Tuesday 29th Sep 2020 - Logistics & Supply Chain

Rethinking the unthinkable

Listening to a discussion about the pros and cons of nuclear power on Radio 4”s Today programme recently, a comment by one of the experts involved roused me from my breakfast slumber.

New nuclear power stations, he agreed with the combatant green anti-nuclear studio guest, would be unlikely to make much contribution to the national grid until 2020 but by then, he said, our demand for electricity will be much higher as a large proportion of the transport infrastructure – trains, cars, trucks etc – will be run on electricity.

Interest in electric cars and local delivery trucks is increasing. It”s over a year since Westminster implemented its first street charging points and last year, EDF Energy announced plans for 250 charging points to be installed in Sheffield and parts of London by March this year.

As a result of the growing infrastructure, around €1.6bn worth of electric cars are expected to be sold in London this year, according to some green analysts. It”s a chicken and egg game – put in the charging points and you encourage people to go electric, but the initial installation requires a considerable act of faith.

So why aren”t we seeing more plans for recharging points? And why did London Transport scrap the trolley buses of my youth?

Some 20 years ago – long before the current preoccupation with climate change – environmentalists argued the need for alternative fuel sources as oil was running out. The commodity was too precious to burn and we needed to look at alternatives to petrol and diesel to power our transport infrastructure. Oil is still running out, although the current high price might persuade oil companies that previously ignored fields might be worth attention.

Typical distances for electric vehicles on a single charge may now be around 100 miles with speeds of up to 50mph, but battery technology is improving all the time. Today”s electric cars and delivery vehicles may still be confined to urban areas but if the Today programme”s expert is to be believed, we may well see charging points at motorway service stations in the next decade.

So the electric alternative has been mooted since the 1980s but a national infrastructure is still years away – and it”s the same with e-commerce.

Back in 1993 at the birth of online retailing, there was much talk of digital delivery and the end of the high street.

As last Christmas” retail sales figures demonstrated, growth on the high street is static or declining while online sales are still showing double-digit increases. Retail chief executives, perhaps a little late in the day, are realising that they need to develop integrated multi-channel operations, and that requires investment.

A few years back I recall a prominent retail IT director telling me he would never go to his board to seek funding for infrastructure. He said his fellow directors” eyes would glaze over in incomprehension. Like electric charging points, building an infrastructure for new forms of digital trading – or creating a digital supply chain – takes time and until recently has been an act of faith.

Today”s consumers, especially the so-called ”Generation Y” – 15 to 25 year olds, born in the digital age – take e-commerce for granted. They expect rapid response and goods or services to be delivered when and where they want them. The most important part of a multi-channel strategy in some areas will be managing the decline of the store And you can”t do that with legacy IT and poorly integrated systems.

Planning for the digital age also means taking some hard decisions, as Tony Stockil, chief executive of IT consultant Javelin Group puts it, ”The most important part of a multi-channel strategy in some product sectors will be managing the decline of the store.”

Back in the 1990s, Andersen Consulting ran a Smart Store demonstration suite at Windsor where futuristic ideas included supermarkets which, rather like Argos, had token displays with everything ordered electronically either for delivery to the home or to the car, picked and packed into a boot-shaped box by back office warehouse staff while Mrs Customer enjoyed a coffee. Wild in 1990, perhaps, but in 2010?

As the oil price soars and shoppers opt to buy electronically, it is time for supply chain managers to start thinking the unthinkable.

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