According to Supply Chain Quarterly, holiday shoppers are using parcel tracking to keep their spending in check this holiday season. 

Holiday shoppers are turning to supply chain technology like parcel tracking to maintain their spending levels this winter despite spending pressure from inflation, according to a survey from Fed-Ex Express Canada.

Read the article Supply Chain Quarterly

French supply chain management company Pelico has raised $18.5 million to increase its platform.

Parisian startup Pelico has announced raising a $18.5 million round for its supply chain management software proposition.

Read the article Tech EU

According to Industrial Distribution, McKinsey & Co has acquired SCM Connections, a company that uses advanced tech for supply chain planning.

McKinsey & Company announced it has acquired SCM Connections, a leader in advanced technology-enabled supply chain planning and analytics. 

Read the article Industrial Distribution

According to SCMR, a new survey shows decision makers feel that the supply chain disruptions aren’t over yet.

SAP SE has released a new survey that finds senior business decision-makers expect the unprecedented supply chain issues and disruptions that U.S. companies have been grappling with for years are not over yet.

Read the article SCMR

The year 2020 was indeed a nightmare for supply chain managers. With the COVID-19 pandemic on sight, global logistics chains and networks were disrupted at an unprecedented scale. The same was the case in 2021. While things had improved a little, supply chain companies and providers still faced countless challenges. Despite the challenges witnessed, businesses went through a steep learning curve, which highlighted the importance of optimizing operations that rely on vendors or risk further uncertainty and disruptions. While production relies heavily on a steady supply of supplies, a supply chain is also critical for maintenance, which needs a regular supply of spare parts. Lack of an optimal maintenance strategy leads to holdups and delays in production, which will have costly effects on an organization's supply chain. Therefore, the lack of a maintenance strategy will significantly impact your supply chain and logistics.

Reactive maintenance

Reactive maintenance entails repairing assets only once they have broken down or have reached wear and tear, where their operations can resume only after repairs. This kind of maintenance is necessary for almost all companies from time to time. The advantage of this type of maintenance is that it requires less resources and requires low initial and ongoing costs. On the other hand, its downsides include the high cost, which may reduce the lifespan of assets due to lack of ongoing maintenance and may cause unexpected and costly delays in production. Furthermore, it has a higher safety risk to employees and operators.

The implication of this maintenance approach is that it does not impose a substantial burden on a company's supply chain. It does not require a regular supply of spare parts, meaning it only affects the vendor side of the supply chain when there is a problem. However, the customer may face challenges if there is a severe breakdown affecting equipment and production.

Preventive maintenance

In almost every aspect, preventive maintenance seeks to address the issues arising from reactive maintenance. Instead of waiting for an asset to wear off or break down, it takes a rather proactive approach to try to prevent the machinery from breaking down in the first place. It entails periodic maintenance and repair, often done at strict intervals. This removes uncertainty and the risk of machines being damaged during work. The advantages of this approach are that they significantly reduce the risk of equipment failure, enhances employees' safety and prolong the machines' lifespan. However, the problems arising from this are that they require more investments and resource allocation and can be inefficient.

This strategy adds additional vendors and subcontractors to the company's supply chain due to spares and supplies being in regular demand. It can also put extra pressure on logistics managers in the event of an adverse event such as Covid-19. Furthermore, companies using this strategy may be forced to stockpile spares to use in maintenance and supplies as an insurance policy.

Predictive maintenance

Predictive maintenance is a newer concept built on innovative technologies such as the Internet of Things (IoT), smart sensors and others. This form of maintenance strikes a balance between reactive and preventive maintenance strategies. Unlike reactive maintenance, predictive maintenance does not entail waiting for a machine to fail. Rather, it encourages monitoring an asset while it works and identifying the signs of wear and tear through advanced sensors.

The advantages of this approach are that it provides increased visibility of the asset's condition, prevents breakdown and costly repairs and promotes the longevity of assets. The disadvantage entails higher ignition investment and difficulty retrofitting the sensors on old equipment. On supply chains, this method provides a way of tracking shipments and optimizing delivery times by leveraging IoT sensors and artificial intelligence. This method imposes little strain on the firm's supply chains and allows an organization to gain insights into parts of machines and parts that need to be ordered.

The disruptions in global supply chains in the past three years were unprecedented. It led to soaring inflation across many parts of the world. This has forced central banks to change their policy stance, raising interest and borrowing costs. Amid the pandemic, rising tensions in different areas in the world have worsened the situation. Furthermore, there have been a switch in demand for services and manufactured goods in the US and lockdowns that have reduced the manufacturing abilities in leading manufacturing hubs such as China. These two factors have occasioned supply chain disruptions never witnessed before. However, the good thing is that things are showing signs of easing. Here are some examples of changes being experienced that show that the supply chain may be opening up at last. 

1. Shipping costs are now close to pre-pandemic levels

Freight rates in major routes globally hit a record high during the pandemic. This led to uncertainty in the supply chain. Over the past six months, freight rates along key supply chain routes globally have fallen sharply, indicating the surge in demand for specific products in manufacturing hubs such as China. This further indicates that the demand for manufactured products may be easing, and so is the congestion in ports as goods waiting for distribution keep reducing. The congestion in ports also contributed to the rise in freight charges during the peak of the pandemic.

2. There is an increase in spending on recreational activities

Everyone worldwide received a heavy economic beating as others lost their jobs and companies suspended their operations. However, things have eased, and companies seem to be hiring again. This can be seen from the rising consumer spending on goods which reports indicate to have grown steadily compared to the early days of the pandemic. Similarly, spending on recreational activities has increased substantially today, unlike during the pandemic’s peak. For services, consumer spending rose to $11 billion from $10 billion up in April.  

3. Shipping costs of goods like iron ore and coal have gone down

From the drop of vessels such as Panamax-sized ones, whose primary role is to ship US grains across the world, it is evident that the value is dropping. From research, vessels have dropped from 3,500 during the pandemic’s peak to around 1,500 towards the end of 2021.

China, the leading importer of various commodities like metals such as copper, iron ore and coal for the manufacture of different products, have resumed their operations in manufacturing. This has reduced the congestion in ports, and the costs of these metals have decreased compared to the peak. Copper prices are often considered a barometer of growth.

4. Waning demands

Analysis of digital trade shows that activity in retail, manufacturing and transport & logistics has dropped significantly this year. Accordingly, The Index of Global Trade Health report by Tradeshift indicates that global supply chain activity fell by 5% during the same time, with new orders slowing as uncertainty increases. This is good news for supply chain and logistics companies as bottlenecks ease and shipping costs continue dropping to the normal level pre-pandemic. However, this is not to say that things are completely back to normal. It will take a while before we can see the pre-pandemic supply chain efficiency.

Furthermore, the pandemic has forced companies in the sector and governments to rethink their approaches completely. The challenges witnessed have exposed the weaknesses of modern supply chains and shown the need to have measures to enhance resilience. As such, although things appear to be moving in the right direction, work needs to be done to get the best and remain functional in case of another pandemic or disaster in future.

A supply chain control tower is often a confusing term to many in the market. It confuses with regard to what it actually means and its value to supply chain organizations. A supply chain control tower is a cloud platform focusing on providing end-to-end supply chain visibility and control. It integrates and extends existing ERPs, WMS and TMS systems with 3PLs, suppliers and manufacturers, and other partners. This integration provides visibility, actionable insights and operational control across the supply chain. Furthermore, it reduces lead times and inventory costs and helps mitigate exceptions while increasing the percentage of orders delivered on time and in full.  

A robust Control Tower will perform the following:

Real-time order planning- One of Control Tower's key tasks is improving customer service. To achieve this, it must capture and leverage key data such as delivery time, inventory availability and transportation costs in real-time. Doing this allows an organization to select the best and the most cost-effective flow of orders.

Exceptions management- This means that a control tower can focus on delivering OTIF orders consistently through supply chain tracking and sending of alerts. The solution should also allow you to take actions directly on the app.

Granular visibility- Control Tower, on top of tracking and tracing, is required to bring granular visibility to the details of every order to fulfill each required element effectively.

Although some technology vendors may refer to their analytics solutions as "Control Towers," some do not have the above capabilities. They may allow consolidation and display of data but cannot enable users to act on what they see. Although analytics solutions may help in planning stages, Control Towers must empower users to act on the insight. Therefore, when choosing a solution, remember that most supply chain software has analytics capabilities, but Control Towers should also offer an operational function. Below are two examples of control towers that provide visibility and analytics, enabling you to act on insights in real time.

Types of operational control towers

As discussed earlier, on top of having analytics capabilities, control towers must also offer visibility and allow you to act on insights in real time. Therefore, control towers should alert you on problems or exceptions as they emerge and allow you to resolve problems identified in real time within applications. These solutions, however, may differ in the degree to which they offer visibility and control in the supply chain. Therefore, as a buyer, note these differences and beware of significant gaps in functionality among the control tower solutions available in the marketplace.  

Here are two examples of control towers that you are likely to come across as you look for the best solution to your problems:

Transportation-focused Control Towers

These Control Towers mainly offer insight into the inbound and outbound shipments, visibility into aspects such as deliveries, ASN, freight spend, on-time delivery, track and trace and other crucial details. They are more likely to be purchased as an add-on or, in some cases, included within a TMS (Transport Management System). The limited focus means that they are siloed from other supply chain processes, offering end-to-end visibility

Supply chain focused

These Control Towers focus on the supply chain, ensuring visibility across internal and external supply chain processes and milestones. Furthermore, it focuses on sales and purchase orders, inventory across internal and external suppliers, maintenance and repair, and manufacturing. Due to end-to-end visibility in the supply chain and in-app, they allow collaboration with suppliers and partners.

The most significant difference you need to identify when choosing Control Towers is their focus. For instance, if you want end-to-end visibility and be able to act on insights, you should choose analytics or a transportation-based solution.

Supply chains determine the failure or success of businesses. Similarly, a good supply chain strategy with a well-thought-out marketing plan and an efficient inventory management strategy must be in place if a supply chain has to work properly. The success of a business is also determined by supply chain management, which is all about ensuring reliability and redundancy in the procurement process. From the COVID-19 pandemic, we drew many lessons regarding the vulnerabilities in the current supply chains. These lessons show supply chain strategies to end the year that will help you overcome vulnerabilities caused by demand surges, shipping challenges and other potential external factors.

1. Work on strategies with key suppliers

Unreliable suppliers are a big challenge to the supply chain. If you cannot rely on your existing supplier to deliver inventory in time and in the right condition, you may find it difficult to fulfill customer orders during holidays. This can also dent your operations, especially during critical moments when tight timeframes occur. Therefore, it is a good idea to connect with key suppliers to develop relationships and understand the opportunities and constraints within your suppliers' business. This can be achieved by working closely with your key suppliers. The meeting will clarify expectations and standards and create relationships that will make it easy to solve future problems.

2. Create buffers in supply chains

Placing buffers strategically can help your organization absorb the impact of the possible delays that sometimes occur unexpectedly. The buffers that will help your business include:

• Inventory buffers: Keeping safety stock to protect against delays and demand surges
• Time buffer: Ensuring materials arrive before demand to protect customers from late delivery
• Capacity buffer: Leveraging underutilized space such as production facilities and warehouses.

3. Diversify your manufacturing and sourcing

As learned from COVID-19 and lessons from changing geopolitics, it is becoming clear that relying on a single source for products is risky. This was seen in the natural disasters that affected Thailand and Japan in 2011, preventing cars from being shipped overseas. From this, we can all learn that diversifying your sourcing network (multi-sourcing) starts with categorizing your suppliers based on the current cost and financial impact if that supplier or partner cannot fulfill the orders. You can then find new relationships and suppliers that have the capabilities to meet your demands from diverse locations.

4. Invest in demand forecasting

Failing to forecast demand correctly is one of the mistakes many companies commit, leaving a bad taste in the mouths of the customers. As opposed to using guesswork or feelings, demand forecasting requires that you use data to gauge the demand for certain materials from the customers ahead of time. This will allow you to prepare in advance so you are not caught off-guard when it matters most. Accurately forecasting demands improves your ability to stock products, deliver products, cut costs and enhances customer satisfaction. You can predict demand in various ways, such as through customer surveys, social media monitoring, reviewing historical data and trends and seeking advice from consultants.

5. Invest in technology

A serious organization should never use spreadsheets or other manual methods to manage its procurement. These methods are prone to error and are a source of confusion, making it difficult to carry out your duties well. Therefore, you must adopt technology to monitor stock levels and integrate technology into vendor processes.

6. Standardize your supply chain processes.

Any company would want to be consistent in operations, which starts with keeping supply chain operations dependable. This is especially true if your suppliers and manufacturers are scattered worldwide. To help in standardization, you can take advantage of platforms or product templates to enhance production speed and adherence to regulations.

As the holiday season ramps up, the shipping industry is bracing for a 30-40% increase in online orders. Shipping challenges are inevitable given the strained global supply chain and the 80,000 delivery-driver shortage reported by the American Trucking Association. Fortunately, satellite IoT provides a solution to the impending shipping and logistics difficulties with reliable visibility and asset tracking anywhere in the world.

During peak holiday delivery season in 2020 and 2021, demand outweighed capacity by 7.2 million — 1.3 million packages per day respectively. Recently, FedEx, UPS, and USPS issued shipping deadlines for guaranteed delivery by December 23 in anticipation of the holiday surge.

Satellite IoT asset tracking can help meet this demand. IoT devices utilize sensors and GPS tracking tools to generate a consistent flow of actionable data. Whereas terrestrial telecommunication services struggle to provide coverage in remote areas, satellite IoT can ensure near global connectivity.

Satellite IoT also provides better visibility throughout the shipping process. Rather than manually tracking the progress of shipments, IoT can remotely indicate the precise location of each shipping container. Furthermore, IoT devices can provide critical data during transportation such as travel speed, fuel consumption and engine run times. Data transmissions from a satellite IoT device can immediately notify users of any disruptions. Upon notification, unforeseen delays or disturbances can be addressed immediately.

In addition to global visibility, satellite IoT is customizable to specific business needs. IoT can support various logistical demands in the shipping process such as determining optimal shipping routes, updating managers on driver behaviors and monitoring critical statistics on vehicle health. Certain IoT hardware devices utilize low code, hardware terminals and API to interface with IoT edge devices and application. Other sensors can interface with AI-driven edge devices and applications to provide additional information on necessary data, delivering a constant stream of smart data that assists with logistical concerns.

Implementing satellite IoT alleviates some of the logistical burden from shipping managers and supports a more productive shipping process during the holiday  surge. Utilizing IoT will provide more comprehensive fleet management with improved visibility throughout the shipping process. Smart data from IoT devices can help managers better understand where and when issues arise, prevent costly idle times and better coordinate deliveries and pickups so holiday shipping delays are not as severe as they were in recent years.

Most importantly, satellite IoT is more affordable now than ever before. Data processing at the edge enables the most efficient data transmission. This means end users are no longer inundated with irrelevant information and the associated transmission fees. The result is precise, smart data that saves valuable time and resources.

Although it would be ideal if holiday shipping could be as fast as Santa’s magic sleigh, satellite IoT devices can help decrease shipping delays to make sure gifts are under the tree by Christmas day.

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By Dave Haight, VP of IoT at Globalstar

Fast delivery is an important part of any company. However, when there is a delay, customers can react, which may lead to backlogs arising from clogged delivery processes. However, routed deliveries can be used to reduce potential backlogs and other issues that may crop up during shipping. Backlogs can also happen if one or various factors in the fulfillment process are disrupted. However, supply chain difficulties might be bypassed through several ways, as explained below:

1. Supply chain disruptions

The COVID-19 pandemic has undoubtedly affected manufacturing companies and retailers equally. These are the industries that help sell retail products and ensure the customers' manufacturing needs are achieved without a hitch. With the pandemic which affected industries in the past three years, we have seen challenges moving materials which have adversely disrupted the supply chain in manufacturing. This has led to delays in the fulfillment and shipping of goods.

2. Lack of dedicated routes

Backlogs in inventory can also occur in a business environment where there is a lack of dedicated product delivery routes or maps for their drivers. With no strategic approach to routing and delivery of products, drivers are likely to waste more time on the road and increase the distance as they try to map out routes.

3. Unavailability of driver capacity

Most businesses have more demand that outshines their abilities. As such, they experience inventory increases mainly during the pandemic, leading to backlogs due to a lack of capacity. Even if a company has the best operations but less capacity, it will fail to fulfill the order because it lacks crucial components, such as drivers responsible for delivering shipments.

To minimize inventory backlogs, retailers must prepare by creating a delivery plan with proper routing and getting the right people in place. Furthermore, they must work with partners specializing in developing effective delivery programs. Reduction of backlogs in inventory begins with developing a comprehensive last-mile routing delivery system. This starts with the transportation of products from a warehouse or a distribution center and ends with the delivery of the product to the customer's doorstep. By developing an effective delivery routed strategy with the help of partners, you can get certain types of benefits, such as clear and strategic routes and prepare for unexpected events, as the pandemic has shown us.

You can also save time and effort by ensuring drivers have a pre-planned delivery map that they follow. Such a plan maps out the best route drivers can follow and stay on schedule to reach their destinations on time. Since delivery involves many stops on the agenda, routed deliveries will help drivers organize their stops and create a proper strategy to reach each of their drop-off destinations. With high traffic and detours, drivers can suffer significantly on their routes. However, having a clear and strategic routed delivery schedule for each driver will help in planning for unexpected events. A well-thought-out routing plan allows drivers to look for alternative routes and avoid traffic. This will mean that they spend less on fuel costs, road hours and long-term maintenance of trucks.

However, even with the right routed delivery schedule, you cannot achieve your goals without drivers. Therefore, your company has to know where to get skilled, reliable drivers to tackle delivery challenges, mainly if your company has been experiencing an increase in inventory backlogs due to reduced capacity. Although it is crucial, the search and hiring process can be time-consuming since it can take weeks or even months to look for, interview, hire and train divers. However, you can speed up the process by using partners to give you help in creating intricate routed delivery strategies, vet drivers, train them and ensure they are ready to pick bulky shipments.

The coronavirus pandemic (COVID-19) wreaked havoc in many areas of society. However, one of the areas that were affected the most is the transport and logistics sectors. In some countries and within the US, for instance, transport of products and goods almost came to a standstill except for some essential products and services that were needed to solve the health problems experienced at the height of the pandemic. While the essential services were given priority, they also struggled to deliver the necessary products. Like transportation services, manufacturing also suffered due to challenges in supply chains, which affected the availability of raw materials. These supply chain concepts are the new definitions to live by if you are to survive in the event of another disruption.

Supply chain transportation management

Supply chain transportation management is the organization of transport of goods from suppliers to manufacturers to wholesalers and ends up to the consumers. It is a crucial part of managing the supply chain to ensure goods are efficiently shipped at an affordable cost and to the destination or where they are needed. Transportation consists of decisions that are often necessary due to costs, logistics planning, and broader purchasing, all of which are integral to transportation.

Managing supply chain transportation

Managing a supply chain is a complex process, and solutions to this range from spreadsheets to elaborate transport management systems (TMS) used by large companies like Walmart, which controls a huge supply chain. Walmart has a mechanism for managing supply chains in-house, unlike others that use external logistics specialists. Due to the complexity of managing supply chains, some companies decentralize their operations hence the need for proper planning of teams, shipping routes and systems. While larger organizations require TMS, smaller ones find this difficult due to cost implications.

Balancing Act of Time vs Cost

The ever-increasing demand makes the companies struggle to reduce shipping and delivery times. There is also the complexity that comes with omnichannel marketing, customers' expectation of direct order and delivery of packages, and the need to send bulk stock to retail stores. Although other companies, such as Amazon, avoid the dilemma by focusing on direct marketing, others like Walmart use a nationwide chain of stores to dodge the complexities. However, other organizations develop omnichannel strategies to remain competitive. Coming up with a perfect transportation strategy in such circumstances is difficult without the help of logistics modelling software which determines answers to questions like profit optimization while meeting customer expectations.

Globalized supply chain

The coronavirus pandemic has disrupted the international and national supply chains and transportation. Therefore, supply chain managers must seriously review the globalized supply chains and their efficiency. With the advances in globalization, almost all major companies have extended their supply chain, and most now depend on Asian suppliers. However, dependence on a single supplier means that obtaining products from a single source without a backup strategy can be challenging in case of a disruption. Organizations need to rethink how the global supply chains work. Although it is not wrong to have a single supplier for a given product, it is good to have an alternative as a risk mitigation strategy.

Predictive and prescriptive analytics solutions

The complexity of supply chains makes it nearly impossible to compete using traditional approaches. Therefore, there is a need for a more intricate solution to predict optimal supply chain routings, mainly taking advantage of prescriptive simulations and models.

The Need for Predictive and Prescriptive Analytics Solutions

The complexity of supply chain transportation management systems together with supply chain intricacy indicates that a different approach is needed. While there may be good reasons for separate TMS and supply chain software solutions, the degree of interdependency between these solutions highlights the need for increased visibility into both the supply chain and transportation logistics. The analytics platforms incorporates financial impact analysis and inputs in addition to other areas outside the supply chain.

The logistics market is a big market that is estimated to be worth billions of dollars across the globe. This means that many businesses are affected across all sectors, ranging from e-commerce and fashion to the high-tech and pharmaceutical industries. With the beginning of the age-old processes that have seen shifting demands caused by technology and the internet age, it has become difficult to satisfy the needs of the customers. As such, logisticians and business executives must find ways of addressing new problems and understand how new technologies work. Here are big ideas to transform your logistics in the modern dispensation.  

1. Boost visibility

The first step in attaining efficiency in operations is to boost visibility. This can be achieved with the help of technology. For example, during the pandemic, companies implemented radio frequency (RF) scanning to help in the packaging of orders when online sales were skyrocketing. RF scanning in allowing easy accurate and fast-tracking of products. Scanning and capturing the data faster help employees boost efficiency.

Real-time solutions, as indicated by the name, helps track the location of employees, products and equipment. By linking data with ordering and transportation systems, workers can be directed to pick items that are closer to them. Product visibility increases worker and order fulfillment and builds trust between customers and the company.

2. Automation

Automation is proving to be a critical component in supply chain and logistics. With the advancement of this component, you need to ensure that you adopt the right automation techniques. Automation using data-driven software to improve operational efficiency in machines offers various solutions to logistics firms. Full automation of areas such as container terminals using computers and programmed cranes to unload cargo will enhance efficiency and increase production. Furthermore, it will improve cargo-handling performance while minimizing labour costs.

3. Partner with a provider

Labour costs have been on the rise lately. As such, you need to find a way of combating these costs. The first step you should consider is to invest in partnerships with providers and invest in technology to allow you to spread the costs and possibly share the burden. Logistics firms can capitalize on third-party logistics (3PL) providers and their technology that could have been out of reach due to costs. With the rise of e-commerce, businesses are now looking for partnerships and integration of 3PLs that can integrate with e-commerce platforms like Shopify.

4. Omnichannel shipping

Omni-channel fulfillment is becoming a reality in the logistics sector. It is being spurred by the shifting approach and the necessity to meet the expectations of the customer. According to Harvard Business Review, e-commerce is driving traditional retailers to offer more omnichannel touchpoints to increase the loyalty of the customers. Furthermore, they help provide a seamless and easy way to shop regardless of whether it is done digitally or in-store. For modern logistics firms to experience success, they have to navigate the omnichannel complexities within their supply chains.

5. Think about robotics

Unlike automated machinery, robots are designed to carry out many jobs at once. This makes their applications in the logistics realm endless considering the increasing demand for the speedy delivery of goods and hastened operations. With many orders, most of them in the e-commerce sector, it is about time you start thinking about robotics to enhance operational efficiency and speed. This enables you to meet growing online sales.

Companies like Amazon have set the bar with the adoption of robots from as early as 2012 when it purchased Kiva robots. The adoption of robots by Amazon opened a robot arms race with more companies now venturing into robotics to boost their performance and efficiency. To stay competitive in the supply chain and logistics, you have to adapt speed and efficiency, which are some of the things offered by robots.

Transacting business in the supply chain generally means communicating orders via EDI formatted files or some other equally rigid set of rules. The reasons are easy to understand; order times are critical and specifications for orders are complex so their formats need to adhere to formats that can be instantly read by computerized systems.

EDI requirements may be rigid but they change frequently so there’s some reason to believe that there is in fact, flexibility within the order process. But getting the details wrong causes errors and costs money. How will this tight connection fare in the age of what’s called ‘Industry 4.0’ as new technologies are brought into the mix? Is it possible that the long-standing EDI format will be replaced by directly connected machines (IoT) that avoid the details of creating and processing orders? Or will the deeply embedded format keep business at a slower pace than might be possible if things changed?

Industry 4.0

Internet of Things (IoT) is impacting manufacturing, shipping, warehousing, delivery, and even customer support by adding smart devices to things that have traditionally been, well… dumb. Dumb in the sense that they don’t communicate or have any way to sense their surroundings. That’s changing rapidly as we approach the widely touted 50 billion IoT devices expected to populate the earth by 2020. Whether any particular company wants to move toward these automated pipelines is as moot as those who declared they were not abiding by Walmart’s demand to implement EDI years ago.

Manufacturing facilities around the globe are adding smarts to their machinery or replacing old machines with newer and smarter ones that can go beyond the basics of their intended functions. They are attached wirelessly directly to their company’s management and ERP systems and communicate their current status. They take instructions about manufacturing conditions to adjust their speed and can even sense variations in the materials they work with and adjust their actions to create products that meet required specifications.

The data passed between those machines and the systems that control them amount to magnitudes of data that never existed meaning that traditional manufacturing facilities that operated manually and on a completely analog basis are becoming digital factories. The data itself presents both issues and opportunities for every point along the supply chain because it’s now possible for the end customer to be aware of the status of the product they expect to purchase, and for the manufacturing machine to know how many units it needs to build to meet demand.

Flexibility stretched

Every participant in the supply chain is being armed with more data than they have ever encountered. Their first challenge is to collect and store it; in itself a mundane IT task of managing storage and connectivity. But what is done with that accumulated data as it passes along the chain is what will define the next generation manufacturer, transport company, retailer, and even the end customer. Those that devote the time and resources to understanding, then imagining how Supply Chain 4.0 will look.

It’s been a while since Walmart first insisted that its suppliers moved to its digital order process. Back then the prospect of using EDI rather than fax or phone to place orders seemed like a technological hurdle. And in fact it was a significant hurdle that plenty of suppliers bucked against. But today Walmart’s tactics have become accepted and electronic order processing is no longer the pariah it once was. Now the retailer is making another mandate to its suppliers. But this time it’s not about what but where.

Amazon’s Web Services (AWS) has been the go-to supplier of cloud based software deployments and an overwhelming number of companies have put their online software there. It’s easy, reliable, and competitively priced. But now that Amazon is competing directly with Walmart for retail business Walmart doesn’t want the digital guts of its business hosted on a competitor’s site. That’s understandable, and in fact in 2014 the company moved its entire ecommerce presence to the cloud - and not Amazon’s cloud.

Our colleague Steven J. Vaughan-Nichols explains the move and strategy here. 

So where’s the mandate?

It isn’t enough that Walmart hosts its own data away from AWS. The retailer doesn’t want its suppliers hosting its data and the transactions they process on its competitor’s cloud either. The most recent mandate instructs suppliers to move their systems off AWS. They’re apparently fine with alternate cloud vendors like Microsoft Azure who are not direct competitors, but Amazon is a no-no. 

To be clear, the mandate (for now) is directed at tech providers. So product suppliers who host their own systems on AWS may not be affected. But the move may turn out to indirectly impact product suppliers if their EDI service providers host their applications and data on AWS.

The ripple effect

Amazon has done a great job of delivering cloud computing facilities that make it easy for companies to deploy their software services. In fact it may be the default choice for smaller EDI service providers because they can concentrate on developing their systems and delivering high quality customer support while leaving the heavy lifting of server farms and data centers to Amazon.

If your EDI provider has received a mandate letter from Walmart to shift its cloud hosting services you can bet they are scrambling to meet whatever deadlines are being required. Their revenue is reliant on delivering their customers’ transactions (your transactions) to and from Walmart and every other trading partner you deal with. And because of the depth and breadth of Walmart’s vendor base nearly every EDI service provider has connections to Walmart.

Be proactive

Don’t know if you will be affected? Ask your EDI service provider where their applications are hosted and how they are responding to Walmart’s mandate. Either your provider will need to change or you will need to change your provider if you want to keep your business relationship with Walmart.

 

Moving EDI data around the globe is old hat to most of the folks reading this ec-bp newsletter. Managing the connections and translations can get complex and picky when it comes to the details of the files and the changes that need to be incorporated into translators to make processes flow properly. For most EDI practitioners, their roles are fairly well defined and fit well with established concepts. But as mobile devices take over I think the line between what is EDI and what is associated with end user interaction is changing.

 

EDI is a significant source of big data. Of course that's no shock to anyone dealing with data storage or a VAN bill, but when you consider the volume of transactions and the number or companies involved, it would seem that there is a wealth of data in those transactions. The data now covers (depending on the trading partners) every aspect of the order process, from initial P.O. to final payment, with plenty of status updates along the way. So, what can be learned from all the data? It turns out that when looked at as an aggregate and put through the right analytical processes, there's plenty to be learned - and predicted.

Being able to use the data created by both the supplier and customer to understand the sales cycle can be a great advantage to both companies who are looking to make the most of their resources in an increasingly competitive environment. The addition of CPFR (Cooperative Planning, Forecasting, and Replenishment) can go a long way to maximizing margins and minimizing mistakes.