Boomerang supply chains

By Hugh Williams

- Last updated on GMT

Related tags Supply chain management Supply chain

If you throw your watch into a crowd, you don’t expect to see it come back!

Right now, for most supply chains, this is basically as far as it goes. Products enter the market and rarely return to manufacturers or suppliers. But the focus on sustainability and waste reduction may well change things in the future.

Effort is currently concentrated on reducing packaging. Yet we all know this is just the first step. The days of disposable packaging are numbered. You might argue that 100% recycling is already a reality for some products, but it's not yet an achieved fact for all. This may be why governments and European commissions are studying the possibility of making all manufacturers responsible for product re-use and recycling.

This will go way beyond a logistical issue. The entire shape of your supply chain will alter once you start to integrate this new dimension.

This means your supply chain planning will need to evolve too. For example, you will not just be forecasting sales, but also when, where and how much product comes back. You will not just be planning production, but also the processing of supplies coming from customers. This will impact on planning processes, people's skills, and your software configuration.

Like all change, clever businesses will quickly find ways to turn constraints into an advantage. They will present opportunities to get even closer to the end consumer, maybe tying them commercially into the new 'circular supply chain'.

This is not science fiction. A handful of supply chains already operate this way. For example, the newspaper industry collects and re-uses unsold papers as an integral part of its supply chain.

I accept this set-up is still a few years away for the rest of us. It will take a few years to put into place. Because all of a sudden, you are no longer throwing a watch into the crowd. You are throwing a boomerang, and you'd better be ready to catch it when it comes back.

Hugh Williams is founder of supply chain planning specialist consultancy Hughenden​.

Related topics Supply Chain

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