In terms of future challenges, a second aspect of supply chains must be mentioned. One of the tacit factors behind facets of digital exchange in supply chains, and the use of these digital in processes as outlined above, is to eliminate demands for excessive labeling and transportation of goods. It has long been understood that cost efficiency and quality can be both strengthened by proper data and product flow.
Essentially this is a method for the elimination of capital. More specifically, the environmental influence of logistics has become increasingly worried and companies have been increasingly concerned to ensure that their operations are acceptable. Aspects of availability can be reduced by properly leveraging data to grasp operations. Therefore, supply chains should be strengthened to ensure that materials are reused or recycled in the network, and that reverse distribution networks should recover precious resources from packaging and merchandise. In this respect much research needs to be achieved, but this topic will be one of the big challenges for the future.
The use of plastic trays and boxes to carry and distribute fresh produce has become standard in the grocery industry (Gustafsson et al, 2006). Many DCs have specialist centers for cleaning such equipment and re-using it. This is an example of a backwards logistics system in that to move containers back down the chain a channel had to be built. In reality, the vehicles which often deliver back-haul containers to DCs or manufacturers for storage. Many steps have been introduced to minimize excessive vehicle miles, such as the use of rail rather than highways to transship the commodity over longer distances, for example the Tesco train that carries goods from the English Midlands to Scotland.
The IGD has created a Supply Chain, Waste Prevention Guide to explain how to reduce waste and maximize profits. Numerous case studies were conducted to illustrate how waste management activities can also increase productivity in the supply chain. ASDA, for example, has re-engineered the fresh food supply chain to minimize vendors’ time across the logistics network, maximizing later-day delivery and eliminating commodity wastage (see www.IGD.com).
In asos.com, the fast-fashion online retailer, offers a good example of some of these issues in practice. ASOS prides itself on its ability to fulfill customers ‘ expectations very fast. Unlike other online fashion stores, they suffer from heavy returns though. Hence, a great deal of work is poured into speeding up commodity return processes and bringing them back into the market and ready for sale to customers. All distribution and return have to step up to satisfy demands, but if this is not done properly then the operation would have huge costs and wastage.
