Thursday 15th Aug 2019 - Logistics & Supply Chain

Back to the future

The futurists of the 1990s loved ideas like the intelligent fridge or thinking waste-bin in our digital age perhaps it is time to revisit these concepts which might just transform logistics.

Presentations and workshops may be the key attraction at many conferences, but it is often the unexpected conversations over coffee or lunch that prove the most memorable.

Extended Supply Chain in April certainly had its high points, but for me one of the more memorable events was chatting to Sergio Barbarino who has the prosaic job title of “principal engineer” at Procter and Gamble’s Supply Network Innovation Centre in Belgium. With a forward-looking brief, Barbarino has thought through not just the environmental and logistics issues of home delivery, but also changing consumer attitudes and the role of brands. In future, he argues, why shouldn’t local delivery become a utility much like our gas, water and electricity, where consumers can contract with a single provider for all their needs? Rather than have a succession of delivery drivers calling at our doors why not have one van which comes at a pre-set time and will delivery our groceries, internet purchases, pet food, washing powder or whatever? And why not “contract” with our other regular suppliers to provide what we need via this local delivery operator on an annual basis?

Transformed

My dog eats on average 10.5 tins of dog food a week so why not arrange to have 21 assorted tins delivered every other Wednesday throughout the year? The household generally uses two lavatory rolls a week so why not have 26 dropped at the door every three months? With sufficient such regular orders, manufacturers’ production planning and scheduling would be transformed along with better cost management and targeted promotional incentives for consumers buying direct. With a single local carrier collating orders and delivering at a time to suit the shopper, fuel consumption, congestion and traffic pollution would be reduced giving an environmentally-friendly solution that is a win-win for everyone concerned.

The idea, or close variants of it, is not new: what must by now be 20 years ago I remember a presentation from Forrester Research where the speaker (name now long forgotten) argued that the waste-bin of the future would be able to read barcodes and so to tell when he threw away a tube of toothpaste and automatically order another one (he suggested from P&G) which could be sent by post so that he never had to remember to buy the stuff and never ran out. Forrester’s futurist scenario saw consumers “contracting” with companies like Procter & Gamble to supply toothpaste, and other necessary but rather dreary commodities, on such an annual basis.

Such concepts as this “intelligent waste-bin” or the equally intelligent fridge which would tell Equally popular was the multi-talented milk float providing a daily delivery not just of your milk but of other groceries, internet shopping, pet food, washing powder, etc. That idea didn’t really catch on either.

you when the contents were approaching their use-by date were favourites with the futurists of the 80s and 90s but rarely turned into reality. Equally popular was the multi-talented milk float providing a daily delivery not just of your milk but of other groceries, internet shopping, pet food, washing powder, etc. That idea didn’t really catch on either.

So will Sergio Barbarino’s “carrier-as-utility” concept fare rather better? Certainly some of our major supermarkets have attempted to deliver rather more than just your weekly groceries although these have tended to be their own products rather than those from third parties. Equally Amazon provides a single source for a vast range of goods, although there is no attempt to collate deliveries. From a consumer perspective having a single carrier to deliver everything at a suitable time sounds like bliss especially for anyone who has ever taken a day off work to wait in for furniture or a “must-be-signed-for” delivery which invariably arrives at around 5pm; or has had to delay supper until late at night because the internet groceries containing the meal’s ingredients are a couple of hours past their delivery slot.

Discount

Equally significant is the prospect that such systems would bypass the high street entirely. Buying direct from a manufacturer, or from an online portal which includes primary producers, and “contracting” to have your basic requirements met for a year or six months at a discount would certainly streamline the weekly shopping list and could well prove to be a popular option especially for those of us who invariably run out of something vital at the wrong moment. It could also be a welcome option for those many suppliers who are becoming rather tired of the aggressive buying policies which certain major supermarkets have had on their margins and profitability.

In the USA vendor managed inventory (VMI), where producers take responsibility for servicing and stocking their products in-store, is of course far more commonplace than here. Translate the VMI concept into a web portal and marry it with a carrier who will collate and deliver everything ordered in a single drop at the ideal time and Barbarino and the futurists at P&G may be on to a winner. Factor in a weekly instalment payment programme so shoppers are not hit with a mega-bill for loo rolls every three months and a network of local carriers with flexible hours competing for the “utility” business and home delivery might just turn out to be rather more fraught than it can be at present and possibly rather more profitable for all concerned.

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