Get ready for mobile commerce

Distribution operations in the future will have to support mobile commerce, including consumers ordering and paying for products with their smart phones. "We must be fully prepared to go when and where our customers and consumers are," said Deborah Lentz in her speech on tomorrow's supply chains at the CSCMP Europe 2010 Conference, held in Rotterdam in March. Lentz is a vice president of customer service and logistics for Kraft Foods Europe.

According to Lentz, new technology is just one of a number of global trends, including aging populations, environmental issues, and stiffer regulations, that will change the structure of supply chains in the coming decade. In addition to smart phones, consumers are increasingly using the Internet and even television to place orders, she noted. To meet the frequent demand for small quantities that these technologies enable, companies will have to engage in rapid replenishment to ensure on-the-shelf availability of their products, she added.

Supply chains in the future will also have to serve consumers in a sustainable manner, Lentz contended. For example, product will have to flow through the supply chain with minimal inventory. To reach that objective in Europe, where companies often have stocking locations in multiple countries, as well as to reduce costs, they are likely to collaborate on warehousing and transportation. In addition, companies may share third-party logistics service providers (3PLs), who will handle direct-to-store delivery for multiple companies or coordinate shared warehousing among different parties. Lentz even suggested that companies might also collaborate on city and suburban or rural deliveries.

The rapid exchange of point-of-sale data will be necessary to signal changes in consumer demand so that manufacturers can produce the products that retailers require. "When the customer orders a leather seat, the cows should begin to worry," Lentz said. In this regard, she expects to see more companies share and synchronize master data, a base of common information about product types and inventory.

As trading partners work more closely together to meet consumer needs, Lentz noted, Kraft plans to take advantage of its suppliers' ideas for product improvements and other ways to speed shelf replenishment. Collaboration between trading partners to integrate the supply chain will help improve real-time visibility, reduce waste and lead times, support sustainability, and enhance service levels, she said.