken and tomato sectors to allow the consumer to have certain information relating to the product - origin, name of the producer or of the breeder, mode of culture or of breeding. With transparency which it generates, a system would allow to the distributor to follow the product, but also all directly accruing transactions.

Combined with "smart contracts» and with artificial intelligence, the blockchain would be able to participate in the almost complete automation of the supply chain. «According to the smart contract who connects him it with a distributor, a drink supplier would be able to increase automatically its production, when temperature exceeds 30 degrees two days in a row”, imagines the researcher. Still theoretical, such application would upset, surely, the organization of the supply chain of tomorrow.

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