There have been multiple recent events highlighting the critical significance of a supply chain that can scale and adjust quickly to new scenarios. In the international trade sector, the accidental blocking of the Suez Canal slowed world shipping and completely halted all traffic through a waterway that facilitates 12 percent of all world trade.
On the infrastructure level, devasting cyberattacks targeted critical supply chain infrastructures and led to unforeseen shortages of essential resources. From a productivity standpoint, the logistics sector has had to confront the challenges of the backlog that came from a global pandemic with its labor shortages, lockdowns, and unprecedented demands for certain products.
In the wake of such shortages, it is more important than ever that our supply chain is strengthened and made to work better and faster. For these reasons, it is critical to recognize the role technology contributes to our supply chain’s ability to scale quickly in the event of future challenges.
The technologies that carry promise for supply chain advancements are numerous. Although these technologies cover multiple sectors and accomplish numerous tasks, there is a combined effect that can reduce shortages, increase speed, and facilitate efficiency.
A key technology with the potential to expand supply chain efficiency is the further implementation of automated data analysis. Using a combination of sensors, automated reporting, and location tracking, logistics companies have the ability to capture data trends and increase efficiency.
Furthermore, artificial intelligence (AI) development has created a new frontier as companies can now utilize data through AI. Using AI, logistics companies can predict patterns and respond to supply chain variables as quickly as possible. AI does not just increase efficiency for large logistics companies. AI also opens up new doors for smaller logistics companies that may not have the expertise and workforce for large-scale data analysis.
Building on the power of data collection and analysis, there has also been an uptick in warehouse technologies that use data-driven decision-making to sort inventory, standardize inventory management, and ultimately send off orders for shipping. These technologies also increase the level of production, decrease the incidents of injury, lower labor costs, and improve product traceability.
All of these technologies have a real significance as America continues to face challenges to the supply chain. As many in the nation come to grips with just how far-reaching the inefficiencies in our system are, the solutions that emerging technologies bring to the table are practical tools that could help to meet new challenges.
The free market developed the technologies to push the supply chain into the future, and the free market has the tools to make the supply chain more efficient. Instead of expanding government control of the supply chain and putting more regulations on transportation and logistics, government leaders should pursue policies that will encourage technology innovation and support the free market. As a result, our supply chain just might emerge better than ever before -and even more ready to meet the challenges of tomorrow.