In the past twenty years, supply chains have evolved from linear structures into complex webs designed to capture custom and contain costs. Will they be fit for purpose in tomorrow’s world? And if not, what do future supply chains need to look like to keep pace with the next consumer generations?

In an economy where your grandmother, your gardener and your godchild have all heard of #ClimateStrike, transparency matters. Over 80% of consumers already say the behavior of a company is as important as the product it sells. In today’s markets, transparency and traceability are not just nice to have – they’re essential.

A growing number of business models are built on the “green” movement, tapping into an overall trend of greater consumer responsibility for health, safety and wellbeing. For example, the app Yuka analyzes food and cosmetics based on nutrition, presence of risky additives and biological dimensions to offer an overall score and, if necessary, recommend healthier alternatives. In essence, then, it turns impenetrable labelling into straightforward, consumer-friendly information. There are many apps in the Yuka vein: Good On You does the same for ethical fashion, for example. What they have in common is that they reflect changing consumer priorities and their implicit supply chain expectations.

Juggling expectations

Today’s conscious consumers are not only concerned about climate. They want to know that the resources involved in production have been used efficiently and sourced ethically; that the people involved in production have been paid and treated fairly; and that their goods have been transported in a waste-minimizing, carbon-neutral way.

The good news is that as many as two-thirds of consumers are prepared to pay a premium for ethical, sustainable goods. So, investing in transparent principles and processes makes sound business sense. But where to start? Brands must first examine and understand every aspect of their own increasingly complex supply chains. Even with advances in data-driven technology and digital tracking possibilities – or even because of them – many companies will have weak links in their supply chains. And if these clash with current consumer concerns, they need to be addressed before they are revealed by public scrutiny.

It’s not always easy to balance aspects as wide-ranging as tax considerations, labor costs, quality and – now – customers’ shifting expectations. Let’s take the example of fast-fashion brands such as Primark, H&M or C&A. They are vocal about their efforts to be more ethical and sustainable – perhaps in part because they have to be. But they’re also acutely aware of the need to keep costs low if they are to retain their core customer base.

At the operational level, many organizations have traditionally focused predominantly on reducing cost. Especially in the area of consumer products, supply chains have long been about consolidation, scale and cost reduction. Are these the qualities of a future supply chain? The answer is: quite possibly not.

A supply chain with infinite possibilities

It’s almost a decade since Coca Cola first launched its incredibly successful “Share a coke” campaign with personalized bottles and customization remains an important consumer trend. Supply chains – and the technology that empowers them – are catching up to offer individual specification at mass production prices. P&G is leveraging 3D printing to offer personalized razor handles. Levi Strauss has replaced manual processes with flexible robotic production, allowing consumers to customize thousands of different styles. And Adidas is introducing “sewbots” with the ability to increase personalization and almost double the throughput compared to a manual production line. With Nestlé recently announcing its personalized Kit-Kat initiative, it appears brands are counting on a future tailored to individual tastes. And while there is something to be said for embracing this trend, it remains to be seen whether the new solutions prove profitable at scale and become the norm.

It’s also important to remember that tastes are constantly changing. Convenience, customization and speed are absolute musts for the next generations of consumers, but what will the future needs be?

Designed by disruption – and demand

If a brand’s success depends on future consumer habits and trends, where should companies invest time and effort to create a supply chain fit for that future? With so many competing agendas, it can be difficult to navigate through the fog and identify what has staying power.

Although nothing is certain in our era of transformation, disruption rarely comes from within. Business leaders are already faced with legacy supply chains that have been shoe-horned into new processes or infrastructure in response to changing consumer requirements. Some have discovered too late that there’s no point investing in “the” ideal supply chain setup because there’s no such thing in our increasingly fluid ecosystem. Against this background, does it make sense to adapt the current structures further? Or are they too rigid, change-averse and slow-moving to keep up with future demands?

It’s time to radically rethink the roadmap to the future and to reinvent the supply chain. And when the starting point has to be strategy and consumer needs, the journey could involve building up entirely new supply chains or establishing flexible ecosystems with unconventional parties in order to avoid the pitfalls of the rigid legacy structures. Those that get it right will secure themselves superior supply chain capabilities – and a leading position in markets driven by consumer demand for traceability, convenience, speed and choice.

FutureConsumer.Now. The future of tomorrow really starts now. Is your company ready for it? And what will this future look like? That’s why at EY we have started the FutureConsumer.Now Initiative. FutureConsumer.Now is a global EY program that is helping business leaders understand the future consumer, so they can shape their business for tomorrow. It is built around a series of global hackathons held in Berlin, London, Los Angeles, Mumbai and Shanghai. Business leaders, future-thinkers, and EY professionals came together to explore eight hypotheses about the changing consumer. Then they defined and modelled 15 future consumer worlds that might emerge. Find out more at www.ey.com/futureconsumernow.