As the world has become more globalized, so have the supply chains that allow us to enjoy products from all over the world. Whether it’s shoes, fruit, or appliances, global supply chains allow products of all shapes and sizes to be produced in one part of the world and consumed in another.
This being the case, global supply chains must run smoothly and efficiently not to disrupt the steady flow of transported goods traveling worldwide.
Though today’s global supply chains do a decent job of moving goods all over the globe, they are far from perfect. Several issues have become everyday staples in supply chains. To reach a maximum level of efficiency and productivity, these issues will need to be solved, and processes will have to be improved.
Luckily, new forms of tech have begun to offer viable solutions to several problems that global supply chains face. By putting more energy into integrating various forms of innovative tech into supply chain processes, you can solve many of the issues associated with global supply chains. In this way, tech has the power to build a better, more robust, and more efficient global supply chain.
Table of Contents
- What Are Supply Chains?
- Issues That Supply Chains Face
- How Tech Can Offer Solutions to Supply Chain Issues
- Improving the Global Supply Chain with the Help of Tech
What Are Supply Chains?
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Supply chains are the systems that allow goods to be produced and transported to consumers. They involve several links, allowing goods produced in one location to be available for consumers to purchase in another. There are several entities involved in the process. These include:
- Materials processors: These entities are responsible for collecting and processing raw materials that are later used to produce goods — such as plastic, wood, and metal.
- Manufacturers: These entities create products from the processed materials they receive from materials processors.
- Vendors: Vendors act as intermediaries in the supply chain, buying products from manufacturers to sell to others. In some cases, a manufacturer may also act in the capacity of a vendor.
- Warehouses are spaces — typically in ideal geographic locations — where products are stored after being purchased.
- Transportation companies: Transportation companies are responsible for transporting goods along the supply chain, including truck companies, shipping companies, and airline transportation companies.
- Distribution centers: Distribution centers act as a hub from which goods and products can be disseminated to various retailers.
- Retailers: Retailers are entities who sell goods to consumers — either in a physical storefront or through online platforms.
These components play an integral role in the supply chain and are vital to its success. When these entities experience issues, it can negatively impact other links in the supply chain and the consumers who consume goods and products.
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Issues That Supply Chains Face
Before understanding how tech can help improve global supply chains, it’s essential to understand the common issues that supply chains face. By understanding these issues, the benefits of applying new forms of tech to supply chain processes will become easier to understand.
A common issue that many supply chains face is transportation disruptions. Whether it’s a ship that gets stuck at a dock or a lack of truck drivers at a transportation company, disruptions in the transportation of goods can have a drastically negative impact on supply chains.
As one can imagine, supply chains are deeply reliant on each link, and disruptions in one link can cause a domino effect for others.
For example, imagine that a fresh batch of oranges has just been harvested in Florida. The producers now depend on a transportation company to get the oranges to their next destination — a distribution center or warehouse.
If the transportation company is experiencing a lack of drivers and cannot transport the oranges, then everyone in the supply chain will be affected.
When the transportation company hires new drivers, the oranges will have expired. As such, the distribution center won’t get the oranges — and, therefore, won’t be able to send them to retailers.
Since retailers won’t receive oranges, it may cause the price of the remaining oranges to go up. And now — as a result of a transportation mishap — consumers will have to pay an increased price for oranges or may not be able to purchase oranges at all.
As one can see, a single hiccup in transportation can drastically affect the entire supply chain. This being the case, transportation disruptions are one of the most significant issues in global supply chains that need to be solved.
Pandemics and Crises
The Covid-19 pandemic uncovered major weaknesses and issues in global supply chains. As a result of the pandemic, there were shortages in labor, and the transportation of goods was disrupted as well. This was mainly due to the steep shortage of labor that came as a result of lockdowns associated with the pandemic.
The pandemic uncovered that there are no systems put in place to deal with crises — such as pandemics — that can rapidly decrease the number of workers available to work in the various entities involved in the supply chain. As a result, crises of this nature still have the power to negatively impact global supply chains’ ability to run smoothly and function effectively.
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In addition to transportation issues and a lack of preparedness for crises such as pandemics, there are several other disruptions that supply chains sometimes experience that also have a largely negative impact on their ability to function. These types of disruptions can negatively impact other entities in the supply chain.
These disruptions include situations such as fires, floods, and malfunctioning equipment. Often, these disruptions impede the ability of producers and other entities to produce and store products that are being moved along the supply chain. As a result, the supply chain is bottlenecked, and products are stopped from advancing along the chain.
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Human Rights Concerns
Supply chains have become scrutinized for a significant issue: concerns about human rights and the treatment of workers. Many global producers are located in countries with less government intervention regarding human rights issues. As a result, it has become common for some supply chain entities to take advantage of their workers.
The idea of workers working in poor conditions and getting paid unfair wages does not sit well with the public. As a result, supply chains have begun to scrutinize workers’ inhumane treatment.
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How Tech Can Offer Solutions to Supply Chain Issues
Though there are several tricky issues that global supply chains must deal with, you can apply technology in creative ways to offer solutions. There are several key ways in which tech can help improve global supply chain processes and solve issues that are a source of concern.
AI and Self-Driving Vehicles
One significant issue that all supply chains face is that of consistent transportation. A lack of consistent transportation can have dire consequences for a supply chain. The technology of AI, and its application to transportation, has the power to solve the issue of consistency in transportation in several fundamental ways.
If transportation companies involved in the global supply chain were to implement self-driving fleets of trucks into their operations, then they would be able to solve the issue of labor shortages. Self-driving fleets could also offer the possibility of quicker deliveries and more efficient transport, as no driver needs to stop to eat or rest.
In addition to its application to self-driving vehicles, AI can also improve other processes in the supply chain. Producers of goods can implement AI technology to increase the efficiency and consistency of their productions, making their turnaround time faster and increasing the overall quality of the goods they produce.
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Blockchain is a powerful technology that can improve global supply chains in several fundamental ways. The fact that blockchain technology has several ways that it can usefully be applied to improve supply chains make it an attractive technology to integrate into different supply chain processes.
Entities in the supply chain can utilize one significant way blockchain technology is by acting as a platform through which all entities in a supply chain can engage. In this way, different entities can all be on the same page throughout the process of the production and transportation of goods.
Another fundamental way in which blockchain technology can be helpful to supply chains is by making the payment of workers transparent and recorded in an unalterable way. Some entities may attempt to falsify wages documentation — making it seem like they are paying a fair wage when they are not.
Blockchain solves this problem as records of payments are close to impossible to alter after being recorded. As such, blockchain offers the general public a means to keep entities involved in the supply chain accountable.
Digital forensics is a field that utilizes digital technology to investigate crimes. It does so by collecting evidence from digital devices, then recording and analyzing the evidence. When it comes to solving the issue of human rights violations enacted by entities in the supply chain, digital forensics can be the perfect solution.
By utilizing digital forensics practices, you can monitor entities in the supply chain for human rights violations. You can collect evidence from documentation, data, and videos. As such, digital forensics can offer a means of solving the problem of human rights violations in supply chains.
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Data processing is the process of collecting, processing, and analyzing data to glean valuable insights. This can be a handy tool for supply chain entities and help solve critical issues.
One problem that entities in the supply chain have is knowing which products to produce and how much of them to produce. Data processing can aid entities in the supply chain in answering these key questions.
Data processing can forecast trends and provide insights into which products and goods will become more popular. As such, data processing can aid entities in the supply chain in producing the correct goods in the right amounts. This can save materials processors and manufacturers time, money, and resources.
Supply chains have been around for decades and, in many ways, have become comfortable doing things the way they have traditionally been done. For global supply chains to be improved, perceptions will have to change, and individuals will need to be open to technological innovations that can help to solve critical issues.
While some entities in global supply chains have begun to adopt new technologies into their processes, many are reluctant to invest in changes of this nature. The cost of implementing new technologies can sometimes be high, and though it may offer a significant return on investment in the future, the upfront costs can act as a barrier.
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In addition to high upfront costs, many entities in the supply chain may not feel motivated to improve their processes because they work well enough. Though issues may arise occasionally, they may not feel compelled to make drastic changes to how their entity functions.
For technology to be implemented more frequently into supply chains — and, as a result, improve processes — perceptions must change about the value of innovative technology. The more the public adopts attitudes favorable to technological advancements, the more supply chain entities will likely apply innovative technology to their processes.
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Improving the Global Supply Chain with the Help of Tech
New tech innovations offer numerous benefits to the global supply chain. Innovative applications of various forms of tech to supply chains can make supply chains more efficient, less prone to disruptions, and more humane.
Though change can sometimes be complex, many entities in the global supply chain have already begun to take advantage of the benefits that tech offers. As time passes, this application of tech to supply chain processes will likely become more common and, eventually, completely transform how global supply chains function.