Rethinking supply chains with responsible software

Generated by DALL-E

Last week I was scrolling through the blue bird app and some words caught my attention.

“The fact that it costs more money to eat healthy is really frustrating”

Over the last few months, I have been thinking broadly around what it might mean to reimagine the supply chains that manage the world’s food supply. Thinking particularly about how a revitalised supply chain could unlock a new type of relationship with the end-consumer (you and I). Our global supply chains are incredibly interdependent and entangled, the interwoven nature is both a strength and a hinderance. The entanglement extends far deeper than many may think, and it is further entangled in economic political agreements that run global trade exchanges. It’s a highly complex system and unless a stepped change occurs, one that is driven by outside influence/incentive, I find it hard to see a refactoring of the system that will drive significant change in the way they are run.

With this challenge in mind, I started my thinking through trying to better understand the complexity of these systems. Instead of approaching the problem from the consumer’s end and asking why there aren’t more healthy alternatives easily available at my local retail outlet.

There are still many unanswered questions that I have as I continue to build out my context horizon. My approach started through analysing the ‘back end’, seeking to understand how we could re-architecture systems to create efficiencies and change incentives. To generate incentives for change, I think we need to look into the constraints of the supply landscape, as I believe there is significant demand for healthy options in the market but current business models mean that this demand is not being addressed. We also need to better understand the relationship a grocery retailer has with a consumer to create a new type of loyalty and deliver shared ownership of the lifetime value of consumers rather than just thinking about the value as a single transaction. It’s one thing to imagine an alternative solution, but to deliver a viable and lasting solution, it’s important to understand how things work and what are the unseen pieces that need thoughtful consideration.

I don’t have an answer or a product solution yet, but here are some emerging thoughts that I would like to add to the public discourse and dialogue that is searching for solutions.

Could we leverage a flywheel fuelled by consumer choice. How can the energy of consumer choice be used to drive change?

• Sticks and carrots that are issued against producers are not enough to drive stepped systems changes. Consumers play an important role and we (future orientated businesses efforts) have the ability to involve each other in the journey to tackle the climate crisis by harnessing the power of their purchasing habits.
• Government regulation/policy can create an environment for supportive green regulation to guide the direction of change and provide the initial capital input to allow models to shift.
• Exploring channels to drive change through expanding the utility of social capital. Making the consumers choice visible for others to see and creating models of desire to help fuel behaviour change. Dedicated and frequent reporting to generate a status of participation, which in turn becomes an incentive driven.
• Experimental business model that require existing retailers which already have existing customers bases. Retailers are best placed to facilitate this transition at scale as they have data on consumer basket preferences (they have the data but don’t prioritise using it as they often don’t know where to start because they approach it as a logistics business not a software service business). This data can be used to train the AI models for personalised recommendations tailored to individual consumer needs.
• Matching supply and demand to create a change incentive that is driven by the purchasing power of a consumer. Motivated through a financial incentive. Reduce the risk variable of a supplier not having a dedicated market (as I mentioned earlier, I strongly believe these is a huge demand for healthy options if they are affordable and easily accessible). This is done through utilising the existing distribution network that is held by retailers.
• Through creating a matching function, you can begin to build a flywheel driven by consumers through a headless software that could be implemented across several retail partners. Intentionally growing the market share of healthy options and incentivising the purchase of them to change behaviour.
• Extending the value of a consumer’s data into other verticals for their benefit, how could consumer data and behaviour be utilised to create unique product lines (insurance, medical cover, travel offers, banking, loans, etc) that are built specifically for them? This starts to extend into engrained lifestyle solutions that I will share in depth soon, but it needs some more polishing.
• Delivering embedded retail solutions that offer a radical convenient solution to a consumer’s requires the friction points in the ‘back office’ to be addressed and understood. Strong digital solutions that deliver lasting value for the entire system need to enable it to change by removing frictions to drive efficiencies and new ways to capture economic value in the process of product rather than just the sale.
• Consumer choice provides a vehicle to shift demand volumes to healthy alternatives, however there is an education arm that needs to be consider too as this will help to broaden the landscape and drive larger changes.
• Building consumer trust and leveraging technology shifts — recommendation engines and advice play a large part in our digital lives. Do we as digital natives trust the algorithms? What could high context recommendations for each user unlock for new business models?

It’s fascinating to think about how many platforms have gravitated towards the marketplace play book. The value in a platform lies not necessarily in the interface it provides, but in the ability, it allows for connections to be created and monetised (the software). Connecting the supply to the demand. A cycle of convenience, one might say.

“Instacart is continuing to expand beyond grocery delivery ahead of an anticipated IPO with a new strategy to provide same-day delivery of large items straight to consumers’ doorsteps.”

This starts an interesting thought experiment around how a protocol, rather than a platform could allow for a greater speed of partnership integration and execution. We are entering an interesting phase of software thinking as we navigate digital worlds.

What might it look like if we work backwards from convenience, rather than towards what we think convenience could look like?

I strongly believe that it is possible to rethink and refactor the supply chains that run the global food ecosystem. An ambitious challenge, but one that I believe is achievable if we understand how everything is pieced together and design different software to deliver convenience to all stakeholders. Which in turn unlocks radically new business models.

To end, you will notice that I have opted to use the word “responsible” rather than “sustainable.” Part of the reason for this is that I believe that society has chosen the wrong adjective to describe the solutions that we are seeking to create to address climate change. Creating sustainable solutions, means that they are designed to “be maintained at a certain rate or level”. Instead of aiming for a level of maintenance, which is near impossible, we should strive towards creating solutions that are responsible.

The other reason for choosing the word responsible is that it places ownership with all the stakeholders of the solution. Everyone has role to play in creating a shift towards a future that delivers value to generations beyond our time.