Foundation for Economic Growth
Societies with a highly developed supply chain infrastructure (modern interstate highway system, vast railroad network, numerous modern ports and airports) are able to exchange many goods between businesses and consumers quickly and at low cost. As a result, the economy grows. In fact, the one thing that most poor nations have in common is no or a very poorly developed supply chain infrastructure.
For more insights, visit:
www.youtube.com (search=Ethiopia’s Food Insecurity and Poor Infrastructure)
Improves Standard of Living
Societies with a highly developed supply chain infrastructure (modern interstate highway system, vast railroad network, numerous modern ports and airports) are able to exchange many goods between businesses and consumers quickly and at low cost. As a result, consumers can afford to buy more products with their income thereby raising the standard of living in the society. For instance, it is estimated that supply chain costs make up 20% of a product’s cost in the U.S. but 40% of a product’s cost in China. If transport damage is added in, these costs make up 60% of a product’s cost in China. The high Chinese supply chain cost is a major impediment to improving the standard of living for Chinese citizens. Consequently, China has embarked on a massive effort to develop its infrastructure.
Watch the video clip of this example at:
www.youtube.com (search= China Infrastructure Development Plan)
Job Creation
Supply chain professionals design and operate all of the supply chains in a society and manage transportation, warehousing, inventory management, packaging and logistics information. As a result, there are many jobs in the supply chain field. For example, in the U.S., logistics activities represent 9.9% of all dollars spent on goods and services in 2006. This translates into 10,000,000 U.S. logistics jobs.
Additional employment data can be found at:
www.bls.gov/oes/current/oes530000.htm
Opportunity to Decrease Pollution
Supply chain activities require packaging and product transportation. As a by-product of these activities, some unwanted environmental pollutants such as cardboard waste and carbon dioxide fuel emissions are generated. For example, paper and paperboard accounted for 34% of U.S. landfill waste in 2005. Only 50% of the 84 million tons of paper and paperboard waste were recycled. Also, carbon dioxide emissions from transportation accounted for 33% of total U.S. CO2 emissions in 2005. As designers of the network, supply chain professionals are in a key position to develop more sustainable processes and methods.
Opportunity to Decrease Energy Use
Supply chain activities involve both human and product transportation. As a by-product of these activities, scarce energy is depleted. For example, currently transportation accounts for 30% of world energy use and 95% of global oil consumption. As designers of the network, supply chain professionals have the role of developing energy-efficient supply chains that use fewer resources.
Related information can be found at the following website:
www.worldwatch.org/node/808