Changes Magazine

Delivered Around 80 percent of all products move along global value chains that themselves provide a livelihood for more than 450 million people. Yet their delicate links tend only to be discussed when they are disturbed. It’s time to take a look at this fascinating world.

World’s oldest supply chain?

changes #2/24

Kenya

Site where the Stone Age tools were found

More than 300,000 years ago, people in the Olorgesailie Basin in southern Kenya advanced from primitive hand axes to making tools from obsidian, a volcanic rock glass. American paleoanthropologists working in the area have found such tools in large quantities, even though the obsidian sources lie up to 100 kilometers away, with many mountains in between. For this reason, researchers have ruled out the possibility that the tool makers ‘commuted’ to fetch their own raw materials. Instead, these were likely imported via a chain of people living in different localities, presumably in exchange for other goods. The obsidian finds from Olorgesailie are thus considered to be the world’s oldest evidence of long-distance trade, dating back 80,000 to 100,000 years earlier than other examples.

Lake Victoria

Olorgesailie Basin

Text: Robert Habi Photography and illustration: 3st kommunikation, 3st kommunikation via midjourney, Shutterstock

Indian Ocean

From local to global

Pre-1900, supply chains were mainly organized at a local and regional level.

In the early 20th century, expansion of the rail network, the growth of steam shipping and the increased use of trucks meant that distances shrank. Pallets and forklift trucks found their way into logistics.

Bottlenecks in world trade According to credit insurance group Allianz Trade, the almost week-long blockage of the Suez Canal by a container ship that ran aground damaged global trade to the tune of US$6–10 billion a day. As many as 200 ships were backed up at the head of the canal in March 2021, with the result that raw materials and semiconductors failed to reach their destinations on time. The consequences of a blockade of the Strait of Hormuz would be even more extreme. Around 30 percent of the world’s oil production is shipped through the 50-kilometer-wide strait between the Persian Gulf and the Gulf of Oman from suppliers such as Iraq, the United Arab Emirates and Kuwait. A fifth of global liquefied natural gas supplies also pass through the strait.

The mid-1950s saw the earliest containers come into use, which were standardized soon after.

The mid-1960s saw the advent of computers in warehousing. The first real-time warehouse management system arrived in the 1970s, with barcodes replacing manual entry of product numbers. 1983 marked the coining of the term ‘supply chain management’. PCs and software such as spreadsheets and route planners made supply chain management increasingly efficient. In the future, artificial intelligence and machine learning are set to improve order management. Transparency in supply chains is proving an increasingly prominent factor for success.

4

5