A chain is only as strong as its weakest link, and the global supply chain is no exception. Companies worldwide engaged in cross-border trade are quickly learning how disruptions from the escalating trade war can cause a logistical domino effect, impacting global deliveries and causing delays in payments.
The new Global Payments Architecture Report™ highlights how companies — including a player in the back-to-school market — are adjusting to the challenges of delivering products in the current global supply chain landscape and the ripple effects of the escalating global trade.
Automakers, clothing manufacturers and eCommerce giants alike are changing the way they deliver goods amid a turbulent global supply chain, as the trade war between the U.S. and China continues to escalate.
In the automotive space, Volkswagen recently announced it will restructure its group components business into a new division as part of an effort to improve efficiency and growth. Volkswagen reached the decision in anticipation of increased demand for electric vehicles, which have different component requirements than those with traditional internal combustion engines.
While Volkswagen realigns its supply chain, a major clothing company recently announced that it plans to resume the use of wool in its products, confident that it is now using ethically responsible sources.
Patagonia resumed the use of wool after a three-year hiatus, following an investigation to ensure the wool meets the Responsible Wool Standard. The original decision to stop using wool was brought on by the release of footage by animal rights activists, showing cruel treatment of the animals in cultivation.
Meanwhile, even large companies like Amazon are realizing they can’t go it alone in the delivery leg of global supply chain operations. Having delivered 5 billion items in 2017 through its Prime offering, Amazon is now looking to help entrepreneurs support startups that can expand the company’s logistics network and cater to last-mile fulfillment.
Deep Dive: Rethinking Global Supply Chains
Amazon’s push to improve its broader logistics network comes as rapid eCommerce growth in worldwide markets puts additional strain on the global supply chain infrastructure. In fact, in the U.S. alone, eCommerce revenue is expected to surpass $506 billion this year — and projected to surpass $712 billion by 2022.
This month’s Global Payments Architecture Report™ includes a Deep Dive that explores the technological changes coming to global supply chains, including the emerging need to integrate digital payment solutions, multiple transportation modes and new technologies to keep deliveries running smoothly.
A Year-Round Demand For Back-To-School Supplies
Back-to-school supply sellers are among those businesses that depend on shipments to be delivered smoothly and on time. If deliveries are late, supplies are at risk of languishing on shelves after the back-to-school rush passes. This not only puts revenue at risk, but the relationships with manufacturing partners as well.
These are lessons that backpack company Dabbawalla Bags learned the hard way. To keep its inventory moving, the company has learned to turn to the global market, where the school year begins at different times throughout the calendar year. For the August feature story, Dabbawalla Bags founder Susan Givens discusses the challenges of meeting back-to-school demand on a global scale and how her company works to keep its manufacturing partner financially afloat during slower demand periods.