I interviewed Julio Franca who discussed What Trends will affect the Next Generation of Supply Chains?







Interview 1


Please provide a brief background of yourself

Sure. I am a Naval Engineer with a Master in Finance and a MBA at Rotterdam School of Management (top 5 in Europe). I have over 20 years of experience in Supply Chain, having spent ½ of my time as a Supply Chain executive in a FMCG manufacturer, running operations, and the other ½ of my careers as a Supply Chain consultant.


Currently I am one of the founding partners of Spin Consulting (www.spinconsulting.net), a specialized SC boutique who differentiates by deliver fast, tangible and sustainable results to our clients.


Thanks for having me here.


Regarding the top 10 issues affecting the next generation of supply chains, what would you say are the 3 issues are at the very top of the list?


1. Service chains will become more important than product chain

2. Companies will need to fully report supply chain externalities.

3. Supply chains must be designed to serve the “base of the pyramid


Please explain what each issue is and why it is important. And what can be done to effectively address these 3 issues? 


1. Service chains will become more important than product chain:


In many if not most business sectors today, great product is considered to be the table stakes just to play the game. Increasingly, discerning consumers are demanding morefrom pre- and post-sales service for the goods they buy. Accordingly, companies that effectively couple the pre- and post-sales service supply chain activities (including product knowledge, in-store service, warranties, responsive consumer services, and the like) will emerge as the winners over their solely product-centric competitors. That message was underscored by Apple CEO Tim Cook in his recent apology to consumers in China for the company’s perceived failure to listen to feedback about post- sales service. This was a great example of a company with one of the most innovative products in the marketplace forgetting that the consumer is still largely in charge and that service plus product (in this case, repair and warranty practices) trumps product only.


2. Companies will need to fully report supply chain externalities:


Corporate externalities are defined as the impacts of an organization’s manufacturing and business processes on other segments of society—and the need to disclose those externalities. While some work has been done around supply chain sustainability and the need to reduce carbon footprint, companies will need to do a much better job of disclosing the end-to-end impacts of their supply chains. This means measuring and reporting on the effect of major supply chain transactions on jobs created, carbon footprint reduction, sustainable procurement processes, types of labor used, and modes of transportation among others. The customer or consumer will begin to demand the transparency into these impacts much as these have now on the labelling of food and beverage products.


3. Supply chains must be designed to serve the “base of the pyramid:


The “base” of the pyramid is usually referred to market potential of the 5 billion-pluspeople in the world whose incomes are less than $2,000 a year.  We contend that companies in the consumable and durable sectors, in particular, will need to create products and associated supply chains to support the products that will cater to this market segment. To tap into this enormous potential, our supply chains must go through a total utilitarian design philosophy in order to deliver sustainable bottom-line performance. Current supply chain thinking, which is largely based on a cost plus model, will need to shift to a “not to exceed” cost model.


About Julio Franca






Julio Franca


Director at Spin Consulting


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