Introduction
Supply chain management involves the management of the business activities and processes network that includes including raw materials procurement, manufacturing, packaging, and the final product distribution. Supply chain management essentially aims to avail the right product at the correct time, the correct place, and the correct price to the consumer. It streamlines the business supply function so that the customer value can be maximized and the company can consequently compete effectively in the market. This process is very prevalent in business institutions throughout the world including Europe.
In Europe, this process has actually been a very critical pillar or backbone to most of the business institutions. Effective supply chain strategies have been rolled out with the aim of increasing the overall performance of the business (Frazelle 34).
The population of most European states has been on an increasing pattern over the last century and these have had different impacts in both political and economical fields. It is indeed a company’s ability to efficiently adapt to these radical shifts that will determine its level of success and its opportunity accessibility. The implication of this is that the supply chain management discipline in Europe requires a lot of flexibility so as to cope with changing demographics.
The demographical trends witnessed in Europe have had several implications on the both supply chain and productivity. Two of the trends that have tremendous implications are aging and urbanization.
Most supply chain managers across the European continent have for long believed that the consumer dynamics and demographics only matter to marketers, economists and the government policymakers. However, demographic trends have also had very huge effects and impacts on distribution statistics and the patterns of international trade (Mentzer 67). This is why managers of supply chains need to constantly asks themselves questions concerning the location, nature, modes of buying and the products bought by consumers.
The consumer is usually described as being the biggest economic driver. The various models of supply chain should therefore have full grasp of the relevant demographics. This is because these demographics are actually the ones that will determine the nature and character of the future customer (Frazelle 47).
It is a common notion that most of the supply chain managers in the world spend many sleepless nights doing contingency planning aimed at mitigating disasters or disruptions that are likely to occur in the near future, that is one or two years. However, the bigger question should be how the consumer will be in, say five to ten years. This factor clearly needs to figured or incorporated into the supply chain modeling discipline in Europe and in all other parts of the world.
It does not matter whether a business cycle is happening or whether it is in its product growth and development stages, the consumer’s demographics remains very crucial.
As stated earlier, one of the biggest changes being witnessed in European consumer demographics is age. For example in Europe, the total number of individuals or people aged above 60 years is actually greater than that of children who are five years old and below.
The companies in Europe should therefore be asking themselves questions regarding the nature of their future customers and the nature of the product consumption at that time. For instance, the consumption patterns of a person who is 65 years old and above are significantly different from those of a person aged between 25 and 35 years. Clearly, this factor should be taken into consideration by the supply chain modeling discipline (Mentzer 54).
The changing demographic trends also have a significant effect on economic competitiveness of companies. Transport and infrastructure are important determinants of this competitiveness. For example, a demographic trend like increasing urbanization places a constraint on the locally available transport facilities and infrastructure. This inadvertently affects supply chain and indeed the supply chain management process because the movement of products to target markets becomes harder. A strain on the available infrastructure is also evidenced and this leads to an increase in logistics cost. The European supply chain management discipline needs to understand that more investment should be placed on transport facilities and infrastructure so that benefits can be accrued in the supply chain management process.
Works Cited
Mentzer, John T. Supply Chain Management. Thousand Oaks, Calif: Sage Publications, 2001. Print
Frazelle, Edward. Supply Chain Strategy: The Logistics of Supply Chain Management. New York: McGraw-Hill, 2002. Internet resource
