Supply Chain 4.0 and Trade

The skill-biased nature of GVC trade is associated with increased complexity of global supply chains as well as increased use of skill-intensive inputs, notably services.

Industries and governments are continuously seeking ways to optimize the movement of goods, data, and currencies across global supply chains.

According to the Blockchain Turkey Know Your Supplier Report

Supply Chain Processes Challenges

Source Blockchain Turkey Know Your Supplier Report, supply chain processes challenges

In 2019, the world’s GDP rose by roughly 2.2 percent.And in 2020, we are seeing the impact of unprecedented global events tied to the COVID-19 pandemic and resulting economic upheaval.

Trade policy also affects domestic firms. Local firms in an open trade regime are more exposed to competitive pressures through international trade.

On the other hand

Around 70 percent of international trade today involves global value chains (GVCs). These are made up of domestic and international enterprises that trade and transfer materials, goods and services.

Source Hammelscale Industry 4.0 , WTO Global value chain report

Suppliers and manufacturers must design for resilience and flexibility in value chains. The transition to Industry 4.0 will depend on locally and globally interconnected operations to support smart production and life cycle management.

What is Supply Chain 4.0 ?

Supply chain 4.0 is the re-organization of supply chains — design and planning, production, distribution, consumption, and reverse logistics — using technologies that are known as “Industry 4.0”.

It transforms business models, making supply more customer-driven

Source WTO Global Value chain 2019 Report

It is about transforming the model of supply chain management from a linear model in which instructions flow from supplier to producer to distributor to consumer, and back, to a more integrated model in which information flows in an omnidirectional manner to the supply chain.

Source Connected and autonomous supply chain ecosystems 2025 PWC

Disruption risk of supply chain management

Source Mckinsey Global Institute Risk and Resiliency Report

Supply Chain 4.0 is designed to enhance key management competencies, such as effective target setting, collecting and analyzing data to monitor progress towards these targets, inventory management, coordination of targets/progress across production stages, and worker supervision and incentives.

THE COLLAPSE OF THE LINEAR SUPPLY CHAIN

New technologies and tools have allowed the traditionally linear supply chain to collapse into an agile interconnected network that unlocks new value across the digitized nodes

Source Deloitte Global Analysis

Trade, foreign investment, migration and data policies determine the openness of an economy.

They affect the size of the markets that firms can access, shape the degree of competition in the domestic economy and determine the access of domestic firms to foreign technology, knowledge and know-how.

In conclusion, trade policies that result in a reduction of export costs increase firm profits.

References;

1- Advancing global trade with blockchain , IBM

2- BCTR Know Your Supplier Report

3- Connected and autonomous supply chain ecosystems 2025 PWC

4- Mckinsey Global Institute Risk , resilience in global value chains Report

5- GVC Development 2019

6- Deloitte Trade 4.0 Report

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