There will no longer be a forward chain in future supply chains. Goods more often get a second life and the return flows will increase sharply. The coming years will be dominated by the switch to an omni chain.
Omni chain model.
The model below is a representation of current and future goods flows. In many cases, certain parts are still underdeveloped, but it is expected that refurbishment and waste reprocessing in particular will play an increasingly important role. The Second life of goods is also already booming. These flows will have an undeniable impact on the classic or primary goods flow.
By distinguishing these flows and analyzing them separately, an organization can gain more insight into the volumes, destinations and thus determine the impact on its primary chain. It also offers retailers the option of lateral integration to absorb the loss in their primary flow.
Returns of goods flow.
Goods will come back to the manufacturer from both consumers and retailers [physical & webshops]. That is not only the traditional flow of rejected and / or defective products. They are also products that have passed their life cycle and whose parts can be reused. Also those products that can be resold in other markets at a reduced price.
Primary flow of goods.
The most important change in the primary or classic goods flow takes place is the increasing influence of web shops, whether or not combined with physical stores. The distribution of goods by retail will increase dynamically. The consumer expects more and more service and wants to pick up the goods at a point determined by him. From petrol station, supermarket to district boxes where couriers deliver the goods. These outlets will also be used more and more for the return flow.
Second Life goods flow.
The customer’s demand is gradually shifting. In the past the consumer only wanted the newest of the newest, nowadays more and more consumers are satisfied with 2nd hand or even 3rd hand products. The impact of the crisis is also noticeable here. There is a reset of thinking. Because until the 1970s, the reuse of goods was an accepted phenomenon. Think of clothes that were worn from child to child. This trend is clearly visible not only for clothing, but also for all kinds of technological, household and home furnishing goods. However, manufacturers and retailers are also driving this flow by marketing inferior products via outlets.
Waste flow of goods.
In this flow, more and more emphasis is being placed on splitting and reusing the raw materials that are processed in the waste. Plastics, batteries, mercury, wood, cork, cooking fat, glass, etc. Current waste processors are increasingly able to separate waste and recover individual components or devise new applications. This greatly reduces the actual landfill and incineration mountain. In this way, the separated raw materials and new applications return to the primary chain.
The greatest challenge now and in the future is to control the supply chain. With a regular forward chain, sometimes with 5-7 tiers, that is already a huge challenge. As goods get more and more destinations, extra complexity is added to the chain, which often takes place out of sight of the classic players.
An integrated data approach for the entire omni chain is hardly a feasible map. The amount of data involved and the real-time processing thereof bring so many uncertain factors into play that control is out of the question. For example, look at intelligence agencies that collect so much data that by the time they have completed their analyzes, they are actually already too late. Despite the fact that they have the most advanced systems. [anyone looking for a pin in a haystack should not make the haystack bigger]
A better approach is to consider the four different flows separately. The trends and developments per flow can serve as input for the other goods flows. This entails a certain level of uncertainty, but an overall integrated chain will also contain that uncertainty.
It is especially important for organizations to define well in advance which factors influence, how large they are and where this influence is reflected in their own chain. Within organizations a reset of thinking is necessary from striving for absolute certainty, to learning to deal with a certain degree of uncertainty.