Global Trade Network: A Strategic, Competitive Asset

Q: Why do companies have such a hard time embracing global trade management?

A: The Amazon effect is wreaking havoc on supply chains globally. Consumers are buying online from everywhere in the world and expecting delivery in one to two days. International shipping presents real challenges for suppliers and shippers attempting to keep up with the velocity expectations of these consumers. Following the traditional supply chain model feels safe and comfortable—like your favorite pair of sneakers. But over time, those sneakers wear down and stop supporting your feet as they once did. Companies are realizing they must change their mindset to remain competitive. Embracing a global trade network model removes some of the constraints that make global trade management a challenge.

In the traditional supply chain model, the supply chain is viewed as a cost center. A global trade network is viewed as a strategic, competitive asset. Gone are the days of only planning and executing the shipment booking through the delivery process. Now the attention is directed to streamlining the entire order life cycle, ranging from purchasing order management to import/export compliance in order to deliver the best customer experience.

In the old model, stand-alone supply chains were focused on internal automation for cost-cutting and time-saving measures. The problem is stand-alone supply chains still rely on partners that reside outside their system. When things change with their partners, not only are those changes impossible to see but the effects of the change create chaos. This chaos increases the cost to serve customers and forces partners to add inventory buffers into their supply chains.

The competitive advantage achieved through a global trade network is connecting partners using real-time data and speed to ensure everyone is on the same page. The interconnectivity removes barriers created from static linear processes and allows a supply chain to function as a dynamic living ecosystem where each action gets an immediate reaction to streamline processes. The cost to serve goes lower while customer service improves.

Q: Are there other advantages?

A: Another advantage to the global trade network model is the amount of actionable intelligence the network can provide to help make better business decisions. It eliminates black holes and guesswork by providing real-time data on what is happening in the supply chain. The analytics can be used to enhance optimization opportunities so companies can expand beyond their own network.

Companies interested in adapting the modern global trade network model need to start by self-assessing their current network strength. The technology to support a global trade network is available today. It’s just a matter of looking at supply chain design in a new way.