The World is Flattening
January 24, 2021
Author: Guy Soreq
In his now famed book The World Is Flat, Thomas Friedman argues that the competitive landscape between advanced and emerging markets has leveled out. Connectivity and collaboration enabling technologies have allowed companies both big and small, regardless of location, to participate in complex global supply chains. As evidence of this globalization, Friedman describes the increasing standard of living in developing countries along with the decreasing cost of goods and services in developed countries. While Friedman presents a compelling case, the reality today is much more complicated because integrated global supply chains have made us highly dependent on a wholly opaque system.
The risks of this dependence became abundantly clear in 2020 when supply chains began struggling to move goods from one side of the world to the other. Prices spiked, crashed, and then spiked again. Economic nationalism swept across the globe, with some countries going as far as to halt exports of critical goods. This response placed an even greater burden on the already struggling traders trying to stabilize supply and demand imbalances. Most recently, spiking shipping costs have added yet another layer of unpredictability. In Friedman’s flattened world, we would expect to see a leveling of prices from one country to the other. Instead, we are witnessing drastically different material prices around the world.
Though middle men and women are often (and unjustly) blamed for increased costs at the end of the supply chain, I am here to tell you that traders are actually one of the unsung heroes of 2020. These intermediaries are not to blame for our supply chain woes; they just haven’t had the right tools until now. In our industry, a vitamin trader based in the US is best positioned to understand demand in the US. A trader in China understands the supply capabilities of China. The problems begin when supply and demand suddenly surpass the ability of one distributor to handle. Because our networks are still local and limited.
Friedman is right that technology has allowed us to speak to more people than ever before, but in our relationship-based industry we still buy and sell to those we know. In times of crisis, a trader needs to know how to activate their existing network. Or whether they need to build new relationships in specific markets. That’s where Glowlit comes in. Glowlit Pro tells traders where there are opportunities to shift their goods, balancing supply and demand, and leveling prices around the world. So while we disagree that the world of supply chains is flat, with Glowlit it may finally be flattening.
Photograph: Antar Dayal/Getty Images/Illustration Works