Technology – The Panacea for Global Supply Chain Intricacies

Introduction:

Logistics plays a vital role in the development of businesses and in turn economies. With a tremendous increase in per capita income and spending appetite, there is an upsurge in the transportation sector. Humongous boom in e-commerce and cross-border trade has added to the traditional trade of necessary goods and services creating a need for an efficient supply chain management.

However, due to massive growth in commerce globally, the stress on the global supply chain is increasing with each passing day along with countless intricacies. This issue is augmented by the scarce availability of skilled manpower, material shortage and fierce competition. Other challenges in supply chain management are unprecedented delays, stringent international regulations, foreign exchanges, cash flow, cost-effectiveness, language barriers, data management & handling, documentation, customer satisfaction, quality control, coping with different time zones, risk management, retention of skilled manpower, fuel management, security and many more.

Global supply chain management is evolving rapidly to cope-up with the existing challenges in the industry. One way to deal with it is by incorporating ‘Technology’ into the system.

Technology is the only solution to counter the challenges faced in supply chain management (SCM). The use of technology reduces the stress on the SCM because of its ability to deal with a large set of data and documentation which reduces the risk of errors. It reduces human efforts and is cost-effective too. Many players are investing in technology to make their operations less cumbersome and cost-effective.

A few of the technologies used in SCM to simplify the operation are as follows:

Artificial Intelligence (AI):

AI has emerged as a savior in today’s world. It is estimated that the impact of AI in the supply chain is around $2 Trillion while that in manufacturing is around $1.2 Trillion. The logistics industry will gain 89% by implementing AI in its operations.

Broadly AI in the supply chain can be categorized as Augmentation; that aids humans in day-to-day tasks and Automation; which can work with minimal human interference.

Transportation Management System (TMS):

TMS is sophisticated software that enhances the movements of goods by land, air, sea or a combination of modes. It optimizes the load, delivery routes and freight tracking, also handles documentation. This software carries out our complex and time-consuming tasks efficiently and within less time. It thus helps in timely deliveries and customer satisfaction.

Shipment tracking systems:

With the advent of technologies like GPS it is now possible to track any shipments. One can know the exact locations of our container, freight or parcel and can estimate the approximate delivery date and plan the further activities.

These tracking systems help to keep the customers updated with the location of their shipments. It helps in increasing transparency and reduces confusion related to order arrival delays and delivery time, enhancing the overall global supply chain management.

Robotics:

The use of robotics is not restricted to simple automation tasks these days. Robotics has evolved tremendously and it is used to reduce labor and make the operations in the logistics sector, especially in warehouses cost-effective and error-free.

Moreover, giant global supply chain experts are investing more and more in implementing robotics in their systems to make their operations more swift, timely and affordable.

Blockchain Technology:

Blockchain is not only restricted to cryptocurrency only. It has numerous uses in every industry including the supply chain. Blockchain enables digital ledger to be decentralized and improves the transparency for customers in tracking the shipment, audits and providing enhanced security.

Digital Payment Gateways:

Digital payment gateways have made the payment from customers to service providers and business to business faster, more accurate, more secure and easy. It has bypassed the cumbersome banking process which was slow and laden with countless charges.

Data Science and Data Forecasting:

These are the most emerging technologies enabling the handling of big data and utilizing it to forecast the important parameters of supply chain management. The use of such data helps in inventory planning to avoid overstocking and under-stocking of goods. These technologies will improve the efficiency of supply management in the coming years.

Weather forecasting systems:

Weather is an important factor in the supply chain, especially in logistics it affects the movement of shipments. Unfavorable weather can cause delays and can also damage the goods or freight carriers in case of a hurricane, tsunami, cyclone etc.

Accurate weather forecasting helps to get information about the weather conditions. Thus helping us to plan the activities accordingly. This helps to avoid unnecessary delays and damage to goods and containers.

Developing and using the weather forecasting software will reduce the transportation cost and the risk to a great extent.

Self-driving trucks:

Although in the initial stage, self-driving trucks will be a reality in near future. Many successful attempts have been made to improve the technology and billions of dollars have been invested in research and development.

Self-driving trucks will prove to be a boon for the last-mile deliveries and will aid the entire supply chain globally. These trucks will counter the problem of recruiting and retaining skilled truck drivers. It will reduce unnecessary delays, accidents, labor costs and fuel consumption.

Internet of Things (IoT):

IoT has countless applications in supply chain management. It improves the connections between transported goods, packaging, container carriers, tracking shipments etc. IoT helps in collecting vital data to ensure smooth transportation, appropriate cargo handling, predicting possible delays, forecasting risks and traffic congestion.

Security:

Global eCommerce is increasing at a tremendous rate. It is estimated to reach $4.89 Trillion soon. With such a corpus available, it will attract cyber attacks. The risk is further increased on a global supply chain level because of their interconnection with smaller chains and data sharing. Hence, there is a need for security to counter the possible attacks.

Modern and sophisticated cyber protection systems reduce the risk of cyber attacks by the use of technologies like encryption, access management, auto alerts etc.

Security systems will play an important role in the smooth functioning of supply chain management in the future. Having a technology which will provide strong and updated security will be in great demand.

Last words:

Global commerce is growing at an exponential rate. There is a need for an efficient, secure and updated supply chain system to manage the growing businesses worldwide. Technology is thus the panacea for the global supply chain for simplifying its intricacies.