ALOM is a global leader in supply chain management serving as a strategic partner to our customers by expertly and seamlessly conducting their key business functions from manufacturing to marketing.
Supply Chain and Free Trade Lessons from 2200 Years Ago
October 16, 2018
By Hannah Kain, ALOM President and CEO
I recently visited Delos, a tiny island in the Greek Archipelago. Now uninhabited, the island houses a wealth of information about ancient supply chain and trade. Delos was super wealthy as the world’s most powerful trading center after the island was declared a free harbor in year 167 BC, some 2200 years ago.
A staggering 570 million tons of goods made it through Delos each year. Traders went there with their goods for sale and buyers went home with their goods. It was a centralized system. Some transparency and risk mitigation of the trade could be obtained because the goods could be inspected and funds traded on the spot, though many goods were traded while on anchored ships and never came ashore.
Today’s supply chains are vastly more complex. Products are manufactured using raw materials and components from hundreds of different locations. They are distributed to thousands of locations using different channels. They are subject to different specifications, compliance requirements and trade regulations. We want our supply chains to be sustainable, to support communities, and to support the corporate branding. Quality is a must. KPIs need to be readily available. Agility – the ability to adjust products, volumes, delivery points – is critical as customer expectations have increased. Of course, there is also the critical element of cost of delivered goods.
More complexity means more risk, and risk management has become increasingly important, but also more complex in itself. Even the old Greek traders understood risk, such as ships lost at sea, piracy, or spoiled goods, but the risks were fairly simple.
Some will argue that the main difference between supply chains of the old world and our world is not complexity, but rather changed expectations and technology.
However, despite much progress, technology is still struggling to keep up with the complexity of supply chains. Listening to the most advanced corporations presenting at the Gartner Supply Chain conference, it was striking how many different and customized systems were deployed, and how difficult it was to remain agile and adjust to external or internal changes. Legacy systems are still a yoke around the shoulders of supply chain professionals. The very definition of legacy systems is interesting to contemplate, as many systems sold even now are based on an old fashioned push model instead of customer demand.
The need for agility competes with the old technology systems. That’s why in many cases, companies are better off outsourcing to providers who have made technology solutions a key element in their supply chain offering.
Over the last 21 years, ALOM has invested heavily in elegant technology solutions to ensure that our customers get agility, transparency through dashboards and alerts, and simplification of complex processes. Employing some of the very best technologist with deep supply chain expertise, ALOM designed its systems for optimal data sharing, protection and respect for privacy. The systems handle not just data, but physical goods, and the financial aspect of the supply chain.
Artificial intelligence, block chain and 3D printing hold many promises for the future, and 3D has already started to deliver. The same goes for improved sensors and batteries, as well as the all-important big data management and increased processing power. Yet, we are still quite some years away from deploying AI for any serious risk management or deploying block chain outside the few experiments currently underway.
Sailing back, I was contemplating my learnings from Delos: How ironic that we still have not learned the 2,200 year old lesson that free trade creates wealth, and trade wars do not.
Visiting Delos also reminded me that running a smooth supply chain must include ethical considerations. Tens of thousands of slaves were traded on Delos, reminding us that one needs to consider not just the ethics of the players in the supply chain, but also the purpose of the product when making ethical decisions.