The global supply chain has a tech problem - and solution

In a perfect world, the global supply chain would benefit from the kind of technological advances that have transformed industries as diverse as car manufacturing and education. Automation, artificial intelligence, and other digital innovations would power a seamless global system to help shipping lanes run smoothly, and ports operate without a backlog.

2021 exposed many of the shortcomings of the global supply chain. A 15% surge in demand for goods in the United States during lockdowns overloaded a system that runs mainly on siloed mainframes and physical documents. These cause bottlenecks and slow the flow of goods along trade lanes, ports, railroads, warehouses, and highways.

It's quite unlikely the system will fully automate anytime soon. The supply chain consists of dozens of industries and thousands of companies. It is unable - and perhaps unwilling - to integrate its systems with the latest technologies. Full automation would be slow and capital-intensive. It would require cooperation that is difficult to achieve, especially in highly competitive spaces like ocean shipping.

Businesses should, instead, learn from the ongoing supply chain crisis and find technology solutions for it. While they can’t digitise every link in the supply chain, or solve all problems in the global supply chain, businesses can identify bottlenecks and use tech solutions to ease these.

Advanced digital tools available today means companies don’t need armies of developers to make progress. Application development platforms can help companies to automate processes and upgrade legacy systems. This will boost the transparency of the supply chain and accelerate workflows. It will also keep companies proactive and prepared for disruptions.

Too many businesses run legacy systems that gate-keep their data and prevent them from making better-coordinated decisions. Modern IT systems can unlock and harness data to better interact with other players in the supply chain. They also help companies with their decision-taking. This is critical given the number of disruptions businesses have experienced during the pandemic.

Some companies are acting quickly to address these legacy systems. They leverage modern application platforms to deliver scalable, easy-to-use digital experiences for their employees and customers. Meanwhile, their actions lead to improvements in the global supply chain.

Crowded ports are also facing the prospect of labour shortages. To address this, Dutch multinational Vopak launched a management system that makes port terminal employees more efficient. Initially employed in the Port of Savannah, the system allows operators to make data-informed decisions. It enables them to carry out tasks 10-25 times faster than before.

Working with a lean team of just four developers, Inchcape Shipping Services created in just 13 weeks, IT architecture capable of integrating its information systems. This digital solution provides real-time insight for Inchape’s customer service employees to prepare port call estimates. Time spent has been reduced by half.

Similarly, Green Cargo developed cloud-based applications to meet its most pressing needs. Instead of overhauling its antiquated mainframe logistics system and SAP ERP infrastructure, in a matter of months, it created apps for rail-yard workers to perform routine tasks with. This helped them scale customer service operations and reduce in-service wheel bearing failure by 50%.

Even before the pandemic, the global realities of logistics could impede businesses. With countries and regions having different sets of rules, tariffs and import restrictions, businesses long have had to contend with complicated and slow shipping processes.

This creates massive logjams for businesses who still rely on analogue systems. Savvy businesses are harnessing technological solutions to integrate procedures. This eliminates long custom clearance times and cuts shipping costs. It also gives businesses increased control over the flow of their goods. In the meantime, it strengthens transparency and compliance.

In under three months, trade compliance outsourcing company Pincvision created a digital export declaration service to help customers navigate new rules and tariffs arising from the U.K.’s withdrawal from the European Union. Launched 21 months before Brexit took effect, the portal quickly became the go-to technology for customers. It allows for the processing of customs declarations without the need to deal with brokers. The solution is available around the clock and continuously updates the latest security patches.

The rise of e-commerce has put pressure on Portugal’s postal service. To address this, developers spent three months creating a new website to facilitate the influx of overseas parcels. The new website helps streamline customs clearance procedures. This has resulted in a 75% reduction in the duration of customs clearance services.

Companies aren't powerless to implement digital solutions to reduce key bottlenecks for their operations and customers. With the global logistics logjam showing no signs of easing, businesses should look to tech-solutions to ease pain points and accelerate growth.