Thursday, February 07, 2013

The Role of Technology Within Supply Chains

The vegetables on a typical grocery store shelf in 2013 most likely did not come straight from a family-owned farm. In the olden days this was much more common, but with growing population and product demand, business around the world has changed. The items in grocery stores nowadays have usually taken a very long, interesting and methodical process to reach the eyesight of consumers.

This is made possible by the food supply chain, which keeps the global market moving and keeps customers around the planet satisfied. As processes, manufacturing and delivery have grown to new heights and the use of technology in supply chains has blossomed.

What used to be a simple assembly line and delivery operation is long gone, and now we are surrounded by extensive operations on every corner. Below I have listed the two main ways that supply chains have used technology to grow and become more efficient, illustrated through vegetable and flower business.

1. Volume.

A hypothetical California farm can be used to illustrate how supply chains have transformed with technology. In the past, farms would most likely only grow for themselves, their town or areas very close to them. The farm was most likely set up so that a group of people could harvest a variety of vegetables a few times per year, and sell them at the local market or farmers market. It was a very simple production line that included planting, growing and selling.

In 2013, production lines come in the form of extensive, all-encompassing supply chains that reach corners of the globe barely known to the average human. This imaginary farm could have been bought out by a large commercial grower of tomatoes that delivers the product all across the globe, year round.

Why is this possible? Firstly, agricultural techniques. Secondly, technology and supply chains. What used to be a simple family-owned farm is now a tomato haven where millions and millions of dollars are made each year. There are grocery stores all over the United States and world that get automated invoices and instantaneous shipping locations on massive shipments of tomatoes, all at the automated click of a button. Technology and information management are the driving force behind this phenomenon, as tomatoes are produced, delivered and consumed at record numbers.

Supply chain volume as increased from localized to global in tens of years, and it has dramatically increased the capacity for output and the capabilities of business. The same plot of land that used to produce tomatoes for a handful of families can serve a much larger population in 2013. Technology has enabled business management to operate from a bird’s eye view, watching thousands of simultaneous processes unfold across borders.

2. Year-round availability.

Focusing on the flower industry for a different perspective, supply chains can be further analyzed. In the U.S. state of Idaho, past generations couldn’t get nice flowers all year round. In a high desert climate like Idaho, with extreme temperatures and little weather consistency, flowers are not grown all year. There were most likely local people that would plant flowers in March and sell them to local flower shops until October, forming a very simple supply chain.

Today, due to technology, there are supply chains for flowers that bring plants all the way from Ecuador to be at an Idaho native’s wedding. The flowers are grown in Ecuador, harvested and organized, most likely flown to a delivery hub like Dallas and then delivered in a truck to a flower dispensary. From there, a smaller truck delivers them to an Idaho location, from which they are further delivered. Always refrigerated, always on time. Not only is this an extremely complicated supply chain, but it requires a lot of technology and software.

The owners of flower shops in Idaho can check their smart phone to get updated data information, provided by technology utilized by the company in Ecuador and the delivery center in Dallas. The IT systems within this supply chain are very complex, utilizing both hardware and software to troubleshoot any problem the flower delivery might encounter on the way from Ecuador to the wedding in Idaho.

Supply chains are much more complex these days, and are very interesting when looked at from a business standpoint. Supply chains run our global market, and technology is a large reason why the scheme is possible. Without adequate information management and updated computation techniques, none of it would be possible.

Grant Davis is a Data Modeler by day who writes by night. His passion for computers started when he discovered instant messaging in junior high school. When Grant isn't trying to climb through the computer screen he writes for BMC about ways to optimize job scheduling software .


Paola said...

A nice analysis, clear for non-technics!

preeti said...

thanks for sharing. supply chain is growing business. technology would be helpful to grow it fast.

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