6 Global Supply Chain Trends to Watch in 2018
Article by Gary Barraco | Global Trade Magazine
The Complexity of Conducting Global Trade is Exploding
Global trade continues to accelerate both in volumes and complexity, with the WTO’s most recent trade forecast revised to show improved growth in world merchandise trade volume.
Just look at the numbers from Alibaba and their most recent Singles Day, where products were purchased from 192 countries. The number of tons shipped by ocean containers has multiplied many times over in recent years—almost 17 times—from 102 million tons in 1980, to 1,720 million tons in 2016.
After years of stagnation, trade has been soaring this year as an upturn across major global economies picks up momentum and raises hopes that retail is ready to improve. At the same time, the complexity of conducting global trade and complying effectively with myriad and growing regulatory and licensing requirements has exploded due to political unrest, numerous additions and trade agreement revisions, rising protectionist measures, the e-commerce explosion, and the sheer growth in types and numbers of products imported and exported around the world on a daily basis.
As we flip the calendar to 2018, companies with global supply chains should keep their eyes and ears open for these primary concerns. (These are listed in no order of precedence or severity.)
- #1: Retail supply chains need flexibility in order not to break
- #2: Europe and Asia are churning out trade agreements, while the United States retains its staunch demeanour at the table
- #3: Britain’s exit from the EU is already causing disruption
- #4: China continues to dominate global manufacturing and trade
- #5: Keeping goods moving is tougher than it looks, and pricier
- #6: CXOs are challenged to be in the present, but look to the future
The 2018 Strategy
Against this backdrop, how do you and your colleagues address the challenges in 2018? What are the top priorities and how do you tackle them? Today, every business is a digital business and the impact of digital strategies on supply chain management are of particular importance. For businesses around the globe, 2018 will be shaped by the success rate of digital transformation efforts.
Many companies have realized that going digital is the only solution to break traditional supply management chains and move boldly into the future. Digital technology will create a significant improvement in business outcomes, as long as businesses reinvent their global supply chain strategies while concurrently reimagining their supply chains in the digital sphere.
According to a McKinsey report, only about 40 percent of businesses were digitized in 2016. New industry dynamics are driving the global supply chains to new levels, with digital transformations occurring across manufacturing sectors and into supply chains at every level.
While it will take time for companies to become “fully digitized,” many sectors have passed the halfway point in their transformations. The New Year offers opportunities to continue making changes. More than ever before, now is the time to digitize or die.
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