Supply chains trends towards 2020 and beyondInnovations in e‐commerce and e‐fulfilment

VU University/Hogeschool van AmsterdamWalther Ploos van AmstelBarcelona, June 2014

Picture: Dinalog

Forrester (2014):Cross‐channel will account for 44% of retail sales by 2018

To hype or not to hype

Towards 2020

• Summary?• What do shoppers expect?• Copy paste margin killers• Innovations in the final mile: collect or deliver?

• Trends in e‐fulfilment• Synchronising the supply chain upstream

• Big data is dumb

Our 2020 supply chain partners

InventoryInventory

WarehousingWarehousingTransportTransport

Meet your customers

• Fresh• Fast• In full

• Peer‐to‐peer

Meet their government

• Safe• Silent• Clean• Invisible

Shoppers want better service:My day, my time and OTIFNENC

Metapack, UK (2012)

Innovations in the final mile

• Segmentation: passive, passionate, calculating and thorough shopper

• Options, options and more options: day, time, location, click‐and‐collect and in car (also for returns) 

• Pay for ‘same day’ and ‘your time’delivery

• Customers in control• Peer‐to‐peer options• Safe• OTIFNENC

More shopper segmentation is necessary

PassiveShopping is a necessary evil. Wants security, simplicity and 

convenience in service

More and more options in e‐fulfilment:hybrid distribution networks

Moving towards omni‐channel:What are copy‐paste margin killers?

• Complex last mile• High fulfillment cost• Customer returns• Unbalanced inventories• No profit…

• Dedicated supply chains are necessary for e‐fulfilment

At what cost…and what profit?

From ‘managing’ traditional supply chainswith 2 to 4% cost‐to‐serve

InventoryInventory

WarehousingWarehousingTransportTransport

To ‘organizing’ supply chains end‐to‐endwith 15 to 40% cost‐to‐serve

InventoryInventory

WarehousingWarehousingTransportTransport

Unbalanced inventory levels

Inventory: fire‐and‐forget?

• Increasing Assortment Dispersion Index (ADI) leads to higher inventory levels

• Flow: S&OP changes to product life cycle management ‘predict and prepare’

• Increase clockspeed: senseful ‘sense and respond’

• Most inventory is at your consumers• Data quality: Big Data is dumb…• Coordination as a service

Future warehousing

Future last mile concepts:clean, friendly, shared, large scale, local

Bringing logistics back into cities?

Future delivery platforms:Blue chip companies or new kids on the block?

End‐to‐end freight solutions

1. European TEN‐T networks2. City hubs and urban distribution3. Open and transparent data and 

mobile technology4. Big data and process mining5. Collaboration: 

vertical and horizontal

Many questions still unanswered…

• Local‐for‐local delivery• Peer‐to‐peer fulfilment• Cross chain European fulfilment retail networks

• Non‐EU cross border• Omni channel product life cycle management

• Data sharing and gain sharing models for collaboration

Imagine

• E‐fulfilment is key with increasing cost to serve: copy‐paste solutions are margin killers

• Big data are the ‘new black’: CAAS• The last mile in urban distribution 

will change soon… local know how is crucial

• Blue chip companies missing the innovation boat

Our 2020 supply chain partners?

InventoryInventory

WarehousingWarehousingTransportTransport