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Report from the Summit

Blockchain, Tariffs and Transformation Were the Buzz at Sixth Annual Global Supply Chain Excellence Summit

August 16, 2018
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The sixth annual USC Marshall Global Supply Chain Excellence Summit opened on Thursday, August 2, with the Trojan Marching Band welcoming the nearly 500 participants to campus. They came from around the world for the two-day conference, which has become a destination for thought leaders in logistics.

“We are fortunate to be able to facilitate a meeting of the institutions, government agencies, entrepreneurs, professionals and students engaged at the highest levels of the global supply chain,” said James G. Ellis, dean of USC Marshall. “The summit annually brings industry luminaries to campus. It is like a reunion now.”

Current Events

While the program this year included breakout sessions on topics from the global trade outlook, supply chain transformation and talent strategy, the buzz in the room was all about tariffs.

James G. Sullivan, assistant secretary for services in the International Trade Administration of the U.S. Department of Commerce told the audience that new agreements with the European Union would be “More advantageous to us.”

“The summit annually brings industry luminaries to campus. It is like a reunion now.”--James G. Ellis

“We’re seeing progress on NAFTA and with the Korea Free Trade agreement, we will begin to see more job growth in South Korea.”

The Trump administration’s official viewpoints were tempered, however. Jeff Weiss, former deputy director for policy and strategic planning, and a senior advisor to the U.S. Secretary of Commerce said he was not optimistic about a quick end to the trade war. “This standoff will go on,” he said. “China will keep going until after the mid-term election.”

Industry, however, is prepared to cope. According to Puay Gan Goh from National University of Singapore, companies will find ways to get around trade tariffs. “Factories are being set up in countries like Vietnam where they don’t have these tariffs,” he said. “There’s already a shift to India where labor is cheaper than in China. Now companies will just accelerate that process.”

The upshot: The supply chain is global. Companies adapt in order to conduct global commerce, tariffs or not.

Big Talkers

The nonstop days were punctuated by a lineup of keynote speakers ranging from Joshua Dolan, director of Inbound Logistics at Amazon.com, to Anita Sengupta, senior vice-president of Virgin Hyperloop One, delivering big-picture messages about the state and future of the industry. As always, industry awards were announced and the latest innovations in supply chain technology were presented.

Port Watch

In an update from the ports of Los Angeles and Long Beach, the outlook on sustainability and clean air action plans was positive, with ambitious goals set for zero emissions within 15 years. Improving technology at the ports was cited as another goal, with strides forward as new tools provide operators advantages such as the capacity to see cargo 14 days before it arrives.

The trade outlook for the ports, however, was more measured. There was relief that the trade war was still contained, but concern that protracted tariffs would be damaging. According to David Reich, Director of Economic Infrastructure in the L.A. mayor’s office, “The Port of L.A. is the busiest in the Western hemisphere,” he said. Along with the Port of San Diego, it supports 2.9 million jobs nationwide. He told the audience that tariffs will hurt. “There will be an effect, and it will ripple,” he predicted.

Takeaways

Blockchain was another theme that carried throughout the sessions.  In basic terms, blockchain applications can be similar to Google Docs, enabling users to update and access real-time information with identification markers. With $9 billion from the logistics industry expected to be invested in blockchain by 2020, the global supply chain will become its biggest user. According to Gaurav Malhotra of EY, “Blockchain will transform business processes the way the internet revolutionized information exchange.”

But it won’t be an easy transition. Much of logistics still employs old systems, preferring human capital over digitization. “The problem that Blockchain doesn’t solve is whether the data is authentic,” said Ana Biazetti of IBM. “All points in the supply chain are entering data. Processing is more efficient between machines than people.”

The goal, said Aljosja Beije of Blockchain Rotterdam, “is machine to machine transactions.” Not only does this minimize errors, it provides efficiency and transparency while liberating people to focus on tasks machines can’t complete. The rise in technologies such as robotics, cognitive calculation and drones not only improves work flows, it addresses a chronic need for talent in the supply chain labor force.”

USC Marshall’s Master of Business in Global Supply Chain Management is doing its part to address the need for talent. The Summit concluded with a reception for attendees, and an industry career fair for professional networking.

“At the end of the day, the Summit is a convention of the industry’s thought leaders,” said Vyas, “as well as a networking event for companies looking to connect with the best talent.”