May 23, 2018 - 3:45pm

Global Supply Chains Must Evolve as the Economy Evolves


Senior Editor, Digital Content

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Packages move down a conveyor belt at the DHL Worldwide Express hub at Cincinnati/Northern Kentucky International Airport.
Packages move down a conveyor belt at the DHL Worldwide Express hub at Cincinnati/Northern Kentucky International Airport.

If you’re of a certain age who lived before the Internet, you've seen tremendous change in shopping.

Ecommerce is now a part of everyday life for most Americans. The Pew Research Center found that nearly 80% of Americans shopped online in 2016.

Change continues. The newest trend is shoppers buying directly from overseas manufacturers. As a result, more packages are coming into the U.S. from overseas, as The Atlantic points out:

The U.S. Postal Service delivered 175 million letters and packages from overseas in the first three months of 2018, up from 97 million in the same period in 2013, according to the USPS.

These changes in shoppers’ behavior are just one example of how global supply chains are evolving. Supply chains are the connections that ensure goods get from factories to customers.

Global supply chains are what allows U.S. companies to take advantage of the skills and specialties of countries all over and helps them successfully compete in the global economy.

As U.S. Chamber President and CEO Tom Donohue said at the Global Supply Chain Summit:

Our manufacturers, logistics providers, pharmaceutical companies, and retailers are able to access new markets because supply chains offer a competitive advantage simply not possible twenty years ago.

Our small- and medium-sized businesses—and even e-Commerce startups—are able to access global markets, thanks to the speed at which our products can reach the global consumer. 

We can modernize and maximize the efficiency of our supply chains by removing barriers at borders, approving more free trade agreements, properly protecting data without impeding it, and fundamentally improving infrastructure, both at home and around the world.

In today's economy, issues like cyber attacks and concerns about data crossing national borders join perennial supply chain concerns like preventing counterfeit products and illicit goods from entering the country.

Lev Kubiak, Vice President and Deputy Chief Security Officer at Pfizer, said on a panel, his company sees 7.3 million counterfeit medications globally.

That is only what law enforcement has found, and that’s just one pharmaceutical company. This is a dangers to patients, and this stems from opacity in the supply chain.

“We don’t generally know who touched something in the supply chain,” said Emile Monette, Cybersecurity Specialist, U.S. Department of Homeland Security.

To get more transparency technology will play an important role. Blockchain, beyond its use in cryptocurrencies, has a role to play in tracking goods along global supply chains.

“Blockchain is something we’re all getting aware of,” said Cynthia Allen, Vice President, FedEx Trade Networks, in a talk on the evolution of supply chains. “The logistics industry will make a move forward with blockchain,” and it could become “a gamechanger in our industry.”

Work is already underway on this. Walmart, Dole, Unilever, IBM, and other companies are working together on using blockchains to improve the “traceability of their foodstuffs, like chicken, chocolate, and bananas,” Fortune reported.

Real time tracking information will help government agencies be more efficient in monitoring what comes into the U.S.

“It’s important that [U.S. Customs and Border Protection] gets enough information,” said Allen, so it can better target and prevent illicit and counterfeit goods from entering the country.

For business of all sizes doing international commerce – either sales, manufacturing, or both – supply chain issues can create headaches that could disrupt the flow of goods, so cooperation between governments and businesses is critical.

“A healthy global supply chain is integral to the health of American businesses and our economy – and it benefits all consumers. We need to protect it, nurture it, and make it a priority,” said Donohue.

Technology, along with free trade agreements and improved infrastructure will improve global supply chains and reduce barriers for businesses to trade with the world, creating American jobs and boosting economic growth.

About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.