The impact of the 4D printer on the international market

4 Technologies that will change global trade

4 Technologies that will change global trade

The world is changing fast. The growth of the digital economy, changes in international production networks and the speed of transportation are changing the way we conduct foreign trade, making processes more inclusive and efficient. To stay in the market, it is needed to keep up with these new technologies and trends.

Globalization, transport and communication advancements make technologies and know-how cross borders much faster, increasing the growth and innovation potential of many emerging market companies. According to the International Monetary Fund, “between 2004 and 14, the knowledge flows of technology leaders may have generated, for an average sector of the country, about 0.7% of labor productivity growth per year. This is about 40% of the average productivity growth observed between 2004 and 2014.”

Cryptocurrency

Cryptocurrency and the financial decentralization proposed by blockchain will definitely change the way foreign trade happens, as people begin to include this technology in their daily lives. Since it has no central authority, the blockchain is a democratic and transparent system. Learn more about blockchain in our blog.

The chain is maintained by the so-called miners. By constantly watching what happens and what is updated on the system, each of them are able to identify and report malware or fraud, making them responsible for each other’s actions. The network can be accessed anywhere on the globe and every information added is copied as in a chain reaction so that it can no longer be edited. All of this global transaction management, tracking, compliance and non editable truth capabilities will surely change the financial transactions as we know. 

Artificial Intelligence and Machine Learning

Artificial Intelligence and Machine Learning will automate all processes involved in international logistics, as is already the case in other sectors in developed countries such as medicine.

AI will be able to manage vessel and truck traffic at ports, track shipping worldwide, translate ecommerce search queries from one language to another, and respond with translated inventory, for example; The possibilities are endless. In short, this technology will streamline and optimize shipping routes and the entire system will be less prominent to error.

3D printing

3D printers can print any kind of thing using three-dimensional printing technology. When it was created, about 10 years ago, to acquire the technology, it was necessary to spend around 30 thousand dollars. In 2009 it could already be found for five thousand dollars and, today, it is possible to purchase a simple traditional model for less than R$700. This popularization allowed the purchase not only for industrial production, but also for personal use.

There is still a lot of debate regarding the real impact 3D printing will have in international trade. Maybe in the short term, the impact would be close to none, since the reality of mass manufacturing is rather complex. But in a few decades, when 3D printing becomes cheap, faster its mass adoption would decrease 25% in the global trade according to studies. 

Mobile payments

An increasing number of people worldwide is using mobile payments systems such as Alipay in their daily life. World Bank Global Inclusion Database affirms that the access to bank accounts increased by 20% between 2011 and 2014 thanks to mobile phones, especially in emerging economies. Soon enough, companies will start using these systems for their international purchases as well.

Other innovations

We can also mention technologies such as Optical Character Recognition (OCR), used to read container numbers, Radio Frequency Identification (RFID) and QR codes to identify and trace shipments in the improvement of reliability and efficiency of global trade. From basic digitization of trade documents to the technologies cited above will make the opportunities of innovation in international trade endless and many challenges will be overcome. 

These innovations will most likely develop faster than the regulations for the industry. In terms of agreements and regulations, the International Chamber of Commerce have been keeping an eye on the changes to adjust Incoterms for example, but industries and governments also need to start accepting the big impact of technology and start thinking about options to regulate this market. Some national governments are already responding to this transformations, working on increasing the benefits and to mitigate adverse effects.

“As with every technology and solution, there will be bad actors who deliberately try to cheat or find some way to circumvent the system. Governments need to reward individuals and companies that participate and use the systems as intended and, conversely, need to react swiftly and harshly to those that seek to circumvent the system.” says David Mounts to Forbes.

The World Trade Report 2018 also points out to some downsides of the technology on world commerce. As said in the report: “while technological advance and trade-opening continue to yield enormous benefits for economies overall, they can also adversely affect specific groups and regions – a problem which a number of countries are currently struggling to address”.

To keep on improving the purchasing professional’s career in the Digital Era, it becomes essential to develop some fundamental skills and always increase the knowledge regarding innovations. So you are always up to date with the latests trends, on the Soluparts blog we bring valuable information about the impacts of main new technologies on the supply chain and tips to keep your career development on the right track. Here are some articles: 

4 essential skills you need for a successful career

5 tips for purchasing professionals to boost their careers in the post-pandemic

What are complex purchases and how to manage them

 

Corporate cyber-resilience in the purchasing department

Corporate cyber-resilience in the purchasing department

7 strategies for a more resilient Supply Chain

7 strategies for a more resilient Supply Chain

6 tips to develop agile supply chain in your company

6 tips to develop agile supply chain in your company

 

The current economic context, filled with quick transformations, brings a number of challenges to supply chains. Issues such as slowbalization and the effects of the covid-19 pandemic, for example, impact an entire global distribution network for products and materials.

Given this scenario, managers and teams from different areas involved in supply chains need to develop the ability to quickly respond to demands, in addition to managing the new risks and uncertainties that arise. In this sense, an interesting path for companies is the use of agile methodologies in supply chains.

But what are agile supply chains?

According to an article published by Forbes magazine, agile thinking came from software developers, and consists in an alternative project management technique that designs processes by dividing them into small parts. This way, as soon as each small fragment of a project is finalized, it can be tested, validated and even implemented.

This methodology also allows new technologies developed and launched on the market to be immediately incorporated into a project under development. Also, when the dynamic world scenario implies some change in customer behavior, it is possible to redesign the product quickly and create new, refined versions to meet these trends.

Another strong feature of this methodology is the so called iteration (repetition of an action, in this case, testing and additions to the solution), flexibility and collaboration between team members. In addition, the team has more autonomy to make decisions related to its projects, without necessarily needing approvals from people in higher positions in the organization’s hierarchy.

However, considering the reality of supply chains, according to a report produced by Gartner, there is still no consensus on the use of the agile concept.

In short, different notions are shared between academics, researchers and companies, but all argue that the focus should be on breaking traditional paradigms and developing the agile mindset to manage changes in demand and the supply of materials which are necessary for operations – such as the indirect ones.

The following aspects are considered critical to making a supply chain or any other sector agile:

  • Responsiveness: identify and respond quickly to possible changes;
  • Adaptability: adjust processes within the chain according to changes in the scenario;
  • Coordination: knowing how to organize this complex network, composed of different agents and stages;
  • Speed: being able to act quickly in various situations;
  • Flexibility: changing the format of the chain, without resulting in additional expenses or loss of inventory, to meet an unusual situation;
  • Balance: knowing how to balance supply capacities and the needs of those who need the material.

6 Tips for developing an agile supply chain

To be able to implement this change in supply chains, the company needs to be aware of a few important points:

1. Define agile according to your reality:

Being clear about what agile means for your supply chain reality is crucial. Teams must come together and articulate the concept based on the six characteristics mentioned above (responsiveness, adaptability, coordination, speed, flexibility and balance). This step  is necessary to determine the level of importance of each one of them for the company, the maturity of the existing concepts and the necessary actions to improve them.

2. Define agile according to your reality:

Based on the definition, focus on establishing a program to make the supply chain agile from end to end, defining investments, choosing what critical areas to be prioritized and actions that can be replicated, involving the areas that participate in the chain (such as the purchasing sector).

3. Focus your transformation on people:

One of the most critical aspects, which must be worked on by everyone. A change of mentality and the development of new skills need to occur in order to make the employees able to develop and adopt new processes and frameworks. The involvement of all team members is crucial for the successful implementation of the agile mindset, rewarding efficiency and tolerating mistakes during the learning process.

4. Use technology to your advantage:

Consider it as a means to achieve this method, but not the focus. That is, do not prioritize acquiring and adopting the most advanced technology on the market without first focusing on people, processes and data.

5. Sustainability is essential:

Take ownership of the concept to develop socially and environmentally responsible chains, another important trend of the new century. Sustainability has been consolidated as a relevant element of competition, a requirement for regulatory restrictions and an opportunity for the development of more sustainable communities.

Therefore, it is a challenge for everyone to think about how sustainability can assist in the improvement of agile chains. For example, for the procurement sector, there are a number of advantages to making sustainable purchases.

6. Develop contracts with agile suppliers:

Until recent years, under a supply chain perspective,  risk has always been treated as something to be avoided. Today, it is seen as part of the process, along with the strategy of having ready solutions to deal with different crisis scenarios. One of the strategies to mitigate them is the so-called  redundancy – also known as having a series of suppliers available to fulfill an order.

In the agile context, it is important to have relationships with suppliers who accept to have more flexibility to serve in a constantly changing market and also to define contracts more aligned to this reality (such as smart contracts, made entirely online, generating reliability for transactions of this type).

Talking about contracts that serve you more flexibly, learn more about the annual option offered by Soluparts.

Conclusion

According to Mark Hermans, director of PwC, issues such as geopolitical tensions, changes in trade agreements and climate change, combined with the constant drive to reduce costs and improve productivity, will promote an increase in risks, uncertainties and pressures for performance.

Under this perspective, supply chains must, more than ever, be quick to respond to these changes. Faced with a world in constant transformation, the implementation of an agile mindset for supply chains becomes essential.

Several authors and courses on the subject focus on agile methodologies, which are many, Scrum, Lean, Kanban and Smart, among others, but experts on the subject say that before adopting or adapting one of these methodologies to their specific context, it is necessary to first break the way of traditional thinking and working so that the whole team develops an agile mindset, otherwise the implementation of the methodology, no matter what it may be, may not be successful. And it is in this change of mentality and paradigm that we focus on this article.

In order to measure the success of this initiative, it is important to collect, organize, analyze and monitor data and information (learn more about how to do this) of the following aspects: concern with the time to fulfill an order, costs involved, flexibility and compliance with deliveries.

It is also necessary to be careful with: the management of the people involved, who need to adopt an agile mentality in their routine; the definition of processes, being open to possible changes when necessary; and the use of data to plan activities and improvements to be carried out, with the support of technological resources.

Follow the trends about the future of supply chains on Soluparts blog.

 

Papel da Experiencia Imersiva na Cadeia de Suprimentos Moderna

Immersive Technologies in Supply-Chain management

It is widely known that there are a number of technologies that will change the way we work in the supply chain. According to a report prepared in 2020 by Gartner, immersive experiences are a technological trend that withhold potential to radically change the sector, with new models and processes able to amplify human capabilities.

In this post, we’ll discuss the benefits of immersive experiences in supply-chain management, which are already recognized by many companies, as well as the challenges and barriers to its full implementation and development.

What are immersive experiences?

An immersive experience can be defined as a situation in which a person has the perception of being in a virtual location, that is, in an environment different from what one is actually experiencing. For it to be realistic, it must involve the senses of sight, touch and hearing.

We can summarize the main types of immersive experiences as follows:

Virtual Reality (VR):

The virtual environment completely replaces the physical, with no interaction with the real world. Example: a computer game that uses special glasses and headphones. These equipment make the player, represented by a character, immerse in the virtual world of this experience. What makes all this realistic is the control the participant has over his avatar.

Another example is the simulator used in driving classes for motor vehicles and piloting aircraft and helicopters. When using this machine, the student has the feeling of driving a vehicle or on board an airplane, allowing him to test the commands learned.

Augmented Reality (AR):

Its technology corresponds to the superimposition of virtual content with a live broadcast image of the real world. It is useful for providing additional information while completing tasks in the real world.

An example is to receive guidance or even test a specific product during your purchase, such as trying on clothes in a virtual mirror. This technology can also be used in the projection of instructions to repair the car in front of the hood, for example, making it easier to follow them.

Mixed Reality (RM):

As the name implies, it is the combination of RV and RA. It can be considered, in a way, an advanced form of AR, since the technology allows users to fully interact with virtual items superimposed on the real world. In the example of repairing a car, mentioned above, instead of changing and controlling the images and information projected on the computer, it would be possible to interact with the projection itself.

Creating an immersive experience

Creating an immersive experience is complex and requires highly qualified professionals. But there are three factors or components, fundamental to this creation:

  • An electronic device (such as a smartphone, pair of 3D glasses, headphones or a virtual work environment);
  • The ability to create or expand the virtual world as the user interacts with this reality;
  • The possibility of superimposing aspects of the virtual world to the user’s view of the real world.

In addition to in-depth knowledge of technology and equipment, having accurate information about the user’s profile and the context in which the experience will be applied are essential. For applications in the logistics area, for example, it is important to know in depth the challenges of the field and implement it gradually, creating and testing simpler versions of the application before developing its final version.

Immersive experiences in supply chain

According to a study developed by Deloitte, since its creation, in the mid-1950s, Virtual Reality has been developing rapidly in recent years, ceasing to be a niche technology. However, these innovations, which promote the improvement of equipment and synchronization of human and virtual activities, have not yet reached operational maturity for large-scale implementation, encountering difficulties related to a broader application for industries and users.

In the case of VR, we can mention some uses: for example, in tracking goods within stocks, the glasses that use the “inside-out” technology (with cameras and sensors attached to the device itself) are able to determine the position and orientation of the surrounding environment with great precision. In this way, the employee who uses this device is able to work in the stock, and even move goods through the control of robots, without being in person at the warehouse (see a video on this case).

There are still barriers related to computational power, price, security and user perception. However, companies in the field of development of more advanced hardware and softwares are making heavy investments in order to reduce these difficulties.

The study in question also raises some benefits of using immersive experiences in supply chains:

1. Less processes and faster product design time:

Teams around the world can work together on the design of products and processes through immersive experiences. In addition, there’s no need to produce a physical prototype, so experimentation costs are reduced. In the design of a production line, for example, it’s possible to produce virtual simulations of its different stages before implementing it. Consequently, you learn collaboratively what the processes are and get insights on how to optimize it.

2. Visualization of complex data and reducing the risk of operational problems:

The adoption of RV and RA also becomes an option for obtaining and digitizing information, along with other existing technologies, reducing the possibility of technical difficulties (such as the loss of a batch of products) to happen in stages of the supply chain.

In addition, when using 3D technologies, the organization is increasingly supported by data (of different types and levels of complexity) to plan its activities and processes. For example, when testing AR technology in inventories, it becomes easier to access information about the position of a particular product, optimizing the search process. In addition, the use of printed checklists of the selected materials is eliminated, giving greater control of the stock.

3. Increase in training efficiency:

Studies show the efficiency in applying virtual reality and augmented reality to the learning processes, offering important tools for teaching the best practices related to decision making (simulating real situations that require action) and learning procedures from attempt and error with low risk. Also, shared visualization and interaction through avatars and simulations in real time bring a series of insights to optimize supply chains. We can mention the realization of training simulating high risk scenarios, allowing the teams to identify, prioritize and analyze variables, reducing the risks of the task in the real world.

It’s important to note that there must be criteria for the evaluation and implementation of this type of technology, meaning, an understanding of how it will be used and will connect with existing systems. In addition, it is suggested that the company carry out small pilots to validate applications that can have immediate benefits and scalability.

You should also be aware of issues such as:

  • Functional implementation (which areas and functions should be prioritized);
  • The existence of technological infrastructure and a specialized team in this field, in a way that everything works correctly – this is an important point, since few professionals in the market dominate this type of technology;
  • Information security and regulations (whether new laws will be drafted or current ones, such as intellectual property, will be adapted to the virtual environment);
  • The operation of these devices and the perception of their users (in order to avoid health problems).

Cases of VR and AR applied to Supply-Chain Management

There are several cases of success involving companies that are already using this technology applied to supply chain:

  • Automotive companies, such as FIAT, offer virtual test drives and make changes to the design of their cars from immersive experiences (video);
  • As mentioned earlier, logistics’ teams use equipment to facilitate the location and access to information about a material in the warehouse (video 1 and video 2);
  • Companies from different branches already use these technologies to train teams, by simulating situations (video);
  • Tests have also been carried out to simulate the supply of markets using VR and robots, avoiding risks to employee’s health (video).

In addition to these examples, there are numbers that reinforce the relevance of this technology: according to projections released in 2019, the global market for Virtual Reality and Augmented Reality is expected to generate approximately US $ 100 billion (R $ 376 billion) in 2020. This figure probably suffered changes in the face of the Covid-19 pandemic, but reveals an unquestionable importance of VR and AR.

Challenges of immersive experience

Although these experiments are more frequent in some areas (such as entertainment), they can bring a series of benefits to different industries and even reduce costs in the long run. Also, there are some crucial elements that strongly impact the implementation of immersive experience in companies, being the cultural factor one of the most important of them, since the assimilation of disruptive technologies takes time to happen, and can only be seen, in many cases, in the long run. It is alleged that VR and AR came “before their time”, as there is still a lot of difficulty and resistance to use.

Experts who analyze changes in technological paradigms say that people respond in different ways to the need to learn to deal with disruptive technologies: while there are early adopters, who use new technology without difficulty, there are also laggards, which resist the change and only adopt the use when they are obliged (sometimes, because they have great difficulties in understanding it).

Thus, it is important that the implementation of these solutions is aligned with the company’s operational need, the budget available for its implementation and maintenance and the company’s reality (considering the cultural dimension). In other words, do not adopt it only because it’s something trendy to have.

In addition to the technologies related to the immersive experience, several others have influenced the global supply chain. To learn about these other trends and their applications, follow Soluparts Blog.

 

Blockchain em compras e na cadeia de suprimentos

Blockchain in procurement and the supply chain

Those who work in the purchasing and supply chain area have probably heard about cryptocurrency, bitcoin and blockchain.

With the rise of digital currency (bitcoin being the best known) in global trade, many companies begin to apply this technology in their operations in order to modernize, streamline and optimize processes. This ultimately brings new concepts and services to be replicated as demand requires.

The blockchain concept is relatively new and, in a simplified way, can be defined as a series of immutable data records, managed by a decentralized computer system that does not belong to any entity, this block of information is protected and linked to each other, using encryption.

Since this is a service that still generates many doubts and uncertainties, we have created this article to unveil this concept and its application in the purchasing department and supply chain.

What is Blockchain after all?

Before conceptualizing this technology, we need to talk briefly about bitcoin.

Decentralized cryptography – or electronic money – has been in use since 2008, when it was presented in The Cryptography Mailing discussion group by a programmer or group of programmers under the pseudonym Satoshi Nakamoto. 

Bitcoin is considered the world’s first digital-decentralized currency, creating an alternative economic system. The currency does not need third parties to function, i.e. it does not depend on banks, large corporations or governments for the money to be moved.

Financial transactions with bitcoin are recorded in a distributed database – an extremely secure, decentralized network without a central management entity structure called a blockchain.

To illustrate, we can compare the blockchain to a public ledger (or accounting book) that records virtual currency transactions in a reliable and unchanging manner. It records information such as: the amount of currency traded, who sent it, who received it, when this transaction was made, and where in the book it is registered.

The service stores transaction information in blocks, stamping each block with a time and date record, thus being a chain of blocks. And what makes it so special is that it is not subject to a specific authority, but is a system in which the information is open to everyone who is part of it – everyone involved is responsible for their actions.

The main advantage of the service is that, with it, transactions are transparent, blocked and protected through encryption, making any attempt at fraud extremely difficult – but it’s good to point out that this does not make the system completely secure.

And since any modernization that brings agility and greater security to the purchasing process is beneficial, blockchain technology is increasingly seen as a potential market disrupter in purchasing and the supply chain.

Applying Blockchain in the purchasing department

According to MarketsAndMarkets consultancy, the blockchain market is expected to grow a lot in the coming years – the sector’s turnover will rise from $1.2 billion to $23.3 billion globally and the annual growth rate is 80.2%. Gartner has positioned the blockchain with great growth viability in the next five to ten years.

As we can see, innovations based on this technology are promising, with several ways and reasons for it to be applied in purchasing processes and supply chain. Let’s look at some of them:

A) Intelligent Contracts

Blockchain in purchasing allows the creation of intelligent contracts that are tamper-proof and automate actions to meet predetermined conditions. For example, payment terms incorporated into the contract automatically generate incoming and outgoing payment invoice notifications based on the approved data stored in the blockchain, eliminating the need for the supplier to issue the invoice and for the purchaser to validate it.

B) Information Reliability

The blockchain, as the name suggests, is a chain of blocks that stores digital information. For a new information to be incorporated into your database, you need to go through 3 steps:

  1. A transaction: an individual transaction is incorporated into a block that joins others to form a secure network of chained blocks, all of which carry a unique content. The big difference is that the later block adds its own content to the previous block’s fingerprint, generating its own fingerprint – and so on;
  2. Transaction verification: a computer network verifies each transaction to make sure it occurred as informed by the person responsible for the transaction. Only then is the process confirmed, joining thousands of other similar processes;
  3. Transaction identification with a code: finally the transaction receives an identification code, called a hash, and the block is added to the blockchain. The hash works as a kind of seal, if the block is changed, the hash changes, which invalidates that block.

After all these steps, the information is recorded in the ledger, from where it cannot be deleted.

In addition, each blockchain network has “nodes” that bring together participants for the same purpose – for example, bitcoin “nodes” are used to transfer money. And every time a person can validate a block or identify an error in the network, they receive a reward. These blockchain sentinels are called miners.

With all these precautions, the risks associated to traditional databases no longer exist, which offers security in the information exchanged via the blockchain and also making data tracking easier.

C) More transparency

Blockchain technology in purchasing also increases transparency throughout the process, since the record of all transactions cannot be changed by anyone without identifying the change. And if a transaction is malicious, it can be identified and treated before it becomes a damage to the business. Inspecting the network’s actions and pointing out suspicious modifications is another of the miners’ competencies.

Examples of blockchain in use in the supply chain

The use of blockchain in the supply chain is already a reality and has been creating benefits for many companies.

In the food and beverage industry, for example, Walmart’s supermarket chain has joined with IBM to track pork from China. Unilever, Nestlé and Dole have also used IBM’s experience and adopted IBM’s Blockchain to improve the traceability of foods such as bananas, chocolate and chicken – the blockchain records the origin of each item, where it is stored and its expiration date.

It has also been helping to track all stages of the global coffee trade, from farmer to consumer, collaborating to ensure the origin of the product and to reach a fairer price to the final consumer. Ireland’s Moyee Coffee was one of the first companies to innovate and use the technology.

It is clear that blockchain in purchasing and the supply chain will enable advances ranging from fraud protection to speed in the purchasing process. And even if innovation does not happen overnight, it is worth thinking about how to incorporate this technology into your company so that it will come out ahead.

Also, take the opportunity to optimize the purchasing process with Soluparts‘ experience. Present in five countries and negotiating with the world’s largest suppliers, our experts will guarantee you the best business conditions.

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