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Forbes – The International Supply Chain: Predictions for a Weathered Industry

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The International Supply Chain: Predictions for a Weathered Industry

February 16th, 2022   ·   By Rob Garrison

In the last four years alone, the international supply chain has seen wave after wave of challenges. Some have presented rare opportunities for change, while others have exposed fractured and fragile operations that have hidden under a glowing exterior for decades. From trade wars with China and supply-side bottlenecks to raw material shortages and the Covid-19 pandemic, all have pushed the global supply chain to its limits.

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The first mile is the new final mile

One idea I have long campaigned for is the importance of the “first mile,” which covers the initial 80% of most international supply chain operations. To understand its importance, we need to understand what led us into our present predicament.

Amazon has been arguably one of the biggest successes in the supply chain over the past decade. It led the charge in “final mile” investment, focusing almost exclusively on improving the customer experience around delivering goods. Ultimately, Amazon changed the way we think about ordering and receiving products.

While final-mile operations began flourishing, however, thousands of miles away the first mile has been chugging along like it’s 1980. Resilience is lacking across virtually every industry group, supplier-importer trust is at an all-time low and true end-to-end supply chain visibility remains an enigma.

The upside? I believe we are on the precipice of change. Products sold digitally to customers in the final mile can no longer continue to be purchased manually by importers in the first mile. The industry is ripe for a technological revolution: Digitally connecting to the people who make and move products will soon become essential to creating the balance, efficiency and transparency required to deliver operational excellence, protect brand reputation and improve profit and sales.

Here are my top predictions for the year ahead.

1. China takes on a new role.

When China emerged from a strict form of Communism in the late '70s, it slowly stepped back onto the world stage, primarily as a low-cost manufacturer. Fast forward to today: China continues its ascent as an extremely powerful seller but is also rapidly becoming an impressive buyer and competitor on the world stage. Companies will continue to develop plans to ensure they aren’t overexposed in this market and will reconsider their alignment to China in this new age.

2. The international supply chain becomes common knowledge.

Before 2020, few people had stopped to consider where their products came from or had any idea what the heck an international supply chain was. This is no longer the case. Images of ships in what can best be described as “Chick-fil-A-drive-thru-esque” lines have heightened public awareness of both, and it's safe to say that the supply chain is at the top of many people's minds.

3. Transparency becomes a necessity.

$2.3 trillion worth of products is purchased abroad and shipped to the U.S. each year, representing 13% of GDP in 2020. This is likely the largest sector left that has not been disrupted by technology. 2022 will no doubt be the year that CEOs, investors and consumers will stop simply asking for visibility and transparency across the supply chain and will come to expect it. “Set it and forget it” will become “know it and show it.”

Making The Most Of The Year Of The Tiger

Here are some simple ways I believe we can start to bring change into a stagnant industry.

  1. Connect your supply chain.
    One of the fundamental pieces missing in the global supply chain is the connection between importer and supplier. This can be easily achieved by digitizing the relationship through a centralized solution to create greater efficiencies.

  2. Digitize your orders.
    PDF order forms or home-grown spreadsheets can no longer be relied on to manage trillions of dollars’ worth of imports. By creating digital versions of orders, all parties can work from a single version of the truth, creating complete transparency and real-time insight into the sourcing, production and movement of goods.

  3. Automate upstream operations.
    Creating digital orders means you can automatically share important information with the teams who need it, as well as automatically generate validated documentation to process and manage imports. This reduces manual errors, prevents delays between operational units and reduces rework and fines caused by, for lack of a better term, “things going wrong.”

The Year of the Tiger is upon us, marked by qualities including bravery, competitiveness, unpredictability and confidence. If the Chinese zodiac is to be believed, we have a lot of opportunities in store.
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Mercado is an import order management system (iOMS) that connects and automates the global supply chain across the first mile (the initial 80% of your operations) by creating a digital order, so you can plan, buy, and move your products online with ease.
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