Blame Amazon. Or Google. For that matter, blame all of Silicon Valley. They’ve trained us to become accustomed to having access to all of our data in an instant. We can order anything online, change the home thermostat with our cell phones and access the world’s information in seconds. So why are the connections between technology platforms in our supply chains so awful?
It’s time for a change. We need better connections built on modern technology to manage the procurement of goods and their transport to customers across the globe. The challenge isn’t that the technology doesn’t exist; it’s used ubiquitously across other industries. Our dilemma is that we’ve built our IT infrastructure on outdated platforms and haven’t made the commitments to standardize the language to transmit data. There’s talk of big data and advanced analytics, but do we even have the back-end infrastructure to enable it?
Systems built in the 1970s are still running major elements of our supply chains, with few attempts to modernize them beyond some user experience elements. Bring anyone in from outside the industry to look at what’s being done and the vast majority will instantly recognize how slow and inefficient the transmission of data is. We use very costly forms of technology to communicate and share data (e.g., EDI, fax machines), only to create bottlenecks in entire networks. These holdups aren’t just frustrating, they lead to millions of dollars of waste as information is passed along incorrectly or just too slowly with which to make timely decisions.
EDI is dead. Or at least it will be. Like Dustin Hoffman was told in The Graduate about the future of plastic, web services are going to change the supply chain industry. It’s an extraordinary process to witness companies migrating from antiquated practices and systems into the modern age of data sharing. Companies like project44 (www.p-44.com) and a few others have built the infrastructure of pipes that foster that sort of innovation. The kind of technology that these companies have developed can share enormous amounts of data and give supply chains what they need to make informed decisions to reduce waste.
This type of technology will completely change the way we run our supply chain networks. We’ll be able to build dynamic connections from vendors, customers and company facilities to work in predictive analytics to help smooth over the spikes of uncertainty in planning. We’ll also be able to efficiently share data for all participants in the supply chain. We’ve already witnessed tremendous improvements in the data connections between LTL carriers and 3PLs using these types of connections, but it’s just the beginning.
Linking the Value Chain
Imagine a globally connected supply chain with true connectivity between all elements of the value cycle. Raw goods manufacturers receiving better insight into the demand for and usage of their outputs. Carriers in the ocean, air and OTR transport arena being able to better manage and utilize their assets by better demand planning from their customers and more insightful feedback on where freight is each moment of its transport. Distributors and retailers having more insight into their sales channels and smart logic to replenish inventory with the better information they receive from transportation partners.
We’ll need to modernize our technological infrastructure to current technologies and standardize the languages that we use to share data in supply chain. Global standards will one day emerge, but there must be a shift from non-standardized EDI profiles to a web service-enabled environment with standards of design that allow for more intuitive integration practices and faster data transmission between technology platforms. We desperately need the blueprint for what the future of data connections will be.
Let’s commit to better data and connections in 2015, which is going to take a concerted effort. Operating systems for participants in the supply chain (carriers, warehousing, etc.) have to invest in the ability to interface in this new web service-enabled world and to operate with best-in-class capabilities under periods of high activity. Better connected systems will deliver huge benefits to participants in supply chains across the globe.
Thanks, Amazon and Google. The connected supply chain is going to be amazing.