5 megatrends to transform supply chains

SupplyChain

Supply chain strategies are being readapted continuously to new realities. Five megatrends have been identified by the PwC that are emerging and will continue to shape the business landscape over the coming decades, each influencing the way in which organisations will set up and run their supply chains:

  1. Shift in global economic power: By 2030, the size of the seven leading emerging economies will overtake that of the current seven largest economies.
  2. Demographic and social change: By 2025, the world’s population will have risen by 1bn, taking the total to 8bn.
  3. Technological breakthroughs: Around 80% of chief executives class technology as one of the top three trends that will transform their business over the next five years.
  4. Climate change and resource scarcity: As the world becomes more populous, urbanised and prosperous, demand for energy, food and water will rise. An increase of 35% is expected in global food demand by 2030.
  5. Rapid urbanisation: The global urban population is growing by 1.5m people every week and by 2025 it is expected that there will be 37 megacities, up from 23 in 2015.

PwC believes supply chain sector is likely to respond in a number of ways to these trends:

  • Greater self-sufficiency

The continued rise of megacities means it won’t make economic sense to transport certain goods over long distances. Supply chains will be developed more locally and higher pressure will be put on sustainability, especially reduction of CO2.

  • More collaboration

The continuous shift in increased economic purchasing power towards new geographies and markets means organisations will move away from the traditional model of having their own costly manufacturing footprint in local markets. Instead, the focus will be on collaborating with value-chain partners, making use of virtual manufacturing and plug-and-play factories.

  • Predictive analytics

Combining the house data available together with open and unstructured data such as weather reports, social media output and home appliances will enable to draw meaningful patterns in consumer behaviour. Examples include data analysis to predict a sudden surge in parcel orders, determine stock levels, sorting centre capacity issues and others.

  • Fluid and responsive

Due to global variations of consumer purchasing power levels, large organisations are likely to require many supply chains: one, for example, for producing ultra-customised products meeting individual needs, while another for generic items focusing on speed and value.

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Source: PwC, raconteur.net