Supply chain logistics are nothing new in the history of commerce. It was the Phoenicians who first perfected the exchange of goods to such an extent that it would later prompt Roman author and philosopher, Pliny the Elder, to claim, "The Phoenicians invented trade."
Parlaying its single exportable resource, prized cedar lumber, they built a trading empire that braced the Mediterranean Sea. Indeed, long before we began looking at the topic from a macroeconomic issue beginning with the dawn of capitalism during the 17th and 18th centuries, people who relied on commerce to make a living did so with an eye towards getting the resources they needed in order to get their goods to market.
While the concept of the supply chain remains the same, the modern supply chain would be unrecognizable to even the most seasoned Phoenician trader. Three factors account for this ongoing transformation of the way we get goods to market. First, the global economy has extended that chain beyond the comprehension of merchants even a couple of centuries ago. Secondly, technology has transformed the possible when it comes to tracking and ascertaining each aspect of the supply chain, and finally, consumers are demanding higher accountability in regards to sustainable economics that are guided by social justice and environmental concerns.
The modern supply chain represents the zenith of technology and business organizational skills. Turning a microscope on each aspect of a company's production reveals its flaws and successes to a degree unobtainable even a quarter century ago.
Let's look at the various components that comprise the modern supply chain, which delivers both food from farm to fork, or the latest designer fashions that grace the catwalks of New York and the shelves of local boutique clothing shops. As the world economy grows, so too does the modern supply chain that gets the goods we need and products to market.
The modern supply chain is a complicated network of resources, producers, warehouses, and retailers that signal the various steps it takes to get a product to market. While in times past, the resources and goods a community used were procured from nearby neighbors if they could not be produced internally. Today, however, that nearby community might be 10,000 miles away.
Unlike earlier permutations of the supply chain, the modern version is heavily supported by advanced technology, and informed by a communication network that is instantaneous. This immediacy allows for company decision makers to formulate responses in real time to perceived threats to their supply chain to alleviate bottlenecks and work stoppages that might impact customer deliveries.
To fully understand the impact these changes have had on the evolution of modern supply chains, let's look at the defining characteristics of the role played by such technological innovations as supply chain automation and digitalization when it comes to effective supply chain management.
Imagine you have a shipment coming from overseas containing critical merchandise for your ongoing operation. In times past, you would have been left wistfully staring out towards the horizon awaiting the appearance of your ship. Today, however, satellite technology, accurate weather forecasting, and communication offer the opportunity to keep your finger on the pulse of your shipment from the moment it leaves the dock until the second it arrives in your warehouse.
Moreover, technology has wrought changes in inventory control that were unheard of only a couple of decades ago. Owing to improvements in software development, businesses are capable of resource and inventory stock monitoring to an unprecedented degree. Improved labor management, data capture, and real time decision-making capabilities are all beneficial aspects of technologies on the supply chain.
Improved technology provides companies with a vehicle in which to provide ready transparency and access to each link of the supply chain, and minimize risks should data suggest upcoming kinks that would interfere with a well functioning supply chain. People are now able to better pull all aspects of their business into a cohesive whole, thus giving a fuller picture of the overall viability of each component of the chain.
Modern businesses need to meet the ever rising expectation of the buying public, and one of those expectations is the demand for near instant gratification. Unwilling to wait the traditional three to five business days, modern consumers expect a range of add-on services that include such conveniences as same or next day delivery. To meet these expectations, businesses need to become far more nimble in the way they process, pack, and ship merchandise to their end users.
Digitalization is a powerful trend in an industry that quickly cycled through mechanized inventory controls to computer enhanced inventory practices, and now more sophisticated methods are available in recognition of the need to meet customer expectations. Today, there are numerous trends driving the digitalization of commerce, and the benefits of these trends include such factors as:
The growth of digital selling platforms has transformed the way people do business, and eCommerce is the result. With platforms like eBay and Shopify, the digitalization of the shopping experience checks the boxes for those shoppers looking for an alternate buying experience. Ensuring that your goods arrive to market, or the front door of your online customer, is greatly facilitated by the growth of digitalization of the modern supply chain. Meeting generational expectations of near instant delivery, sustainable supply sources brought by socially responsible companies, and within a framework that allows for those customers to conduct their own research prior to purchase. Nimble delivery and a reactive stance to changing market conditions is a hallmark of the modern supply chain, and digitalization helps facilitate the organization and management to achieve those goals.
Ensuring a continuous flow of supplies has become much more efficient with the advent of supply chain automation. While talk of autonomous drones is frequently bandied about when speaking of supply chain automation, this obsession simply cracks the surface of the role automation plays in the modern supply chain.
Prior to your shipment arriving via drone, automation plays a role throughout the supply chain. Thanks to warehouse automation, manual picking of orders has fallen from 76% to 72% in 2019, and industry experts believe that 2020 will only boost those statistics. From voice assisted solutions and automated storage and retrieval systems, warehouse productivity and this accountability accounts for a continuous flow of supplies along the supply chain.
Inventory control is likewise tightened in an automated warehouse environment, which decreases costs and ensures that orders will be quickly filled and sent out to customers. Another technology, blockchain, offers companies a chance to use data to provide a more transparent and traceable supply chain. Thanks to transparency, companies can use the data to identify potential hiccups in the supply chain and take steps to ameliorate supply disruptions.
The modern supply chain is continuously transforming to meet evolving market conditions. From organizational advantages that leverage technological advances to improve supply conditions, the globalization of commerce is the impetus for building a better supply chain. Indeed, the modern supply chain represents the height of technology and business organizational skills.