Almost everything you buy has traveled along some of the millions of miles of networks that make up the world’s supply chains. Most of the time, the logistics involved in making this possible are invisible and kept behind the scenes. But these days, supply chains are front and center as companies cope with a pandemic-induced shift in consumer behavior from experiences to goods that has left supply chains strained. A lot of attention has focused on ports and other infrastructure, as well as shortages of trucks and labor. Those are important bottlenecks that need further investments to be fixed, but they are symptomatic of a deeper problem.
What the global supply chain really suffers from — and what is behind most of the problems today — is a lack of technology. The current technology being used has left companies and supply chain providers with little cargo visibility, a lack of supply chain integration, and hardly any ability to anticipate and alleviate problems. Giving the supply chain its own “cloud moment,” where it is completely rethought and upgraded, will improve life, not just for businesses but also for their customers.
Global supply chains have long been complex, modular and siloed networks that focused on keeping up with capacity demands and optimizing for cost, efficiency and scale. They are designed to work in a certain way and can withstand known challenges, but when tested by unexpected events like a pandemic, they are incredibly fragile. They are built for a world in balance. And when imbalances occur, which unfortunately is often the case, they are simply not resilient enough to withstand disruptions and delays. The pandemic has accelerated and magnified the challenges that already existed.Today, logistics professionals across all types of companies need to work through a myriad of different suppliers, platforms, systems and solutions to source and ship products to customers. Just think about the ecommerce growth we are currently seeing, and what that means for companies. A clothing company that was used to distributing merchandise to their stores in the past now has to be able to ship directly to customers across the globe or to one of their retail locations for same-day pickup, and then also prepare for the possible returns of orders.Here’s how technology can help to ease these challenges.
Automakers are a perfect example of how certain industries could simplify their operations and reduce redundancies. The world produced almost 80 million cars last year, and a typical car consists of as many as 30,000 individual parts — from the screws to the windshield. And to add to the complexity, each car company has invested heavily into building its own version of a supply chain to maintain and manage its operations.
The opinions expressed in this commentary are of Mr Vincent Clerc ,CEO of A.P. Moller-Maersk Ocean & Logistics.