Supply Chain : rapid changes for an economic linchpin

Eric Ballot, professor and researcher at Mines-ParisTech - PSL stresses the importance of supply chain for the economy, on pandemic background, in an interview for GEODIS company.

How should we view the contribution of supply chains to the modern economy ?

"The supply chain is the silent engine that powers the modern economy and it is growing in size and importance. The amount of goods being delivered to us is increasing significantly through e-commerce, which is also bringing these goods closer to us.  

This is moving us from a system of mass distribution to a fragmentation of flows in which deliveries and logistics operations are multiplying. This has been happening for a while.

In France, the median shipment weight was 160 kg in 1998; by 2004, it had shrunk to 30 kg and this trend has continued to reach around 4-5 kg today."

What are the implications for the industry ?

"More shipments mean more trucks and vans on  the road, with corresponding external impacts on congestion and sustainability.

These considerations  – higher demand, environmental impacts, city restrictions – are driving change in supply chain networks and the industry overall. In order to evolve to meet these challenges, logistics companies will need to be agile, responsive and innovative.

IT will play a crucial role in providing the tools and platforms that will enable different companies to mix and match capabilities to meet the demands for a more dynamic and efficient market – and the expectations of stakeholders."

Can you give an example of the kinds of changes that are needed ? 

"We need to find new ways to consolidate flows to mitigate the impacts on the environment from fragmentation up to the consumer.

Transporting large shipments via ships and trains is infinitely more efficient and sustainable than carrying 4-5 kg of goods for an individual ordering a 1-ton vehicle."

What are some of the lessons form the pandemic ? 

"Although we stopped traveling as people, there is no way to stop the movement of goods.

The crisis underlined the resilience of the supply chain as we coped with challenges, but at a high price.

It also increased awareness of our global interdependence and our vulnerabilities, such as we saw with the early shortages of masks and medicines.

At a country level, the strategic importance of the supply chain was driven home, as well as the need to increase its robustness and sustainability.

It’s clear the sector will continue to see dramatic and rapid change." 

 

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Want to discover more testimony and interviews on what can be the sustainable future of a major actor of supply chain and logistics, read our 2020 CSR report here: