The East is Out-Innovating the West in Supply Chain

Sept. 19, 2014
Supply chain technology is advancing so rapidly, with so many game-changing innovations, that the Eastern hemisphere now holds an advantage over the West.

In Brazil, when meetings run late, it’s nevertheless considered quite rude to leave early. That’s an important rule of etiquette to remember if traveling in South America, but I had to applaud Nick Vyas, director of the USC Marshall Center for Global Supply Chain Management, for bringing it up at the beginning of his presentation at the recent Dematic Material Handling & Logistics Conference in Park City, Utah. In as subtle a manner as possible, Vyas ensured that nobody would be leaving his session early, either. As a speaker myself at the conference later in the day, I was most appreciative for that.

Vyas’ presentation, actually, focused mainly on global growth, and how the formerly dominant economies of the Western hemisphere are being supplanted by the increasingly nimble economies of the East. “China will be a bigger market for Apple’s products than the United States within the next 10 years,” he predicts.

Strategic supply chain management, Vyas says, “is more critical than ever to the bottom line,” particularly due to consumers’ need for speed. “Customers want free or inexpensive shipments now, so companies must be able to handle returns quickly. Their supply chain footprint must be designed to provide faster delivery at a lower cost.”

While various federal agencies dither about whether to allow delivery drones in the U.S., countries like China are just going ahead and are already using drones to facilitate deliveries in some areas. “The East is innovating ahead of the West these days,” Vyas emphasizes.

And drones are just one of several key technological advancements that Vyas sees as having immediate impact on global supply chains. 3-D printing, for instance, he refers to as “a game-changer” because of its potential to drastically reduce the lead-time from prototype to production. “3-D printing,” he says, “will improve and simplify the supplier qualification process; reduce the need for shipping products across the world, and enable products to be fabricated locally, near the end-customer.”

Other technologies that will have major influence on supply chains include social media, which he points out, companies are now using “to capture customer insights to help them more effectively plan product placement and assortment.” Vyas is also fascinated by SourceMap, a crowdsourced directory of supply chains and environmental footprints which he likens to “a YouTube for supply chains.”

Supply chains will evolve as rapidly in the next 20 years as they did over the previous 250 years, he believes. “In the past, disruptive technology changes came along once every couple hundred years,” Vyas notes. “Now, they come multiple times per generation.”