Trends in Global Supply Chain Management

More goods, coming from more sources, going to more places: technology can help

Published: Wednesday, August 1, 2018 - 11:02

Whoever coined the phrase “it’s a small world” clearly doesn’t work in supply chain management. The earth maintains a relatively constant size of roughly 196,900,000 square miles of surface area, but in the last decade or so, the scope and complexity of global supply chains have expanded exponentially.

The resurgence of the U.S. economy, the steady rise of Chinese manufacturing, and economic growth in African countries and other less-developed regions all contribute to rising consumerism and an ever-expanding hunt for supply to meet demand.

Setting aside trade agreements, tariffs, and other political issues, things are booming. More goods, coming from more sources, going to more places.

One other thing that’s increasing: pressure. Every year there is greater pressure on producers to show regulators and customers that their goods are sourced ethically and sustainably. It’s as if the whole world is now from Missouri, saying, “Show me” when it comes to the integrity of products they purchase. Ingredients now matter as much as, if not more, than the end product. To many modern consumers, ingredients are the end product, whether it’s the wheat going into your cereal, or the cotton going into your jeans.

Where these products go after you’re done with them also matters, as the sustainability movement makes “waste” part of the supply chain equation. The same is true inside the supply chain, where the environmental and community impacts of manufacturing processes must be accounted for as part of corporate responsibility.

Thankfully, there are a number of promising technologies on the horizon that will help us all keep pace with the complexities and pressures of global supply chains. Some of them, like artificial intelligence, will undoubtedly do a lot more than help us cope; they’ll create new paradigms.

Some of these disruptive technologies are already in use, albeit in early stages, and showing immense potential. One of them is blockchain, a technology that is powering a simultaneous advance in security and transparency, two things that don’t normally go hand in hand. Usually one compromises the other. Blockchain has the ability to encrypt digital transactions—be it a monetary exchange or some other form of data—yet allow an infinite number of new transactions to join previous ones. We are seeing the value of this idea, for example, in quality certifications. Blockchain code gives each certificate issued a unique signature that is infinitely updatable. If a manufacturer of breakfast cereals wants to know if one of his nutrient suppliers has a valid, up-to-date quality certification, all he has to do is scan the supplier’s certificate with his mobile phone, and the current status of the certificate is displayed.

Satellite technology is another game changer. Commercial imaging companies have made the business use of satellites an everyday phenomenon. Pairing enormous eyes in the sky with on-the-ground sensor technology, even something as simple as RFID, can provide revolutionary new realms of information. In one notable project, one of the world’s largest meat producers tagged cattle with RFID chips, allowing real-time and longitudinal tracking of livestock in the environmentally sensitive Amazon basin. By integrating satellite imagery provided by a geospatial monitoring company, stakeholders were able to better understand the effects of livestock on at-risk land areas, such as those recently deforested or protected by conservation laws.

Virtual and augmented reality systems have amazing potential as workforce multipliers. These technologies are helping large organizations like DNV GL put skilled workers onto projects that are thousands of miles away, without ever leaving the office. That’s a huge asset as the tentacles of modern supply chains reach into ever more remote corners of the planet, either in search of customers or source materials, or both.

Last but not least there is the internet of things—perhaps the least “new” of these emergent technologies impacting supply chain management, but in a way the most important. The ability for people to connect anywhere, any time drives economic expansion. And the ability to integrate “sensing” machines into the mix has only started to transform the way we interact with the products we buy. A simple example is inkjet printers that can order new ink all by themselves. Scale that up to commercial applications, and we see embedded sensors providing real-time tracking of perishable foods en route from one part of the world to another.

In terms of technology disrupting the status quo in supply chain management, we’re really just at the early threshold of what’s possible.

To learn more, join Alexis H. Bateman, director of Sustainable Supply Chains at MIT; and me on Tues., Aug. 7, 2018, at 11 am Pacific/2 p.m. Eastern for the webinar, “Trends in Global Supply Chain Management,” hosted by Quality Digest editor in chief, Dirk Dusharme. Click here to register.

About The Author

Thomas Andresen Gosselin

Tom Andresen Gosselin is the director of Supply Chain Services for DNV GL Business Assurance in North America. He has worked for DNV GL in three countries for 20 years, with a focus on supplier social compliance and sustainability reporting services. When Gosselin is not serving customers while on the road, he is located out of Atlanta.