The future of... Supply Chain Management

Dear friends,

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The other day, we were in a discussion in our small town regarding supply chain management, purchasing patterns, demography, and the results it has on our community.

To set the scene:

When I walk down our street for approximately 150 meters, there are 13 empty stores. They have been empty for years. Even one house/store is completely abandoned. There is one restaurant open, seldomly visited by locals and mostly by tourists.

A main street and town used to have a community purpose; everything you needed for day-to-day life could be found within walking distance. Let us look at what happened:

Around the turn of the millennium, modernization started. The sidewalks were lowered to be level with the street, parking lots (five) were arranged, where people used to park in front of the shop. The new street arrangement allowed for high and heavy traffic, which was nearly impossible in the past due to lack of space.

The town decided to be more attractive and welcomed two discounters on the other side of town. A huge parking space was allowed. You can imagine what happened to the main street.

Back to supply chain,

common daily goods moved out of our street(s), as discounters have a different product line compared to our local community. The other shops selling utilities and other stuff did not see many of their clients anymore and had to close business. People had to drive to other towns to get what they needed. The discounters had to build up their supply chain and built new warehouses somewhere in the region, causing the local shops to close due to low turnover.

Regional warehouses are replenished by central warehouses, and the central warehouses are replenished by imports. Many production facilities were off-shored in the 1990s.

Fast forward to today.

E-commerce is booming, and people get their goods delivered to their doorstep. The reach of their purchases has extended. Now, the heavy part. People's demand changes too. Some expect instant delivery the moment they press the button "buy." The supply chain cracks. Regional and central warehouses can handle that, but transport runs at the same speed as ever, only there seem to be more problems than benefits

• stuck in traffic,
• staffing,
• drivers want to be home everyday,
• reduced receiving times,
• infrastructural projects,
• administrative regulations,
• environmental regulations.

We wonder whether these "problems" are real, or an alibi for keeping the power at the seller's level. Reasons to think so:

When we rewind time, all goods for a population were available within a fair radius. The infrastructure is available, selling space. What is missing is:

1. Transparency about where the goods are in the region.

2. The lack of demand forecasting — the experience of the local shop owners.

3. Experiments to keep a shop.

4. Missing organization for a revival in order to reduce the carbon footprint and increase last mile performance.

Simple people, taking the future into their hands. Next week, a former shop will open again, selling their own prepared food and warm drinks. Further down the street, signs of new ideas becoming reality can be seen.

Owners are ready to experiment and do not charge excessive leases, dynamically depending on the success of the new business.

Will this remain a dream for some idealists, or can they make a living holding a store, selling what is needed?

Will AI in Supply chain solve these problems, before we turn back time, locally?

I think many cities have identical problems. Resistance to huge regional or central warehouses popping up in the countryside is rising. Rethinking needs to be followed by actions.

Abraham