The world’s understanding of logistics has evolved right along with the discipline itself. We used to think of logistics as closed systems that could be tightly controlled with proper planning. And maybe that was the case 50 years ago. It is not the case today. In the modern world, global logistics should be more adaptive than controlled.
Imagine a mid-sized business with a strong domestic customer base. That business is getting ready to expand overseas. Management contracts with Vigilant Global Trade Services, an Ohio global trade management firm, to help them develop their logistics systems.
Vigilant might get things started with a basic plan that acts as a launchpad for developing long-term strategies. They will not make any prognostications or imply that any part of the plan is set in stone. Why? Because they are smart enough to know how often things change in the global logistics arena.
Closed Systems No More
Logistics systems can sometimes exist as closed systems in their earliest stages. But remaining closed is nearly impossible when you’re working on a global scale. Instead, logistics providers now tend to create complex adaptive systems capable of accommodating logistic evolution without having to rely exclusively on centralized control.
How is this possible? Through the use of highly complex software that constantly collects, analyzes, and curates data. When such software is an artificial intelligence (AI) component, it can make some changes by itself. The software is capable of adapting to real-time changes by adjusting inventories, shifting schedules, etc.
It should be noted that even the most advanced software cannot run independent of human operators. Human beings still need to be part of the equation for the simple fact that machines cannot think. Yet combining the power of logistics software with the expertise human beings bring to the table creates a symbiotic system that can adapt to almost anything.
Adapting to Coronavirus
Designing logistics systems to be adaptive sounds fascinating at a theoretical level. Actually seeing it in practice is something entirely different. With that said, you might be wondering what types of scenarios would require such sophisticated adaptation. Well, we have just lived through one of the most profound in history: the coronavirus crisis.
It only took a matter of weeks to shut down virtually the entire world in 2020. As the pandemic spread from Asia to Europe and then North America, governments instituted lockdown orders that shuttered everything from manufacturing to transportation.
Despite locking down, people still had to eat. Medical supplies still had to be manufactured and shipped abroad. Those essential goods and services necessary to maintain a functioning society still had to flow despite so many restrictions.
Global logistics would have fallen apart had they relied on a traditional closed system mentality. Closed systems do not respond quickly enough. They are too top-heavy. On the other hand, adaptive systems are flexible enough to change direction at a moment’s notice. That’s exactly what happened.
Change Happens Fast
The point to understand here is that change happens fast when you are talking international trade. It only takes what seems like a small, insignificant matter to start a chain reaction that ultimately interrupts supply chains. Everything from weather to politics and financial market fluctuations impact logistics systems.
Global logistics work best when they adapt. They succeed when systems can accommodate change without relying on a centralized, top-heavy and closed system. If nothing else, the last 15 months has shown us that. Now it remains to be seen how many global logistics providers begin the process of trending away from closed systems and toward newer, more adaptive ways of doing things.