The Shift from Supply Chains to Supply Networks

In the 40 years since the term, “Supply Chain” was coined the nature of supply chains and how they operate has slowly been shifting.

Supply chains used to be very linear, often making use of only one or two dedicated service providers at every link in the chain.

Over the years we have seen this change with companies adding more service providers, manufacturers, etc. in order to accompany the varying demand of the growing global market.

A new term was coined, “Demand Response Network” and it describes the, “Supply Chains” of today much more accurately. We have moved away from the old, “Chain” and find ourselves firmly in a growing global network of manufacturers, transporters and other service providers.

The shift towards network thinking has enabled us to contend with the challenges of varying demand, unforeseen disruptions such as raw material shortages and even a worldwide pandemic.

The future of the supply chain is not linear, it’s a decentralised network growing on a global scale and it’s already here.

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Bag in Box Solutions, Packaging Waste and CIBC’s (Collapsible Intermediate Bulk Containers)

One of our clients in the food manufacturing industry previously made use of bag-in-box packaging solutions to transport liquid products to their clients.

These solutions create immense amounts of waste. In addition to waste, manufacturers incur unnecessary costs by having to pay people to fold and pack these boxes every day.

In our opinion, there’s unnecessary waste associated with these solutions:

1. Multiple 20 litre, or other sized, carton boxes for every delivery
2. Plastic wrapping to secure these boxes to pallets

With the exception of the pallet that carries these loads and can be reused a handful of times, manufacturers are making these packaging materials the problem of their clients who have to find a sustainable way of getting rid of them.

The 1000 litre CIBC makes these issues redundant by making use of a reusable, plastic secondary packaging container and a 100% recyclable inner liner that acts as your primary packaging.

The CIBC plugs right into your production line, requires no dedicated staff to prep for filling and reduces the amount of waste that ends up on your client’s site.

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CIBC’s (Collapsible Intermediate Bulk Containers) and Seasonality

Spending large sums on supply chain assets such as flowbins is a headache many manufacturers grapple with, especially within seasonal industries where assets are not used year-round.

We often find that at first clients like the idea of owning their own assets, but assets that are not being used turn into liabilities and only cost the owner warehousing space and money.

With a rental structure clients can order and return CIBC’s as their needs change and save on large capital expenditures.

Taking it a step further with a rental transfer structure, clients can send raw material in CIBC’s to the next link in their supply chain and along with it, the responsibility of paying the rental once the units are received.

Bag in Box Solutions, Packaging Waste and CIBC’s (Collapsible Intermediate Bulk Containers)

One of our clients in the food manufacturing industry previously made use of bag-in-box packaging solutions to transport liquid products to their clients.

These solutions create immense amounts of waste. In addition to waste, manufacturers incur unnecessary costs by having to pay people to fold and pack these boxes every day.

In our opinion, there’s unnecessary waste associated with these solutions:

1. Multiple 20 litre, or other sized, carton boxes for every delivery
2. Plastic wrapping to secure these boxes to pallets

With the exception of the pallet that carries these loads and can be reused a handful of times, manufacturers are making these packaging materials the problem of their clients who have to find a sustainable way of getting rid of them.

The 1000 litre CIBC makes these issues redundant by making use of a reusable, plastic secondary packaging container and a 100% recyclable inner liner that acts as your primary packaging.

The CIBC plugs right into your production line, requires no dedicated staff to prep for filling and reduces the amount of waste that ends up on your client’s site.

History of Supply Chain Management

Since the beginning of trade, supply chains have existed, even though they were not referred to as such. Different periods introduced new technologies, tools and operating procedures which expanded our understanding of supply chains and how to manage them efficiently.

Pre-1900’s: Prior to the industrial revolutions, supply chains operated locally and were restricted mostly to regions. During the industrial revolution, as railroads were being laid, trade opened up, but was still mostly restricted to countries as international trade by ships were very inefficient with goods being stored loosely in the hulls of ships.

The Early 1900’s: In 1896 Gottlieb Daimler made the world’s first pickup truck. As trucks became more widely available in the 1900’s transport of goods by road became easier and more affordable. Storage of goods was revolutionised when pallets started to be used in 1925 to store and make goods handling more efficient.

1930’s to 1940’s – The war kicked off further research and development of supply chains from an engineering and operations perspective in order to improve storage and distribution efficiencies. Developments were made to improve loading, unloading and further handling of goods to ensure that supplies could reach troops in due time.

1950’s – Containerisation and standardisation. The introduction and standardisation of shipping containers increased cost and time efficiencies, making goods cheaper and easier to transfer from railroads to trucks to ships and vice versa.

1960’s to 1980’s: During this period distribution increasingly moved towards trucking and away from railroad systems. Computerisation brought digitised inventory and warehouse management systems to the supply chains of the world.

1980’s to 1990’s: In 1983 the term, “Supply Chain Management” was coined. During this time RFID technology was developed and used to track inventory and distributed goods in some supply chains around the world.

We will look at key developments in supply chain management from the early 2000’s until the present day in next week’s post.

Supply Chain Trends From 2021 and Their Continuation in 2022

In 2021 we saw three trends emerge that will have lasting effects on how we do business:

  1. Agility

The challenges of the last two years showed us that supply chains needed to be agile and sustainable in order to survive the uncertainties that come with unforeseen challenges. However, in order to thrive in these conditions, supply chains need to be equipped with the technology capable of accurately predicting and anticipating the needs of the various links in the chain.

  1. Technology

To make effective use of technology and increase supply chain efficiencies the data gathered from these technologies must be processed and analysed in order to understand how assets are used, how inventory and other resources are managed, where weaknesses in the chain occur, etc.

  1. Engagement / Communication

Today, engagement with clients, colleagues and key partners in the supply chain is more essential than ever. With more employees working from home we have become more adept at making use of various communication tools. Armed with the knowledge that technology can provide we are able to engage in meaningful ways and proactively work to prevent disruptions in the supply chain.

In 2022 we will see the continuation and development of these trends:

  1. The move towards evermore agile supply chains
  2. Supply chains that are increasingly equipped with technology
  3. Increased investment in digital supply chain infrastructures
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