Written by: Comunicación Corporativa
The world is rapidly changing by 3 forces: technology, globalization and climate change. In addition three structural developments make the change possible: the introduction of smart phones, the expansion of bandwidth and connectivity through the cloud. These changes have an impact on the global supply chain.
Consider these three events that were not glimpsed 24 months ago: Trump and the renegotiation of tariffs, incentives to manufacture in the US; the Brexit threatening the European Community and the militarization of the islands in the South China Sea, which could change the rules of international shipping lines (1/3 of global shipments go through there). From the point of view of the supply chain, we must be attentive to four forces: technology, consumers, the labor force and the logistics infrastructure.
What is changing?
Manufacturing in the United States is increasing, but with 1.5 million fewer workers. Work is being automated, saving employees time. Artificial intelligence is redesigning work in operations. Businesses have only executed 18% of their digital potential. The cargo agency is entering the digital stage. The Blockchain is no longer only for bitcoins or fintechs (Walmart is testing its supply chain to add structure to its processes).
In 2016 Zara went from concept design to its stores in 25 days (11 of those days were manufacturing). Gap has reduced the concept time to the store from 10 to 8 months. There is a shift in stores from “having inventory” to managing an “inventory flow” (thanks to interconnection, bandwidth and technology). The warehouses are becoming more sophisticated and go towards robotic automation. The stores are being seen as mini distribution centers (the 2016 Target delivered orders from 1,000 stores, from 460 the previous year).
In 2016 Amazon was 28% of all e-commerce. In the holidays of that year said company was 38% of all the e-commerce (its closest competitor was Best Buy, with 4%, and Walmart, with 3%). Amazon is creating alternative deliveries to UPS, Fedex and the US mail. In 2013 the drones were considered a fact for deliveries when Jeff Bezos spoke in an interview (now that prognosis is not so true).
The cost structure of e-commerce is still challenged by the “free distribution” (returns are the biggest obstacle to the success of e-commerce). The Gig economy, the shared and demand are here to stay (some say that the 3 are the same). Some businesses no longer need assets or employees.
In 2012 Ford’s board considered frivolous autonomous vehicles, in 2016 Ford expected to have the largest fleet of autonomous vehicles on the market. That same year California declared Uber’s self-managed cars illegal, which moved its evidence to another state.
It is very difficult to find work because employers demand skills that they did not ask for before (the ability to adapt to new technologies). Amazon only needs two days to train a temporary worker in the warehouse (touch screens and robots help a lot).
This may be a partial list of the changes that are happening, but the amplitude, speed and degree of the change are going to make us more of a headache and, in addition, the difference between the winners and the losers is being made every time more espacious.
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