According to Supply Chain Dive, Walmart will offer local fulfillment and delivery solutions. 

The partnership will help retailers better serve customers in the omnichannel era, Walmart and Salesforce executives said on the call. It also provides greater access to more cost-effective local fulfillment and delivery solutions they couldn’t develop themselves.

Read the article Supply Chain Dive

Symphony AI and Oracle have teamed up to offer AI enhanced solutions for supply chain management, reports PR Newswire.

SymphonyAI, a leader in high-value enterprise AI SaaS for strategic industries, today announced a collaboration with Oracle (NYSE: ORCL) to offer SymphonyAI solutions on Oracle Cloud Infrastructure (OCI) using key services including Oracle Exadata Database Service, GPU-accelerated compute, and performance monitoring.

Read the article PR Newswire

According to VentureBeat, artificial intelligence could help lessen supply chain problems.

The supply chain crisis has been much in the news of late. It’s not difficult to understand why

Read the article VentureBeat

According to Supply Chain Management Review, retailers need to consider the supply chain in reverse.

Managing product returns has always been a headache for retailers. 

Read the article Supply Chain Management Review

With companies’ continued reliance on global supply chains, managing environmental, social, and governance (ESG) risks is becoming increasingly important. ESG risks refer to potential negative impacts on a company’s environment, society, governance and operations. These risks can arise at any point in the supply chain and can have serious consequences for businesses if not properly addressed. One example of an ESG risk in the supply chain is climate change and emissions. If a company’s supplier is not taking steps to reduce their carbon footprint, it could lead to higher emissions and contribute to climate change. This could result in regulatory consequences and damage the company’s reputation and potentially lead to financial losses.

1. Human rights violations

Human rights violations can be a significant risk in the supply chain. If a company’s supplier engages in unethical practices such as forced labour or child labour, for example,  it can lead to negative backlash and damage the company’s reputation. This can dent the company’s standing and force customers away.

2. Pollution

Pollution is a significant ESG risk that can arise in the supply chain. It refers to the contamination of the environment, including air, water, and soil, by harmful substances or waste. Pollution can have serious consequences for the environment and public health and can also negatively impact businesses, regardless of size.

3. Corruption

Corruption is a critical ESG risk that can arise in the supply chain. If a company’s supplier engages in corrupt practices or does not properly manage their operations, it can lead to financial losses and damage its reputation. For instance, the government may temporarily freeze or completely stop the operations of the corrupt supplier, dealing a blow to those depending on it for products,

4. Labor abuses

Labor abuses are also potential ESG risks in the supply chain. If a company’s supplier is not paying fair wages or salaries to its staff, it can negatively affect the company’s standing with the key stakeholders and potential investors.

5. Resource depletion

The impact of ESG risks on businesses can be significant. Reputational damage and loss of customers are common consequences of failing to address ESG risks in the supply chain. In addition, there may be legal and regulatory consequences for companies that do not properly address ESG risks. Financial impacts can also be significant, with higher costs and decreased shareholder value being common outcomes.

6. Climate change and emissions

Climate change and emissions are significant ESG risks that can arise in the supply chain. Basically, climate change refers to the long-term warming of the earth’s surface and atmosphere caused by increased greenhouse gases such as carbon dioxide. Emissions refer to the release of these greenhouse gases into the atmosphere, often due to human activities such as burning fossil fuels. Failure to address climate change concerns can hamper a supply chain company’s relationships with customers sensitive to matters of the environment. This can hurt profits.

Addressing ESG risks in the supply chain

So, what can companies do to address ESG risks in their supply chain? One effective strategy is to conduct risk assessments and audits to identify potential risks and take timely action to mitigate them. Implementing policies and procedures to address ESG risks can also be helpful. Working with suppliers to address identified risks can be crucial in ensuring that the entire supply chain operates responsibly. Finally, reporting on progress and being transparent about efforts to address ESG risks can help build trust with customers and stakeholders.

In a nutshell, addressing ESG risks in the supply chain is critical for the long-term success of businesses. By taking proactive steps that help to identify and mitigate these risks, companies can protect their reputation, avoid legal and regulatory consequences, and ensure financial stability. At the same time, addressing ESG risks in the supply chain can also positively affect the environment and society, making it a win-win for all involved.

In recent years, the importance of sustainability and social responsibility in the supply chain has become increasingly apparent. Customers, employees, shareholders and governments have started to pressure supply chain firms to ensure greater environmental stewardship and increase social responsibility. Thus, supply chain sustainability has become a crucial talking point for many people in different circles. Therefore, ensuring that this process is sustainable and socially responsible is essential for businesses' long-term success and viability.

What is Supply Chain and supply chain Sustainability?

Supply chain refers to the network of organizations, people, activities, information, and resources involved in producing, handling, and distributing goods and services. This entails everything from raw material extraction and supplier networks, to manufacturing and transportation, to distribution and customer service. On the other hand, supply chain sustainability refers to the efforts of companies to reduce their environmental impact and improve their social and ethical practices throughout the supply chain. This includes activities such as reducing greenhouse gas emissions, using renewable resources, and ensuring that workers are treated fairly and ethically.

How Does the Supply Chain Sustainability Look Like?

A sustainable supply chain is one that is designed to minimize its environmental impact and maximize its positive social and ethical impacts. This can involve using energy-efficient transportation methods, sourcing materials from environmentally and socially responsible suppliers, and implementing waste reduction and recycling programs.

What is Supply Chain Sustainability Management?

Supply chain sustainability management involves overseeing and coordinating efforts to ensure they are effective and aligned with the organization's overall goals. This includes setting sustainability goals, developing strategies to achieve those goals, and implementing and monitoring programs and practices to ensure that they are being followed.

What are the Benefits of a Sustainable Supply Chain?

There are numerous benefits to implementing a sustainable supply chain. For example, it can help to reduce the environmental impact of a company's operations, improve its reputation and brand image, and reduce its costs by reducing waste and increasing efficiency. It can also help to build trust and credibility with customers, employees, and other stakeholders.

What are the Challenges to Supply Chain Sustainability?

Some of the leading challenges include:

1. Identifying and addressing the impacts of sustainability within the entire supply chain: Businesses must consider the environmental, social, and ethical impacts of their entire supply chain, including their suppliers, transportation, and manufacturing processes. This can be a complex task, particularly for companies with global and complex supply chains.
2. Developing and implementing strategies to address the impacts: Once the impacts of sustainability on the supply chain have been identified, a company needs to develop and implement strategies to address them. This may involve working with suppliers to improve their sustainability practices, implementing new technologies or processes, or changing how goods are transported.
3. Ensuring that suppliers and other partners are committed to sustainability: To be successful, a sustainable supply chain must involve all stakeholders, including suppliers, logistics providers, and other partners. Ensuring these parties are committed to sustainability can be challenging, as it may require changes to their business practices and processes.
4. Managing the cost and complexity of implementing sustainable practices: Implementing sustainable practices and technologies can be costly, particularly for small and medium-sized businesses. Companies must carefully consider the financial implications of these investments and find ways to minimize costs while still achieving their sustainability goals.
5. Communicating sustainability efforts to stakeholders: Companies must also be transparent about their sustainability efforts and communicate them to stakeholders, including customers, investors, and employees. This can be challenging, as it requires companies to articulate their sustainability goals and progress clearly and to ensure that this information is easily accessible.

How Can a Sustainable Supply Chain be Implemented?

Implementing a sustainable supply chain requires a comprehensive and coordinated approach. Some steps that companies can take include:

• Setting sustainability goals and targets
• Identifying and addressing the sustainability impacts of the entire supply chain
• Engaging with suppliers and other partners to ensure their commitment to sustainability
• Implementing sustainable practices and technologies throughout the supply chain
• Monitoring and reporting on progress to ensure that goals are being met

In a nutshell, sustainability and social responsibility are increasingly important in the supply chain. By implementing sustainable practices and technologies, companies can reduce their environmental impact, improve their reputation and brand image, and build trust and credibility with stakeholders. While implementing a sustainable supply chain can be challenging, the long-term benefits make it worthwhile and necessary for any company.
 

As the world becomes increasingly interconnected and globalized, the challenges facing supply chain professionals continue to grow and evolve. From port congestion and rising freight costs to labour and material shortages and the need to restructure supply chains, supply chain professionals must constantly adapt and find creative solutions to stay ahead of the game. In this article, we will explore some of the top challenges facing supply chain professionals in 2022 and provide strategies for overcoming them.

Challenge 1: Port Congestion

One of the major challenges facing supply chain professionals in 2022 is port congestion. As global trade continues to grow, ports around the world are struggling to keep up with the increased demand for goods and services. This can lead to delays and increased costs as ships are forced to wait for their turn to unload and load goods.

Supply chain professionals can overcome this challenge by using data analytics and predictive modeling to forecast port congestion and plan accordingly. This can help them avoid delays and find alternative routes or modes of transportation to ensure the timely delivery of goods. Additionally, implementing advanced technologies like blockchain and artificial intelligence can improve visibility and coordination across the supply chain, making managing the flow of goods and information easier.

Challenge 2: Rising Freight Costs

Another major challenge facing supply chain professionals in 2022 is the rising freight cost. Factors such as fuel prices, tariffs, and other costs associated with transportation can make it more expensive to move goods from one place to another. This can lead to reduced profitability and competitive disadvantage for companies that rely on the supply chain to get their products to market.

To overcome this challenge, supply chain professionals can implement cost-saving initiatives, such as consolidation and optimization of transportation routes. This can help them reduce the number of trips and miles required to move goods, resulting in lower costs and increased efficiency. Additionally, leveraging technology can help supply chain professionals increase efficiency and reduce waste, leading to further cost savings.

Challenge 3: Shifting consumer demand and preferences:

Another challenge facing supply chain professionals is the changing consumer preferences and shifts in demand. As consumer tastes and preferences evolve, companies must be able to quickly adapt their product mix and supply chain strategies to meet changing demand patterns. This can be difficult, especially if the supply chain is not flexible and responsive enough to handle sudden changes in demand.

To overcome these challenges, supply chain professionals can use data analytics and predictive modeling to forecast demand and develop flexible and responsive supply chain strategies. They can also implement agile and lean practices to increase speed and efficiency.

Challenge 4: Labor and Material Shortages

In some parts of the world, labor and material shortages are becoming a major challenge for supply chain professionals. As the availability of skilled workers and raw materials becomes more constrained, it can lead to increased costs and delays in the supply chain.

To overcome this challenge, supply chain professionals can develop strong relationships with key suppliers and partners to ensure a steady supply of materials and labor. This can help them avoid shortages and maintain the flow of goods and services. Additionally, implementing agile and lean practices can increase flexibility and responsiveness, allowing supply chain professionals to quickly adapt to changes in the availability of materials and labor.

Challenge 5: Sustainability and environmental responsibility:

With the growing focus on sustainability and environmental responsibility, supply chain professionals must find ways to reduce the carbon footprint of their operations and meet increasingly strict environmental regulations. This can be challenging, especially if the supply chain is not designed with sustainability in mind.

To overcome this challenge, supply chain professionals can implement eco-friendly practices and technologies, such as renewable energy and sustainable materials. They can also work with partners to develop and implement sustainability initiatives.

In conclusion, supply chain professionals face various challenges that can impact the efficiency, effectiveness, and profitability of their operations. By implementing advanced technologies, developing strong relationships with partners, using data analytics and predictive modeling, and implementing eco-friendly practices, supply chain professionals can overcome these challenges and improve their operations.

In today’s fast-paced and competitive business environment, having an efficient and effective supply chain is essential for success. By digitizing your supply chain, you can improve performance, reduce costs, and gain a competitive advantage. One of the key benefits of digitizing your supply chain is improved visibility and transparency. With digital tools and technologies, you can track and monitor the entire supply chain process, from production to delivery. This allows you to identify bottlenecks, optimize processes, and make more informed decisions. Here are some benefits you will get when you digitize your supply chain’s quality inspection.

1. Automates data-driven decision-making

Digitizing supply chain inspection can automate data-driven decision-making in several ways. First, digital tools and technologies can collect and store large amounts of data from quality inspections, enabling businesses to analyze the data and identify trends and patterns. This can help businesses identify areas for improvement and take action to address them.

Furthermore, digital tools and technologies can automate the process of supply chain data analysis and decision-making. For example, businesses can use algorithms and machine learning techniques to analyze the data and make predictions or recommendations. This can help businesses make more informed and data-driven decisions without the need for manual intervention.

2. Improves quality and compliance

Digital tools and technologies can help your business ensure that quality inspections are performed consistently and accurately, reducing the risk of human error and improving the overall quality of the products or services being supplied. These tools and technologies can also enable monitoring and tracking of your entire supply chain process, from production to delivery. This can help you identify potential issues or risks and take action to prevent or mitigate them.

Digital tools and technologies can enable your business to store and access large amounts of data from quality inspections and other supply chain processes. This can help you comply with regulations and standards and demonstrate your compliance to regulators and other stakeholders.

In terms of diversifying suppliers, digitizing the supply chain can enable your business to access a wider range of suppliers and to evaluate and compare their performance more easily. For example, you can use digital tools and technologies to compare suppliers based on quality, delivery time, and cost. This is critical in making informed decisions about which suppliers to work with and reducing your reliance on a single supplier.

3. Accelerates speed to market

Digital tools and technologies can automate and streamline various supply chain processes, such as inventory management and logistics. This can help your business reduce the time and effort required to manage the supply chain, enabling them to respond more quickly to customer demands. Furthermore, digitization can enable tracking and monitoring of the entire supply chain process, from production to delivery. This can help you identify bottlenecks and other issues that may be delaying the delivery of products or services and take action to address them. Technology offers real-time visibility into the market with regard to goods in transit and the entire supply chain networks, allowing you to track the entire product journey from conception to arrival to the final destination via inspection and transportation.

4. Future-proof supplier relations

Digitizing the supply chain can help you future-proof supplier relations by improving communication and data sharing between suppliers and your business. This can help reduce errors and misunderstandings and make it easier for you to respond quickly to changes in demand or other factors that may affect the supply chain. In addition, digital tools can provide real-time visibility into the supply chain, allowing you to identify and address potential problems before they become major issues. This can help enhance your supply chain's overall efficiency and reliability and strengthen the relationship between suppliers and your business.

With the proliferation of omnichannel commerce, retailers up and down the supply chain are faced with new and complex tax compliance challenges. For many companies, the 2022 holiday season acted as a stress test for this explosion of new ways to buy and sell and there is little evidence to suggest a slowdown in sight. While IT teams aren’t traditionally thought of as partners to their tax department counterparts, technology has become a vital piece of the compliance puzzle.

To put this situation into context, the pandemic and resulting accelerated digitization of commerce across both traditional and emerging channels has caused a lot of friction for IT teams. The number of sales channels that retailers can sell on is astonishing and that exposes new challenges that can adversely affect the customer experience.

This has put a lot of stress on IT professionals to account for all these areas of friction. One area that is often missed—and yet is critical to business operations—is tax calculation. Put more simply, as commerce continues to become more globalized, companies will be expected to follow an increasing number of local tax rules across more and more jurisdictions.

Economic factors also play a role in this increased complexity. During adverse economic cycles, sales taxes, referred to as Indirect Taxes, tend to provide a more consistent method of funding compared to income taxes. Because of this, some states are considering reducing or supplementing their income taxes, referred to as Direct Tax with broad sales taxes. If those measures are made law, sales taxes would become an even more significant source of revenue for these states—and a significant source of headaches for businesses trying to comply.

Tax compliance challenges stemming from this explosion of sales channels aren’t always garden-variety sales tax hikes. From new environmental fees like the recent Colorado Delivery Fee to product-specific taxes on goods delivered electronically, organizations that rely on heavily manual business processes will not be able to keep up. As a result, tax departments are looking to their IT counterparts to help find a solution.

One way to tackle this challenge, be scalable for future growth and also be agile enough to weather the next disruptor, is to automate. Beyond that, IT teams should be looking for an automated solution that is function specific. For example, working with a technology partner that specializes in implementing tax compliance solutions. These kinds of partners bring an inside knowledge of the tax space and can provide mission-driven best practices for that particular function.

With all these new opportunities to sell through channels unheard of even a decade ago come a greater risk of noncompliance. Manual processes aren’t scalable enough to keep track of sales tax changes, let alone understand when, where and how a transaction should be taxed. That’s why IT departments with the know how to implement leading edge technology have become so vital to tax teams. It’s time to tear down the silos and work together to make sure transaction tax compliance is a priority up and down the supply chain.

Peter Olanday, director of consulting for vertical solutions at Vertex, Inc.

The coronavirus pandemic has affected many parts of the value chain, ranging from raw material sourcing to the customer. It has significantly tested various aspects of the companies, such as commercial, operational financial and financial resilience. This challenge has highlighted the risks and resilience gaps for most organizations. With the challenges in the previous years and 2022, we can all look back and sum up the supply chain of 2022. Below is the summary of the supply chain for 2022.

1. Logistics disruption

Although 2019, 2020 and 2021 were the worst in terms of the effects of the pandemic, 2022 continued to be challenging in terms of supply chain disruption. The pandemic continued to impact businesses and consumers since the restrictions put by governments worldwide had not been completely lifted. The lockdowns and restriction of movement in South East Asia shut down major ports and Airports, mainly in China, a key supply chain hub. In last year’s festive season, from December to January of 2022, many people were affected by the pandemic, which is still being felt in some parts even as we head to a new year.

2. Multi-tier supply chain visibility

As the pandemic persists, the number of risks continues to mount, and the process continues to become harder. These challenges have exposed the lack of multi-tier visibility to monitor and manage risks. Despite the availability of multi-tier mapping tools, supply chain visibility continued to be a key challenge. Despite the presence of these tools, many organizations have not embraced them, and their customers face various challenges. Furthermore, since the first-tier suppliers are not always transparent, having a multi-tier visibility plan resolves the problem.

3. Scarcity of materials

Since the pandemic began, there have been insufficient inputs. As retailers and suppliers struggle to meet the demand amidst the unavailability of parts, supply chain companies continue to encounter problems in fulfillment due to clogged supply routes. In different industries, there have been shortages, such as a lack of foam to manufacture furniture. While these shortages are due to the pandemic, other issues, such as global disruptions of peace, have exacerbated the problem.

4. Nearshoring

One thing that many supply chain companies have learned from the pandemic is the importance of having the manufacturing hubs closer to the customer. Nearshoring reduces the risks of a breakdown in supplier networks and allows fulfillment to be achieved on time. In 2022, supply chains were strung worldwide, meaning optimal configuration is necessary for customer satisfaction. As the challenge continues, supply chain managers must think financially and the importance of de-risking their supply chains. Once a map is in place, an optimization plan needs to be developed.

5. Dependency on China

The problem of depending on China became evident during the pandemic as supply chains nearly came to a standstill due to restrictions. It is now evident that a conflict between China and Taiwan will be catastrophic, and this has already been seen with the shortage of chips and the disruption of the supply chain in the recent tensions in the region. A disaster such as an earthquake in Taiwan and China will affect the supply of goods and make crucial components. The US should bring manufacturing closer to Mexico and Canada, where it is easy to transport goods to the customers even when there is a problem in the global supply chain. A lot of work is needed to create an integrated transportation network between these destinations. Still, the good thing is that the distance will have been cut significantly, and the uncertainty affecting the global supply chain will be dealt with.

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.

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.

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.