APICS is the premier professional association for supply chain management.

Applying Innovation to the Last-Mile Challenge

by APICS CEO Abe Eshkenazi, CSCP, CPA, CAE |   2014 | 0 | 0

Logistics remains an essential part of end-to-end supply chain management. This week Forbes focuses on the “last-mile challenge,” getting affordable products that provide essential value to billions of poor populations around the world.

This challenge is complicated by poor infrastructure, geographical isolation, and limited access to relevant information. “The consequence—which can affect both urban and rural populations—is that products providing essential value either do not reach the intended customers or are more expensive or lower quality than the standard products that are accessible by other populations,” write Nicolas Chevrollier and Stéphanie Schmidt.

The authors point to social entrepreneurs and their innovative alternative distribution schemes, from which all supply chain and operations professionals can learn. These ideas include:

  • Leveraging existing retail channels.
  • Creating hybrid partnerships, for example linking with nonprofit or micro-finance organizations.
  • Tapping local entrepreneurs and empowering them to be sales agents.
In less-developed countries, the last-mile challenge “is primarily caused by isolation—isolation due to, for example, poor roads in rural Ethiopia or a lack of information in a slum in Bangladesh.” But the last mile can also be an obstacle in Western countries, the authors contend. “In a Western setting, isolation is faced by aging populations in rural areas, people left without transportation means or facing mobility issues.”

They present the example of La Poste, the French postal service. La Poste has committed to delivering basic services through its 17,000 postal centers around the country, “thus combining large, established profit-driven institutions with a social impact agenda.”

Infrastructure and the supply chain

The Forbes article suggests that logistics professionals look to some nontraditional resources in order to solve the last-mile challenge. Think about how logistics can be a boom or bust to your overall supply chain strategy. As companies grow and advance their value chains in emerging markets, supply chain leaders will have to innovate in order to be successful.

In its January/February 2014 issue, APICS magazine’s Elizabeth Rennie closely examines the global infrastructure’s impact on the overall supply chain. She writes: “During this period of incredible complexity—with goods being hindered from flowing efficiently and businesses facing serious hurdles to timely operation—innovative supply chain managers are rethinking global infrastructure strategies.” 

Cesar Mendes, CPIM, is head of supply chain for Amyris and is cited in the APICSmagazine article. Beyond considering the logistics challenges associated with his work in Brazil, Mendes says his job includes analysis of local economies and their cultural and social environments, as well as strategies for achieving consistency. When doing business in a new or emerging market, he advises considering the area’s growth, along with workforce preparedness, stability of average wages, and shifting class structures. “The supply chain design process depends on the evaluation of multiple scenarios … which is not an easy task,” Mendes says. 

As we’ve seen, supply chain management is often complex; however, there are many examples of innovation and creativity by supply chain professionals. By providing various resources, including APICS magazine, APICS seeks to help supply chain professionals innovate in their businesses and their field. To find out how APICS can help you and your company, visit apics.org.

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