Hello everyone, welcome to Business School 101. Boeing is best known for manufacturing commercial and military airplanes. A single Boeing airplane can be made up of more than 3 million parts. In order to run such a large operation, more than 140,000 people are employed by Boeing in over 60 countries. There are also hundreds of thousands more working for Boeing suppliers across the globe. Without a reliable supply chain management system, Boeing could never have become so successful and influential in the global marketplace.
Impacted by the COVID-19 global pandemic, more and more companies start to realize the importance of the global supply chain. So what exactly is the supply chain? What are the major benefits of the global supply chain?
How could emerging new technologies influence the global supply chain in the future? In this video I will discuss these questions with you. Section 1. What is a supply chain?
A supply chain is the network between a company and its suppliers created to produce and distribute a specific product to the final buyer. This network is made up of different activities, people, entities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the customer.
Compared with local supply chains, Global supply chains are networks that can span across multiple continents and countries for the purpose of sourcing and supplying goods and services. Global supply chains involve the flow of information, processes, and resources across the globe. Section 2. Benefits of Global Supply Chain In general, global supply chains have five major benefits. First, customer satisfaction.
To win customer loyalty, companies need to have a supply chain that can deliver what customers want on time. Global supply chain management and close supplier relationships empower companies to leave room for special orders in times of high demand. It also reduces the amount of stock that needs to be retained in the inventory and saves costs for companies.
Second, broader perspective. This is one of the most interesting benefits of global supply chain management. A global supply chain widens the scope of learning for people willing to learn new business processes.
It broadens the horizons of learning and gives ideas to solve problems through innovative ways as business is done differently in different parts of the world. Third, 24-7 availability. Since different countries have different time zones, the work never stops. There are always people working to meet the supply chain requirements on different continents and at different times.
This is one of the major advantages of global supply chain management for companies. Fourth, sourcing opportunities. A global market offers opportunities to select higher quality or lower cost options of goods and services.
It offers businesses the opportunity to choose the best suppliers, materials, and products at good prices. It not only ensures economic viability for businesses, but also lets them meet a high standard of quality. Fifth, new markets. Apart from identifying better sourcing opportunities, global supply chain management offers companies the opportunity to expand their business to new locations.
Companies just need to up their game and plan their resources strategically to open up new businesses in different countries. This will help them to expand sales globally and provide access to a bigger pool of customers. Section 3. Emerging Technologies in the Global Supply Chain Global supply chains have become highly complicated and crucial for many businesses to stay competitive.
The interconnected and sophisticated nature of cross-body supply chains makes them vulnerable to multiple risks including cybersecurity threats, delays, unforeseen events like COVID-19, and many other adverse impacts. Luckily, emerging global supply chain technology can drastically increase visibility across the entire chain, making it agile and resilient. According to Forbes Insights, almost two-thirds of surveyed companies see the benefits of leveraging new technologies like Internet of Things, artificial intelligence, machine learning, and blockchain.
These technologies can give businesses great visibility and control across all logistics processes. Let's discuss each of these in more detail. Number one, Internet of Things, also known as IoT.
The Internet of Things is a collection of interconnected physical devices that can monitor, report on, and send and exchange data. IoT devices are typically connected to computer systems via data or Wi-Fi networks. IoT devices use sensors to measure specific aspects of the world around them, including location, temperature, humidity, light levels, movement, handling, speed of movement, and other environmental factors.
IoT devices come in many form factors including chips, smart devices, and mobile sensors. In the supply chain, Internet of Things devices are an effective way to track and authenticate products and shipments using GPS and other technologies. They can also monitor the storage conditions of products which enhances quality management throughout the supply chain. IOT devices are a major benefit for various industries of supply chain management.
For example, farmers can use IOT devices to monitor soil moisture and decide the optimum time to plant or harvest. Manufacturers can use IOT-enabled cameras to spot defects and reject faulty products. Retailers can also work with specialist logistics fleets to track products as they're en route to distribution centers.
Number two. Artificial Intelligence and Machine Learning Artificial Intelligence, or AI, is a wide-ranging branch of computer science concerned with building smart machines capable of performing tasks that typically require human intelligence. The benefits of applying AI to complex operational data include enhanced visibility into the supply chain, faster decision-making, reduced cycle times, predictive analysis of big data, improved quality, productivity, and output, greater supply chain resilience, and the ability to continuously tweak and improve companies'processes based on real-time insights into system performance. For example, Geek Plus is a global logistics technology company located in Beijing, China. Its AI-powered smart warehouse product provides a comprehensive, real-time view of warehouse operations throughout the entire process.
When goods enter the logistics center, They immediately undergo data monitoring and analysis. This information is compared against historical inventory data to determine the optimal storage method, and the system chooses the location, the robots are to be used, and at what precise time. Smart Warehouse also handles assigning tasks to human workers, ensuring optimized collaboration between humans and machines throughout the facility. A report from market analyst McKinsey found that 61% of executives report decreased costs and 53% report increased revenues as a direct result of introducing AI into their supply chains. Number three, blockchain.
A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. A blockchain supply chain can help participants record price, date, location, quality, certification, and other relevant information to manage the supply chain more effectively. The availability of this information within blockchain can increase traceability of the material supply chain, lower losses from counterfeit and the grey market, and improve visibility and compliance over outsourced contract manufacturing.
Bitcoin, the earliest blockchain implementation, triggered widespread experimentation of blockchain, particularly in financial services. As blockchain gains publicity, large corporations and startups are exploring uses of the technology outside of the financial services industry. Many organizations are already experimenting with blockchain innovations to fulfill a range of needs.
For example, Provenance, a supply chain transparency startup in London, UK, completed a six-month pilot for tracking responsible sourcing of tuna in Indonesia via blockchain. Monograph, a startup launched in 2014, uses blockchain to secure the usage and sharing rights of digital media, such as video clips or brand-sponsored content, and enables sharing of revenue across some media creators, publishers, and distributors. Now, let's do a quick review of today's topic. Global supply chains are networks that can span across multiple continents and countries for the purpose of sourcing and supplying goods and services. Compared with traditional local supply chains, they have five major benefits for companies.
Customer satisfaction, broader perspective, 24-7 availability, sourcing opportunities, and new markets. In addition, many disruptive technologies such as Internet of Things, artificial intelligence, machine learning, and blockchain also provide companies greater visibility and control across their global supply chains. So, what do you think about the future of the global supply chain? Please leave your thoughts in a comment below.
And if you liked this video, please give it a thumbs up and subscribe to my channel. Thank you for watching, and I will see you next time.