According to MIT, companies are using MIT research to strengthen supply chains. 

In February 2020, MIT professor David Simchi-Levi predicted the future. In an article in Harvard Business Review, he and his colleague warned that the new coronavirus outbreak would throttle supply chains and shutter tens of thousands of businesses across North America and Europe by mid-March.

Read the article MIT

A government watchdog organization reports that the Defense Department should keep better track of supply chain risks, reports FCW.

The Defense Department should keep better track of its cybersecurity and supply chain risk management plans, according to a recent watchdog report.

Read the article FCW

According to Georgia Tech News, Georgia Tech’s Advanced Technology Development Center is working with Home Depot to create a Supply Chain and Logistics program.

The Home Depot®, the world’s largest home improvement retailer, is working with Georgia Tech’s Advanced Technology Development Center (ATDC) to create a new program focused on Supply Chain and Logistics startups (SC&L).

Read the article Georgia Tech News

Improvements to the cold supply chain will help the poultry industry, reports WATT Technology.

Advances in cold chain and refrigeration technology can improve poultry supply chain efficiency, help reduce costs and ensure sustainability from farm to fork.

Read the article WATT Technology

In 2020 and 2021, supply chains reached their breaking point due to the pandemic. However, in 2022, there is some semblance of recovery as most services come to their pre-pandemic levels. Despite the challenging times in the past two years, there are many lessons that businesses can take from the occurrences. Businesses need to rethink their approaches to material sourcing and logistics. Businesses can capitalize on the problems they faced last year to ensure that their supply chains recover fully and are resilient enough to face the potential problems they encountered in the past year. This comes down to investing in artificial intelligence (AI), Machine Learning (ML) and automation, all of which are critical in the digitization of the supply chain and diversification of manufacturing.

AI, automation and machine learning investment

The global supply chain was made unbelievably unstable during the unprecedented COVID-19 pandemic. This caused a shift in thinking about how to recover and create a robust future supply chain. With these challenges, companies are now focused on improving processes, minimizing time, and creating transparency. According to Gartner, at least 50% of large global companies will invest more in AI, advanced analytics and the internet of things to advance their operations by 2023.

With AI, Machine learning and automation, enterprises can become more transparent and develop a 360-degree view of the supply chain while proactively dealing with the possible disruptions. Furthermore, AI can analyze vast amounts of data, provide operations visibility, and improve decision-making. AI has the power to do everything ranging from demand forecasting to end-to-end transparency, which are some of the most critical components in the supply chain. AI, for instance, can alert businesses on the upcoming severe weather event and the possible disruptions. The systems can also suggest how to counter the identified bottlenecks in real-time. By predicting disruptions to the transportation, positive or negative demand problems and production issues, companies can intervene and adjust their supply chain processes accordingly promptly. According to McKinsey, logistics costs will improve by 15 percent, inventory levels by 35 percent and service levels will improve by 65 percent compared to the competitors. Generally, the payoffs made possible by AI, automation, machine learning and the internet of things are a lot, and businesses can take advantage of them to enhance their recovery post-pandemic.

Supply chain and manufacturing localization and diversification

The pandemic has shown us the effect of depending on manufacturers far from home. Chip manufacturing is one of the industries that suffered the most during the pandemic. As such, companies and countries have learned the need to keep chip manufacturing localized and also diversified. The pandemic made countries aware that lack of diversification leaves the supply chain vulnerable in case a disruption of a high magnitude occurs. For example, with China being the leading manufacturer of various products, the world would have a dire shortage if its supply chains were affected by a serious disaster. Although companies previously moved their manufacturing operations abroad to reduce the cost of operations and for greater profits, efforts are being made by most of them to bring their operations closer home because they have learned the challenges associated with overseas manufacturing. According to a report by the European Commission, Europe is highly dependent on the Asian nations of China, Vietnam and Taiwan, as well as Brazil in imports of items like batteries, raw materials and semiconductors. With this revelation, the European nations have bolstered their supply chains by supporting diversification of sources and creating new policies that will open up other sources of imports instead of depending on the above countries.

COVID-19 has created a significant imbalance between the supply and demand of goods, affecting global supply chains. At the height of the pandemic and lockdowns, every part of the value chain was put under stress, from raw material sourcing to the end customer. Furthermore, areas like commercial, operational, financial and even organizational resilience were put under an unexpected test. The stress on the value chain during the COVID-19 period highlighted risks and gaps in the resilience of every company, including the bigger ones. As CEOs look to make things better to avoid large-scale disruptions in the future, some believe that innovation is the only route to resilience, while others believe that increasing investment in disruption detection will bear good fruits.

Regardless of the route you take, here are some solutions to trends that you need to watch so that you can deal with supply chain issues in the future.

1. Driver retention

Drivers are important in a supply chain because they ensure products move from one place to the other. These individuals ensure that supply chains do not break down. Since trucking is the primary source of transportation of cargo, a shortage of trucking capacity will lead to containers sitting idle at the port. Without the movement of finished products and raw materials, goods cannot enter the inventory processes, and businesses will not sell. This means that customers and companies will suffer. As we enter a post-pandemic era, companies will begin investing more in driver retention and trucking to solve potential future problems observed during the pandemic.

2. Supply chain localization

With the challenges that emerged from the pandemic, order fulfillment will become more localized. Companies will leverage various locations for order fulfillment to shorten the delivery times. Today’s consumers require everything they need to be available for fast fulfilment and at a reasonable price. This can only be made possible with the localization of fulfillment. With the highly charged competition in the market, fast delivery can be the key differentiator. This is the reason for the increasing same-day delivery offers by companies.

3. Agile supply chains and advanced technologies

The supply chain management technology landscape is changing faster than anticipated. To keep up with the fast pace, your processes must be automated. Furthermore, systems and data need to be integrated, and workers must have new resources. On the other have, managers of supply chains must have the right information and better visibility. This means investing in advanced supply chain optimization platforms that provide all the above components. When reaching the systems with all the above attributes, focus on the needs of every decision-maker in the company and what can give the customer the best experience.

4. Forecast the inventory and delivery needs

The last mile delivery volumes are increasing, and this is no surprise. However, how you prepare for peak season is what matters. Furthermore, the way they know what to expect regarding order demand, delivery, processing and dealing with inventory also matter. With many technologies available today, there is no need to run supply chains in the dark anymore. Instead, use the available supply chain management technology to forecast the inventory and the delivery of products requested by the customer. These technologies allow you to know exactly what to expect to deal with it before time. Technology allows you to increase visibility into the supply chain data like never before. Big data and predictive analytics are still untapped resources that can offer insights which will help anticipate or respond to happenings or disruptions. Insights and analytics can be leveraged to improve the supply chain.

The COVID-19 pandemic was indeed the hardest disaster that man has ever faced. It was the worst nightmare for many industries, resulting in massive losses. One of the most hit areas by the pandemic is the supply chain. With the closure of many airports and ports to curb the spread of COVID, there were rippling disruptions that continue to hurt the markets to date. Although 2020 and 2021 were the toughest years for supply chain providers, we continue to experience challenges even in 2022. Below are challenges that supply chains are struggling with in the year ahead.

1. Port congestions

There have been the longest waiting times for ships heading to ports across the world throughout the past two years. For example, in Long Beach and Los Angeles, dozens of containers were waiting to unload cargo from China. The gridlocks in ports across the world created bottlenecks at the loading and unloading stations, which affected domestic supply chains. While port congestion is nothing new, the type of congestion experienced at the peak of the pandemic was historical and continues to affect supply chains to date.

2. High freight costs

Trucking and transportation costs reached historic highs in 2020 and 2021. The prices for sea freights skyrocketed alongside the airfreight, which followed in the increase of the costs. This sudden increase in costs made it difficult for companies in the supply chain and retail sector to cope, as more funds were required. As supply chain professionals look into the future, they must understand the causes of the rising freight costs and possible solutions to the emerging problems.

3. Workforce and labour shortages

The COVID-19 period has been riddled with uncertainties regarding the workforce and shortages of labour. This has complicated the recovery process more as some of them still encounter a problem getting the right number of people to work. There is a shortage of both the white and blue colour workers in terms of their skills and numbers. Apart from the challenges concerning labour, other non-COVID-related factors need to be addressed accordingly. For instance, emerging technologies have changed the way the supply chain operates.

4. Commodity pricing

Supply chain professionals are facing the challenge of fluctuating pricing of commodities. They are expected to know the categories more than just being negotiators. However, with the fluctuating commodity pricing, it is not easy to understand where the prices will go next. Furthermore, spending transparency remains poor.

5. Restructuring supply chains

While time will heal some problems in global supply chains, it is time to restructure some aspects of it. As we enter the middle of the year, companies must seek more reliable means of procurement. Whether this means reshoring, diversification of suppliers or new agreements with careers, this will largely depend on the nature of the supply chain as well as the intent of the company. Regardless of the route, they decide to choose, leaders must be decisive in recognizing the need for change and be willing to tear down and build new partnerships. As they restructure supply chains, executives need to look broadly at the chain of custody issues and business struggles. Leverage multiple suppliers for different goods and strategically align with partners that have predictable supply chains.

In summary, supply chain companies have another chance to rebuild their supply chains and reassess their budgets and planning. Furthermore, they can now invest in new technology and identify and retain leaders. Supply chain challenges will continue to the end of the year, but the good thing is that they will become more predictable if one tackles them.

Supply chain issues are spread across industries and countries. For small businesses, it can be a challenge keeping popular items stocked and dealing with impatient customers if you have a retail outlet or an e-commerce store. However, you can still make things better if you can develop a concrete strategy to avert some of the problems and keep the operations of your business running smoothly. Here are some supply chain management strategies to get you started.

1. Select the right suppliers

As a serious business, you should have a list of requirements that your suppliers understand. Therefore, make your requirements clear to all suppliers from the word go. Select the ones that meet and adhere to established standards for equipment and services safety performance. Also, ensure they are capable of producing consistent quality.

2. Have multiple suppliers for every product

They say never put all your eggs in one basket. That applies to supply chains too. As a business, you do not want to disappoint your customers at any given point. To ensure things are always working and your customers are satisfied at all times, never rely on a single supplier per product. In fact, you should have multiple suppliers for each product to ensure that if one fails, another one can meet the requests. Many disasters and emergencies such as fires, floods or transport issues can affect fulfilment. Therefore, having various suppliers ensures you get what you need at all times.

3. Invest in continuing education

Most organizations nowadays have no resources to carry out reviews and improvements. However, those people you have in your organization must be properly educated on how to track and identify issues in the supply chain and quickly find solutions to address the identified issues. It can be difficult to select the right education and development programs for your teams. However, you can decide on a combination of in-house and external programs. As you embark on this mission, it is good to ask around and see where your staff are likely to gain the most value and look for practical programs.

4. Be flexible

With the unpredictability of the supply chain, you may never know when a certain product will become scarce or when a disaster can occur and affect the movement of products across the supply chain. Therefore, be proactive and anticipate problems in the supply chain at all times. Research on solutions to certain problems and alternative suppliers, from different regions. With such an approach, you will be able to sustain your operations and maintain your stock, even if a certain supplier is not able to fulfill your needs. Be creative and offer alternative options for your customers. Research the best alternatives that will satisfy your customers to ensure you always have something for them.

5. Encourage regular communication

Communication is an important component of any business without which customers will be unsatisfied and may opt for others. The same is true when it comes to suppliers. As a retailer, you do not want to get your suppliers off-guard in different areas. The only way you can ensure all your suppliers and customers are with you is through constant communication. Let them know what is coming and when. Let them understand your plans and build a dialogue, which is critical for trust. Through dialogue and continued engagement, your customers and suppliers will work with you and a strong relationship can be built.

6. Build mutual trust

Trust is an important thing to all businesses. Therefore, as a business owner, you must keep suppliers in the loop regarding the upcoming projects and count on them to help out. With proper and timely communication and transparency, you can build a strong coalition based on trust that can help you meet the needs of your customers.

The concept of supply chain transparency is nothing new. It has been here for a decade and a half. However, it has gained fame over the past few years in the wake of the rising customer demand for information regarding the movement of its products across the supply chain. Furthermore, there is an increased interest from governments, NGOs and other stakeholders who seek information from the supply chain service providers. With these demands, the reputational costs of failing to do so are high.

What is Supply chain transparency?

Supply chain transparency means that a business knows exactly what is happening in every stage of its supply chain. The information about what is taking place is communicated factually internally and externally. The information that should be communicated includes product quality and safety standards, raw material sourcing, labour practice, environmental protection, and sustainability. With supply chain transparency, it is easy to build trust between suppliers, companies and customers since a transparent supply chain provides an image of a business that is not only honest but is also straightforward in its operations and practices.

However, a genuine supply chain transparency can only be achieved if the information is factual information and not statements which are expected to be taken in faith. Unlike in the past, today’s consumers are no longer ready to give a brand the benefit of the doubt if there is no detailed information regarding the history of the product.

Steps of ensuring supply chain transparency

The first step before anything is to ascertain where your organization falls with respect to transparency. If you find holes in transparency, you have to identify strategies to seal them and ensure you get the necessary trust from the customers. Here are a few ways to do so.

Gauge risks and set goals

There are various tools and approaches available to gauge the risks you might encounter. You can do this from past disruptions, supplier-related problems or existing regulations. This step may entail plotting internal and external stakeholder interests through materiality assessment. This approach allows you to understand the risks better. After understanding the risks, set goals that you want to achieve.  

2. Visualize the supply chain

After identifying and prioritizing risks, you can visualize the target supply chain. This will allow you to understand the flow of goods, map suppliers and processes, and expose existing information. Visualizing allows you to understand the flows, suppliers involved and the processes. Visualization should align with the stipulated goals.

3. Collect actionable information

Mapping the supply chain is not the end of everything. Rather, you have to gather information on practices and performance to get insights into the potential risks, opportunities to improve your operations and information gaps. You may need to track units, batches or lots of products and profile them accordingly. After identifying the chain of custody, you will need to verify the practices. Labour practices and best practices can only be established with proper information.

4. Engage

With actionable information at hand, you can easily choose the right approach to engage in the supply chain. This will involve developing a program designed with critical key performance indicators. The aim of engaging is to address specific issues like labour-related risks, environmental impacts and the supplier sites and sources of origin that are not known clearly. The engagement process will include contacting suppliers, collaborating, supporting and monitoring. Engagement may also necessitate third-party partnerships to gain expertise, which is sometimes unavailable internally. An example is Starbucks has for years partnered to build an ethical sourcing program with Conservation International for its coffee, covering various social and environmental programs.

Last Thursday, Georgia Governor Brian Kemp declared a State of Emergency amid supply chain disruptions. The executive order went into effect on Saturday April 16^th. As a result of the Covid-19 pandemic and an already stressed supply chain – Georgia has not been able to recover as quickly as they had hoped.

The five-page executive order declared -  “Despite the state’s successful mitigation of the public health impacts of COVID-19, Georgia supply chain has yet to fully recover and is still experiencing severe disruptions.”

Price gauging was also prohibited under the order (or the act of charging customers an exorbitant amount of money amid a crisis) for goods and services like food and fuel with the order calling it “detrimental.” 

In his order - Gov. Kemp also suspended the number of hours that commercial truck drivers can work "to ensure the supply chain for all supplies, goods, and services throughout Georgia is uninterrupted." The official document was quick to point out that drivers should not operate a vehicle while they are sick or tired.  Truck drivers must also be given at least ten hours off before being required to return to work upon notifying their motor vehicle carrier of fatigue.

The order also raised the weight and height limit of a given truck or trailer from 80,000 pounds with a maximum width of 8 feet, 5 inches for 5-axle trucks to 95,000 pounds and 10 feet allowed truckers to carry more goods at one time.

The order lasts for 30 days and is set to expire on May 16, 2022.

The supply chain crisis is a global issue and is affecting the entire United States. Since 2020, the country has been facing a supply chain shortage that has caused massive headaches for government officials as shelves stay empty and inflation ticks up across the country.

President Joe Biden recently pledged support for truckers through the federal Trucking Action Plan. In a press conference late last year President Biden spoke directly to truck drivers stating – “You all quit, everything comes to a halt.”

The Bipartisan Infrastructure Law also pledged investments for roads and bridges as well as higher pay for truck drivers. Biden went on to say, ““This country will be counting on you more than it ever has. So, you should be able to count on us to keep investing in you and your families.”

U.S. Transportation Secretary Pete Buttigieg pledged - “We must do more and do better to recruit more people into the job and to support them so they choose to stay in the job.” He went on to add -
“And, that’s more than saying thank you, it is concrete, specific actions to help our trucking workforce thrive in this career. To make sure that trucking jobs are as high quality, as safe, and as well paid as they ought to be.”

As many truckers retire – it has created a shortage of drivers – roughly 80,000. According to the American Trucking Association this is an all-time high in the industry. To alleviate the need for drivers the Biden administration has begun to discuss plans to reduce the amount of time it takes for drivers to get a commercial license while recruiting future drivers across the United States.

In the logistics sector, one of the constant occurrences and unwritten rules that one must keep in mind is that disruptive forces are always at play. These uncertainties and disruptive forces reshape how organizations think about technology, business conduct and how they look into the future. For the logistics industry, market trends affect the sector significantly. The trends range from new technologies to regulations, strategies and tactics needed to ensure compliance. With these trends having a significant impact, adaptation is needed to remain competitive in tough markets. Only companies that embrace the latest trends and use them to capitalize on both the traditional and established technologies are the ones that succeed.

Here are the trends you need to be prepared for in the logistics sector.

RFID

The Radio Frequency Identity (RFID) chips have gained fame for over a decade. They promise to offer real-time tracking of containers and products and provide information. However, although most companies have invested in RFID, they have not seen a return on investment (ROI). While RFID can be expensive for logistics companies, it plays a crucial role in visibility, which is currently a game changer in the industry. RFID systems can provide precise location and data in real-time when integrated well.

Blockchain

Today, nobody in the world can talk of new trends without mentioning blockchain somewhere in the conversation. This is an area that has seen a lot of focus from almost every industry, including the logistics sector, where it is changing fortunes. In 2022, for example, it is expected that the worldwide spending on blockchain solutions will reach 11 billion US dollars, according to Accenture. The supply chain has been a steadily increasing trend in the global logistics space for the last few years. Successful adoption of blockchain will automate the logistics sector, remove third parties and reduce the cost of operations.

Omnichannel shipping

Omnichannel order fulfillment is a new reality in the logistics space. This is emerging as a key area at a time when customer expectations in the retail industry are increasing. According to Harvard Business Review, the changing customer demands drive retailers to offer more omnichannel solutions to raise customer loyalty. This goal is to provide a seamless and easy approach to shopping, no matter if it is to be done digitally or in-store. Due to the omnichannel trends, the evolution of last-mile shipping methods has raised the complexity of the supply chain.

Big data

Big data has been proven to be one of the biggest success stories of many industries, including logistics. UPS, for example, the biggest success story in the logistics sector, has succeeded in big data through its data collection, analysis, and forecasting strides, resulting in efficiencies and cost savings. With the increasing installation of sensors on trucks to measure speed, braking, location, and idling time, there is a need for a technology that collects, stores and analyzes it to offer crucial information for decision making. Such information can be useful in decision-making.

Warehouse automation

The automation market has grown significantly over the past decade. According to a 2019 report, it is expected to grow at a CAGR of 12.6% over the next five years, making it one of the key trends in the supply chain and logistics industries that must be closely followed. With automation, warehouses are cutting costs while boosting productivity and efficiency through technologies like a robotic arm, automated storage and retrieval (ASRS) and automated guided vehicles (AGVs). Amazon, for example, is a leading example of companies that have embraced automation. This will save over $18 billion in operating costs annually. Furthermore, automating transportation will reduce overall delivery costs by over 40%.

The global logistics business has grown tremendously over the years in both size and complexity. Keeping track of everything and ensuring a smooth motion and fewer obstacles is a massive challenge. Although some may think that container shipping is effective and has a few challenges, they also have problems. As a shipper, the best way to minimize risks during shipping is to ensure transparency by tracking shipments closely. With real-time end-to-end visibility, you can avoid unpleasant surprises regarding the location of your container. Here are some challenges associated with container shipment.

1. Lack of clear communication strategy

Miscommunication is one of the biggest challenges in container movement. This is often the case when you rely too much on carriers and freight forwarders for updates. There is a possibility that poor communication between you and your customers can occur, which can be catastrophic to your relationship. In a society where customers are increasingly demanding real-time visibility over the movement of their shipments, proper communication is integral in the entire chain of supply.

The solution to these issues is to use proper container tracking systems that track shipments in real-time. Such systems also share tracking data with the customers for their specific shipments. With this information, the supply chain is made transparent, and trust is built.

2. Security concerns

Security is a key concern for transport and logistics companies. With shipment passing through many hands before reaching the destination, it makes it a target of malicious individuals. This makes security a key challenge that must be addressed accordingly. Shipments can be compromised from any point, be they at the storage facility or during the exchange to another truck. Without visibility, the security procedure can be broken, and products can be compromised. The solution to this is to keep track of the shipment at all times. Real-time movement and auto-update can help you discover possible delays and follow-up.

3. Delayed product delivery

Customers have become highly demanding and always want to receive their items in time. Therefore, product delivery time is an area of expectation for everyone. With the fame that next-day and same-day delivery services are gaining, long-distance shipments are increasingly becoming demanding. Therefore, timely delivery of shipments will continue being a challenge, as customers increasingly demand faster delivery. This is even worse during peak seasons when demand is high. At such a time, customer satisfaction is compromised.

4. Capacity crunch

Although air transport has advanced over the years, ocean or sea transport continues to drive global trade more than any other mode of transport. However, with the ever-increasing volumes of shipments caused by disruptive events such as the COVID-19 pandemic, the available space and capacity to handle shipments often shrink. This leads to inconsistencies in schedules, which affects companies and product delivery.

5. Infrastructural issues

With the increase in shipments and the emergence of bigger ships in the markets, infrastructure is failing to catch up with the rapid expansion. Some ports lack sufficient space or facilities where containers can be placed. This has made infrastructure one of the key concerns in transport and logistics, especially in developing nations where deliveries are increasing but ports are not equipped to handle the growth.

6. Changing customer behaviour

With many transport and logistics companies around as well as many manufacturers, customers have increasingly become demanding. The availability of many alternatives has led to improved services, which gives power to suppliers to choose whomever they want. The changing customer behaviour has put pressure on shippers who need to improve their services to meet the new demands.

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.