Enhancing Global Trade Efficiency, Inclusivity, and Equity Through Technology

The management of supply chains has become an increasingly complex task as they grow longer and more interconnected. External factors such as market volatility, pandemic-induced disruptions, and a growing emphasis on environmental sustainability have led to regionalization and a need for optimization. This has given rise to trade technologies designed to enhance the resilience of supply chains, aiming to make global trade more efficient, inclusive, and equitable. While the full integration of these technologies into the trade ecosystem may take time, it is essential to explore the available solutions and their potential benefits.

In December 2020, the World Economic Forum’s global survey identified five emerging technologies: Internet of Things (IoT) in supply chains, digital payments, e-commerce platforms, cloud computing, and 5G. These technologies hold the promise of transforming the traditional international trade landscape.

These cutting-edge technologies not only facilitate buyer-seller discovery platforms but also enable service providers, including trade financiers, insurance providers, and logistics companies, to enhance communication and interoperability within the ecosystem. In simple terms, technology has the potential to make cross-border trade more efficient, inclusive, and equitable for small and medium-sized businesses (SMBs) around the world.

AI-Enabled Supply Chains

Small companies are increasingly adopting artificial intelligence (AI)-based solutions to elevate their supply chain management. These solutions encompass demand forecasting models, end-to-end transparency, dynamic planning optimization to manage inventory, and automation to reduce waste. These elements are critical for building predictive models and conducting correlation analysis to understand the causes and effects of supply chain performance.

Furthermore, as data becomes more accessible, data-driven technologies and correlation/predictive analytics can predict customer behavior and improve supply chains. While predictive analytics has been available for some time, it has become more affordable for SMBs in recent years, fostering a new generation of tech-savvy and innovative entrepreneurs. Research also indicates that successful implementation of AI-enabled supply chain management has enabled early adopters to reduce logistics costs by 15%, lower inventory levels by 35%, and enhance service levels by 65%.

In response to supply chain challenges, more SMBs are committed to leveraging modern technologies to offer scalable and user-friendly digital experiences for employees and customers, thereby addressing supply chain constraints. Companies are exploring innovative solutions, from creating cloud-based applications for routine tasks to establishing information systems that offer real-time insights on port call estimates.

Blockchain

A blockchain-powered supply chain can systematically document shipment and transaction records, capturing details such as price, date, location, quality, and certification of goods. This fosters improved supply chain transparency, enhanced traceability, reduced administrative costs, and compliance, ultimately enhancing a company’s reputation. Moreover, blockchain ensures that all supply chain stakeholders can access the same information digitally, reducing the potential for miscommunication and human errors during complex paperwork and data transfer.

The integration of blockchain and AI technologies reduces the reliance on physical documentation, such as receipts, invoices, tax forms, contracts, and financial reports, allowing SMBs to connect with external stakeholders in the ecosystem for seamless communication. This innovation drives industry progress and promotes global trade.

IoT

Internet of Things (IoT) inventory systems enable the real-time monitoring of critical elements in supply chains to support informed business decisions and prevent shortages. In addition, IoT sensors can analyze various performance metrics of machines critical to modern supply chains. For instance, predictive maintenance within the supply chain allows businesses to proactively address equipment breakdowns, extending the equipment’s lifespan.

Digital Payments

Traditional trade and supply chain processes involve multiple interconnected participants, often requiring manual verification of information, which can slow down payment processing. Distributed ledgers, functioning as secure, shared databases with copies accessible to all participants, validate funds transfers and shipment information instantly, offering a faster, cheaper, and more secure alternative to manual systems. These innovations can also significantly reduce the current $3.4 trillion global trade financing gap, which particularly affects SMBs lacking extensive financial records.

Cloud Computing

Optimized supply chain cloud platforms can be used to create tools and mechanisms for connecting stakeholders like importers, exporters, insurance providers, and transport carriers, enhancing communication and standardizing processes on a global scale.

Tech-Based Logistics

Smart packaging solutions enable product tracking and provide real-time information to delivery partners and shippers, addressing the demand for security and safety during transit. These initiatives also assist companies in improving sales, reducing expenses, and enhancing key logistics processes while reducing theft and waste.

Conclusion

In our increasingly interconnected world, the significance of global supply chains cannot be overstated. Trade-tech solutions, as mentioned above, are poised to play a pivotal role in international trade. They represent a digital path forward for the trade ecosystem, aiming to achieve greater efficiency, inclusivity, and equity.