Global Supply chains are transforming.
Shipping things around has been the defacto method of international trade. Computers, clothes, shoes, cars, shampoos, washing machines may have parts and materials sourced from all across the world. Over the last three decades, governments and most of the large 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.
But things are changing. With climate change and wild weather events, these global supply chains are increasingly at risk. 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. In such a situation, global companies are looking at new technologies that can create products out of local materials. This will mean an increased emphasis on understanding local customer needs, new materials and the creation of brands with purpose. The coming decade will be about changing the way we produce and consume things because processes currently, across sectors, are hugely wasteful.
The new decade will be about producing goods in different ways. As we get into the 5G world, machines will get smarter 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 disappear. Reverse supply chains will become an integral part of business as companies integrate into the circular economy. A new generation of customers who will demand corporate action against waste and brands that care not just for their profits but causes that create a better world.
Futurescape works with companies to create new paradigms for green supply chains.
Transparency in the supply chain
For the longest time, global supply chains have been opaque. If you want to source organic cotton, you can undoubtedly find many sellers. The problem though many buyers faced was that there was no reliable way to tell whether the cotton was organic or not. The same has been the case with almost every fibre in the textile industry. Manufacturers would ask, Is the recycled polyester, actually recycled? Is the cotton, actually Bt cotton? Is the blended fabric, indeed what the label says? Similar, questions have been asked of the food supply chain as well. How do you know that organic food is organic? How do you know that the coffee you are drinking was sourced from a particular farm? Is the coffee, ethically sourced?
These questions are increasingly becoming relevant to consumers as well who want transparency so that they can trust the brands they are purchasing. These questions are equally important to brand’s who now need to take responsibility for the entire use, reuse and recycling of the product and its packaging. As the demand for “green products” picks up, systems that build transparency into supply chains and help customers and brands prove the provenance of their products are now becoming critical to the conversation. Technologies like blockchain to determine traceability, spectrometers to assess quality and content and cloud-based applications are picking up steam.
Futurescape helps companies create new sources of value and experiences as brands build transparency and trust in their value propositions.