Right now, Asia is the fastest-growing region of the world economy, likely to contribute around 60% of global real GDP growth in 2024. With global logistics and supply chain spending typically around 10% of global GDP, this adds up to supply chain investment that’s likely in the trillions.

Considering such growth potential, and the need for supply chains to constantly evolve to manage demand, we’ve been exploring the major triggers for supply chain transformation in 2024. One of the biggest is tech.

AI is changing our world – and our industry – at an unprecedented scale. Digital advancements and integrations accelerate each day. In the third part of our supply chain transformation series, I break down some of the most important considerations for a tech-enabled supply chain strategy:

1. The rise of global tech is directly impacting supply chain routes and trends

The tech industry – from manufacturing to production- is making supply chains less linear. Today’s complex, connected networks with a greater focus on regional blocs are in part influenced by how and where tech hubs are evolving.

For example, with e-commerce domination and digital transformation enabling new networks, major e-commerce fashion providers are driving wholesale change to what trade lanes look like. E-tailers, including Asian e-commerce players, are diversifying supply chains beyond Asia, including Turkey, Brazil and Mexico.

Another example is auto. As EV production rises and cars continue to adopt higher-tech features, the number of electronic components required increases. This jump in demand from the auto market has significantly changed the trade flow of electronic components. Traditionally limited to Asia, we’re now seeing activity shift to America, Mexico, and Europe.

There’s no doubt that digitization across the board is supporting transformation in the flow of goods. And this shift is set to increase as digital and data empower the supply ecosystem. Businesses in Asia that either buy or sell tech products will benefit from the expansion of choice in the supply network. Whether you’re considering a hard reset of your trading partners or simply opening up new geographies, keeping a close eye on these trends and shifts is crucial to staying competitive.

2. AI is providing capabilities beyond anything we’ve seen before

At FedEx, we sit at the intersection of physical and digital networks. And our own data journey is an example of how businesses of any size can use data to truly transform. By unlocking the deep insights only big data and AI can provide, you can propel unexpected growth and pivot in new strategic directions.

We’re using the incredible power of data from the millions of packages we handle daily to supercharge the physical networks we’ve built over the last 50 years. A big part of this is responsiveness, which supports supply chain resilience. Another factor is our ability to optimize for cost efficiency and performance.

While physical networks get us to where we want to be, digital supply chains make that journey faster, more precise and more reliable. When it comes to reducing or optimizing supply chain costs, improving performance, or how supply chains impact everything from customer satisfaction to profitability, we need to rely on technology and digital.

3. The game-changing ability to move from reactive to proactive

AI and machine learning have enabled an immense gear shift when it comes to supply chains. Put simply, we have moved from reactive to predictive, or pre-emptive. In the logistics industry, deep learning models mean the ability to predict the estimated delivery date and time with pinpoint precision is getting better every single day.

This ongoing digital transformation is powering not just our business, but that of our customers, and their customers too. From local retail storefronts to global B2B enterprises, we’re using data to help our customers unlock more information and insights. Ultimately, we’re helping businesses gain greater control over their supply chain, more visibility to make the right decisions, and enabling enhanced, efficient operations. Armed with insights and near-360-degree vision, companies can make proactive decisions and develop tailored strategies for growth and expansion.

Tech is the great enabler – but today’s supply chains are shaped by a whole host of factors

Of all the levers applying pressure and influence on supply chain evolution, the biggest is undoubtedly tech. But there are many others. To encourage investment and support the many supply chain shifts I’ve been exploring in this series, we need the right ecosystem in place. One that includes the best quality infrastructure, talent, and regulatory environment, including increased sustainability regulation.

Amid ever-greater use of technology, our vision for the future is simple: make supply chains smarter and more sustainable for everyone. Make no mistake: digital is the great enabler in transforming supply chains, and we’re just getting started on what’s possible.

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