World Population Day is today, July 11, and it brings up a question related to what we do in freight and logistics. That is, how does population (and how do changing demographics) affect supply chains? As supply chains touch just about every aspect of businesses - and thus retail consumers - it stands to reason there is a pretty strong relationship between population and supply chains. Let's first set the stage a bit more. World Population Day began with a UN resolution in 1990, with its goal being to enhance awareness of population issues, including their relations to the environment and development. A supply chain - as a refresher - refers to the network between a company and its suppliers and customers, including the activities, people, technology, information and other resources that transform raw goods into finished products. It seems pretty clear just by the intent of World Population Day and the definition of supply chain that there is in fact a relationship.
A growing population and supply chains
World Population Day actually sprung from the UN marking the global population crossing five billion in the late 1980s. Upwards of 35 years later, the population is crossing eight billion, and the world is more connected than ever before. So supply chains are spread across many more miles and draw resources (and utilize talent) from more locations, while consequently also needing to service more places, too. More people require more resources and more finished products, and those resources need to get to manufacturing facilities and eventually the end consumers, wherever they are. That means supply chains are both more plentiful and more complex due to a growing population.
Demographics and supply chains
The relationship between changing demographics and supply chains is especially pronounced. A recent study of Hershey's candy supply chains covered this very topic, identifying three major shifts in global demographics that will impact supply chains. They include shifts in:
- The magnitude of the population - As in, while it's still growing, the growth rate is declining and the growth is more focused to certain areas
- Structural elements of the population - As in, age (longer lifespans), socioeconomic makeup (a morphing middle class) and religion (both prevalence and predominance)
- Where people live and work - As in, migration is reversing to now go more toward European countries, instead of away, and more toward cities, than away
Those shifts, the authors argue, have an affect on both the beginning and end of supply chains (as well as the middle). And the ongoing changes will also present challenges to supply chain managers, necessitating they reconsider where customer demand will be, as well as where they should locate production to meet the shifting demand. Beyond that, there are challenges of maintaining enough trained workforce as population growth slows and people get older and changing demand growth strategies to target changing consumer-bases.
On top of all this, while the article is recent, it was published in 2018, meaning pre-pandemic. So some of the shifts - particularly in the where people live and work category, may actually have shifted again based on how people have responded to COVID-19. Though a more recent piece at least indicates the demographics of the supply chain workforce are still evolving. And the other piece to the supply chain puzzle that relates to human population and behavior is of course the environment, and the need to maintain supply chain sustainability.
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