But things are changing. A new generation of customers is demanding corporate action against waste and brands that care not just for their profits but causes that create a better world.
Over the last three decades, governments and most prominent global companies have focused on building efficient supply chains. These economies and businesses function on zero-stock, just-in-time supply-chain models. This format has worked by outsourcing manufacturing to cheaper countries, eliminating needless stocks, warehousing space and making manufacturers responsible for almost everything.
The need of the hour is to create reverse supply chains which take back products for recycling and upcycling. These business models will become an integral part of business as companies integrate into the circular economy.
The emissions from logistics and transportation are perhaps the biggest culprits in our high carbon economy. The top five in the Global Risk Report, released at Davos, are environmental risks. Global companies are looking at new technologies that can create products out of local materials in such a situation. This will mean an increased emphasis on understanding local customer needs, new materials, and building brands with purpose.
Extended consumer responsibility
The new decade will be about producing goods in different ways. As we get into the 5G world, machines will get more competent and quicker. Machine learning will be able to anticipate, create and deliver products based on demand. New products that can upgrade via software may mean that the source of value by putting in natural obsolescence may reduce. This implies that companies will be responsible for their products for much longer. The use and throw culture with minimal service requirements will invariably give way to use, reuse, upcycle and recycle.
The customer experience needs to be just right! The customer journey for manufacturing companies adds more elements to the updated business model.