Efficiently Managed Supply Chain

Recently, I finished watching the film China's New Silk Road. No medium before it has driven home and reinforced the idea of how well a connected and efficiently managed supply chain looks. It should serve as a wake-up call to western companies and organizations that experience so many delays, missed delivery dates, poor supplier performance, and miscommunication at all levels.

 

Java Films distributes the documentary on both Vimeo and Amazon. The film explores the billions of dollars worth of investment by the People's Republic of China into the Belt and Road Initiative. According to a 2019 Bloomberg article citing Morgan Stanley, the initiative will cost an "...estimated spending of a $1.3 trillion total by 2027."

 

China's New Silk Road begins by introducing the viewer to the scene of "kilometer zero." A logistics park and beginning origin of the Chongqing-Xinjiang Railway'' where the first train departed for Europe in March of 2014 as part of China's New Silk Road initiative. This passenger and rail freight route spans across 11,179 kilometers or 6946 Miles from Chongqing, China, to Duisberg, Germany; a network that crosses the Asia landmass into western Europe's heartland. Freight and goods leaving an approximate 30 million people populated city of Chongqing, China reaches their destination in two weeks. The improvement resulted in a cheaper, faster, safer, and most importantly, a reliable service over container ship transportation, beating the 36-day transport period.

 

It's not just the transportation infrastructure that is impressive; the film highlights the effort and energy invested by the Chinese government. Billions of dollars worth of goods and tons of cargo are methodically transported around-the-clock in a highly orchestrated operation. The project is organized and funded at the highest levels of government. 

Not only is the railway network meticulously planned and organized down to the minute, but also the container ship and port operations around the globe too. I could not help but appreciate the efficiency of this centrally managed vast supply chain network. Strongly reinforced into every worker along this belt and road initiative is timeliness; delays are unacceptable. Communication appears to be critical in every aspect.

 

And yet, from my observations, delays and poor on-time performance is typical in western production supply chains. The result is a flawed and increasingly frustrating system that appears broken and beyond repair. By no means am I signaling that the answer is to organize centrally by implementing an autocratic federalized system. Instead, the takeaway should be how well inter-connected planning systems can efficiently communicate and manage logistics and resources. Today, our supply chain comprises a distributed and decentralized network of manufacturers, producers, storage, and transportation organizations. Each with disparate systems and managed independently. 

 

Communication is slow between entities; phone calls, emails, and faxes are transmitted, answered only during "business hours." Depending on regional location, only God and maybe Google knows when that may be. Managers organize captive meetings with internal and external parties to repeatedly ask the same question, "what's the status?" or "where are we with this?" The hostages' wonder, "could this meeting have been an email?" When, in fact, it was, but no-one bothered to read the email in the first place.

 

Folks have tried various approaches to integrating separate information systems. Many are still in place, but with only some degrees of success. Technology vendors promise a dizzying array of solutions such as email workflow automation, Enterprise Application Programming Interfaces(APIs), and Extract Transform Loads (ETLs) from the numerous Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) databases.

At this point, you're probably thinking... wait for it. The author of this article is about to say it.

 

"Blockchain".

 

"There it is", as a collective audience sighs and eye-rolls at the overly used and abused promised solution. 

Before you head for the exit door, hear me out; distributed ledger technology does enable automatic business transactions with verification, validation, transparency, immutability, and provenance. 

 

Please don't take my word for it. I encourage you to try out the platform for free. Here at SIMBA Chain, we enable an easier way to adopt and implement your ideas and mine, supporting a more efficient and effective business network. Lastly, check out the film for yourself and see if you come to the same conclusion.

 

 

 

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