Simplified examples of current supply chains are used to show how supply chains work today. Although there may be a wide variety of supply chains for the same type of activity, the example supply chains are described according to the same structure.

We have selected particular situations, which do not describe all cases, in order to illustrate how solutions can be applied. A distinction is made among regular replenishment, promotional flow and seasonal flow.

We will now describe the main characteristics of the five types of supply chains.

Cereals. The cereals supply chain is characterized by seasonal raw material production, regular consumption patterns (but influenced by promotions) and remote as well as local sourcing (depending on the country). Overall, there is improvement potential on stock levels and the length of stay of stocks at distribution centres and on retailers’ shelves. Also, transportation and storage facilities could be improved in respect to their CO2 emissions and energy consumption. Some illustrative solutions for this example supply chain include shipping larger volumes or cross docking, sharing transport to stores, efficient and aerodynamic vehicles (especially for city replenishment) and shared warehousing on combined categories using “green” facilities.

White Goods (large household appliances). The main characteristics of the white goods supply chain include long lead time from source to shopper, yet sometimes the product lifecycles can be short; inventory levels could be improved, especially at retailers (many retailers hold inventory even though it needs to be delivered); stocking locations could be reduced; significant physical distribution and reverse logistics; collaboration and integration with other parties could be improved; home delivery could be more flexible; and opportunities exist involving standardization of products.

Examples of suitable solutions to apply include the use of point-of-sale data for production planning, collaboration on fulfillment between manufacturer and retailer, improved forecasting and inventory management and SKU rationalization, shared warehouses and standardization of product

Beverages. The beverages supply chain is characterized by relatively high inventory costs and opportunities to reduce transport and fuel costs. Also, there is improvement potential regarding the collaboration on both forecasting and logistics (either upstream from the raw material suppliers and manufacturers or downstream from manufacturers and retailers or among manufacturer competitors).

This is also the case for data exchange, which still involves a lot of manual handling. Suitable solutions to apply include shared warehouses; pooling opportunities run by logistics service providers; shared transport with other manufacturers; the use of mixed, efficient and aerodynamic transport modes like (jumbo) trucks, rails and barges; and reducing the number of stocking locations and new investments in assets, like green warehouses. There is also significant potential in full information transparency through data exchange (point-of-sale), both upstream and downstream.

Vegetables. The main characteristics of the vegetables supply chain are local and global sourcing, short cycle time (the product should reach the market as quickly as possible), the critical importance of product quality and freshness, seasonality of some vegetables, and flow characterized by many miles from source to consumer.

Suitable solutions to be applied include the use of standardized totes to reduce handling, sharing infrastructures (possibilities of bulk being turned into consumer-ready units), differentiated supply chain networks (intermediate pre-processing centres, including consolidation, value-added preprocess), reducing touches after the initial farm or pre-production, efficient assets like solar-powered refrigerated trucks and solar panels on the roof.

Coffee. The coffee supply chain includes opportunities regarding the inventory stay at warehouses. Coffee is a high-value product, collaboration among manufacturers could be improved, and there are definitely opportunities for more involvement of logistics service providers. Overall, the chain consists of a number of steps.

Suitable solutions to apply in this supply chain include collaborative physical logistics (such as shared warehouses between coffee manufacturers and between different kinds of manufacturers, and the involvement of logistics service providers in warehouses and transport). In addition, packaging can be done closer to the consumer. Better information on fluctuation management and promotions will improve forecasting. POS data needs to be available to improve replenishment (regular as well as promotions). Improvements also can be made regarding the use of efficient assets like green warehouses.