Masterclass 2017

Is it possible to setup a sustainable supply chain, that supports multi-modal transportation, thereby minimizing inventory levels to an optimum? While leveraging the possibilities as generated by Industry 4.0?

In four sessions professors Ton de Kok and Tom van Woensel elaborated on the before-mentioned topics; entertaining a group of about 30 participants from a selected group of customers and employees.

We’re hereby presenting you a summary of the highlights of the sessions. Please reach out to Arjen van der Sluijs at McCoy & Partners should you like to receive more information.

Industry 4.0

Anyone expecting an overview of the latest trends in machine learning, artificial intelligence and deployment of blockchain can proceed to the next paragraph. This lecture concentrated not so much on that, but more on the implications for supply chain design:

Core of the lecture was that technology impacts more than just one area. The triangle of the quality of life explains the relationships. To obtain insights in which techniques are relevant for your organisation, it makes sense to create a table like below.

Inventory optimization

Together with co-host Bart op ‘t Veld we were demonstrated several inventory optimization techniques. In short, from scientific point of view everything there is to say about inventory optimization is done and dusted. There are numerous models that represent reality and that can used to calculate optimal inventory levels.

In a well-constructed speech, Bart argumented that it’s not that simple. The key in inventory optimization is not only choosing the right model, but also in obtaining the right figures for the parameters. In fact, this makes for a huge difference as he demonstrated with his calculations.

Looking backward this seems to be obvious. But how many organizations regularly calculate and validate the parameters of the models that they’re applying? How often do you calculate your costs of ordering? Or the average costs of (rented) floorspace?

Omni-channel logistics

Omni-channel is a marketing-based (multichannel) approach to sales that seeks to provide the customer with a seamless shopping experience, whether the customer is shopping online from a desktop, by mobile phone or by telephone or in a bricks and mortar store (TechTarget, 2015)

An omni-channel approach can be successful; it also requires a omni-disciplinary approach to meet all prerequisites. Omni-channel requires a network design that considers and balances all the elements of the network. Warehousing, inventory management, last-mile logistics and ICT must work together as an oiled machine.

Sustainability

This topic can be split into three major areas

The energy problem seems to be almost solved. There are numerous opportunities available to face the challenges. And technically the possibilities become more advanced by the day. Renewable energy that doesn’t deplete our natural resources is closer then we think; it’s more a matter of doing, rather then it being impossible.

Scarcity of food and water can be considered at many angles. Without downplaying any of these, the logistical impact is a minor one, compared to political and environmental angles.

The most impact on the supply chain comes from the last bullet point: “How to redesign supply chains to take into account major environmental and societal changes”:

• Aging society
• Immigration
• Skills
• Urbanization
• Scarcity of materials
• How to effectively use state-of-the-art information and communication technology
• How to balance efficiency, effectiveness and sustainability?

The 21st century is going to be about scarce resources. Supply chains will move from global to local-for-local. And inventory is not a cost, but means to create efficiency and sustainability. The methods and tools are available to align Profit, People and Planet.