WESTERVILLE, Ohio, (November 18, 2013): A new white paper commissioned by Exel, the North American leader in contract logistics, and its sister company DHL Supply Chain, the world’s leading logistics company, identifies today’s digitally empowered consumer as a key source of disorder in retail and consumer goods supply chains. The paper sets forth the case for building consumer-adaptivity and cost-effective flexibility and resiliency into the industry’s logistics to manage potential disruptions.
“Consumer as Disrupter” - a report by Lisa Harrington, President of the lharrington group LLC, prepared in collaboration with Exel – identifies the key trends that are shaping the sector to help understand the need for the evolution of retail and consumer goods supply chains. The paper argues that the industry must reevaluate its approach to its supply chains and logistics to survive the “butterfly effect,” a small change at a localized point in the supply chain that can result in business consequences such as loss of customers or brand reputation, and billions of dollars off their bottom line.
According to the white paper, three major trends are reshaping the retail and consumer goods industry, particularly in supply chain networks and operations:
1. The Big Bang Disruption and the Cascade Effect. Quantum innovation and revolution in product cycles, fueled by instant access to information and consumer power, which have the capacity to instantly disrupt or destroy existing product lines and markets.
2. The Digitally Empowered Consumer. By 2016, smartphones used as part of the online shopping experience could influence up to 21% of retail sales in the US alone. Online shopping channels continue to morph, adding more uncertainty and complexity to the retail and consumer goods business model.
3. Rise of the Global Middle Class. Income levels in emerging markets increased by 96% from 2000 to 2010, and are expected to grow 45% from 2010 to 2016, driving a wave of consumerism for all types of goods, from basics to luxury items.
“In this sector, resilience is contingent on being asset light but having access to full scale and capacity on an on-call basis. It is clear that retail and consumer goods manufacturers should be re-thinking their supply chains with an eye toward one thing: building out a portfolio of options, risk tolerances and capabilities to support cost-effective flexibility,” said Senior Vice President, Head of Global Consumer Sector, Tom Kimball. “This enables their supply chain to be resilient enough to withstand shocks, agile enough to respond quickly to sudden or unexpected change, flexible enough to customize products and efficient enough to protect margins.”
Download and view the full report at http://supplychain.exel.com/ConsumerRegister. For more information about supply chain best practices, solutions and success stories, visit the Exel consumer pages at http://www.exel.com/consumer.
Exel is the North American leader in contract logistics, providing customer-focused solutions to a wide range of industries including automotive, consumer, retail, engineering and manufacturing, life sciences and healthcare, technology, energy and chemicals. Exel’s innovative supply chain solutions, skilled people and regional coverage bring together all aspects of contract logistics in addition to a wide range of integrated, value-added and specialist services. Exel is a wholly owned entity of Deutsche Post DHL, the world’s leading logistics group. For more information, visit www.exel.com.