AIM names its top cutting edge technologies, reports Supply Chain Quarterly.

The industry group for auto-ID technologies has named the winners of its annual contest for cutting edge technologies in the automatic identification and data capture (AIDC) industry, Pennsylvania-based AIM said.

Read the Article Supply Chain Quarterly

AI has assumed a place in supply chain technology, but now ChatGPT could begin to appear in supply chain tech, reports Freightwaves. 

If there were a contest to find the buzzword that sums up the Gartner Supply Chain Symposium, the winner would be clear: AI. Companies boasted about their artificial intelligence bona fides on the floor of the recently concluded show. 

Read the article Freightwaves

According to Digital Commerce 360,  a new survey shows what digital technologies companies are embracing, and which ones still haven’t caught on. 

Manufacturers are moving down the road, implementing new digital technologies to improve their supply chain efficiency. 

Read the article Digital Commerce 360

According to Finance Magnates, blockchain technology is a ‘game changer’ for supply chain management.

Supply chain management is only one of the industries where blockchain technology has become a game-changer. 

Read the Article Finance Magnates

Supply chain management plays a critical role in the success of organizations across various industries. With the increasing complexity in the global marketplace, many companies are turning to automated supply chain management solutions to address emerging challenges. In this article, we will explore the benefits that automation brings to supply chain management processes, ranging from cost savings and increased efficiency to improved decision-making and agility.

Reduced Operating Costs

One of the leading advantages of automated supply chain management is the ability to reduce operating costs. With automation, companies can eliminate or minimize manual tasks, reducing labour costs and the risk of human error. It also streamlines processes such as inventory management, order fulfillment, and logistics, enabling organizations to optimize resource allocation, minimize waste, and achieve cost savings.

Increased Speed

Automation can enable supply chain processes to be executed at a much faster pace. Automating routine tasks, such as order processing, invoicing, and shipment tracking, allows companies to reduce lead times and improve overall efficiency dramatically. With such increased speeds, they can meet customer demands promptly, leading to higher customer satisfaction and a competitive edge in the market.

Boosted Morale

With automated supply chain management systems, companies can relieve employees from repetitive and mundane tasks. This gives them time to focus on more meaningful and strategic activities. With this shift in responsibilities, employee morale can be boosted, and so will their job satisfaction. With automation, employees are more likely to feel engaged and motivated when they can contribute their skills and expertise to higher-value tasks, ultimately leading to improved productivity and performance.

Improving Accuracy

Entering data and processing it manually can introduce errors in the supply chain. This can lead to costly mistakes and delays. However, with automated systems, such errors and mistakes can be significantly reduced by eliminating the need for manual data entry and automating data validation processes. With accurate and reliable data, organizations can make decisions that are more informed, reduce order inaccuracies, and minimize inventory discrepancies.

Smarter Decisions

With the help of automation in supply chain management, organizations can access real-time data and analytics. Such data and a wealth of information empower decision-makers to make smarter, data-driven choices. They can access comprehensive insights into inventory levels, customer demand patterns, and supplier performance. Furthermore, organizations can optimize inventory levels, reduce stockouts, and improve overall supply chain responsiveness.

Improving Time Savings

Automation eliminates time-consuming manual tasks, enabling organizations to save valuable time across the supply chain. Organizations can significantly reduce cycle times and improve overall operational efficiency with automated processes, such as order processing, demand forecasting, and warehouse management. The time saved can be redirected towards strategic initiatives, such as developing new products, improving customer relationships, or exploring new market opportunities.

Greater Agility

In a business environment that is becoming increasingly dynamic, agility is crucial for success. Automated supply chain management systems give organizations the flexibility and adaptability they need to respond quickly to market changes and disruptions. With real-time visibility into inventory levels, demand fluctuations, and supplier performance, organizations can proactively address issues, make swift adjustments, and ensure that their supply chain operations work with the continuity necessary for such a sensitive operation.

Automated supply chain management brings numerous benefits to organizations stipulated above. With the potential of automation in business, leveraging various technologies allows organizations, regardless of their size, to optimize their supply chain processes, enhance customer satisfaction, and gain a competitive edge in today's fast-paced and highly demanding business landscape. Embracing automation is a strategic investment and a pathway to success in an increasingly complex and demanding global marketplace.

As the business environment continues becoming increasingly competitive, optimizing the supply chain is proving to be critical to the success of any organization. With an efficient supply chain, you can reap big in terms of reduced costs, improved customer service, and increased profits. This article will assess the best practices for optimizing your supply chain.

1. Set up a supply chain council

A supply chain council is good for formulating strategy and ensuring the efficiency and functionality of your organization. Without this council, there are high chances of a lack of clarity in strategy and failed functionality. This increases the chances of the supply chain failing to align with the company’s overall strategy. However, by establishing a supply chain council to support your executive and the lower levels of management, you will improve communication and organize your supply chain.

2. Align Supply Chain Objectives with Business Strategy

Aligning your supply chain objectives with business strategy is the first step towards optimizing your supply chain. Doing so allows you to understand the goals of your business and ensure that your supply chain is designed to support those goals. For example, if your business strategy is to reduce costs, your supply chain should also focus on reducing costs.

3. Use Technology to Improve Visibility

Technology has been making its way into the supply chain significantly and has proven that it can play a significant role in optimizing operations. With various technologies such as RFID tags, GPS tracking, and warehouse management software, you can improve visibility into your supply chain. This will help you identify inefficiencies, monitor inventory levels, and improve delivery times.

4. Build Strong Relationships with Suppliers

Suppliers are a lifeline to any supply chain. Therefore, building strong relationships with your suppliers is critical to optimizing your supply chain. Work closely with your suppliers to improve communication, reduce lead times, and negotiate better prices because this will help you reduce costs and improve the efficiency of your supply chain.

5. Collaborate

Collaboration is important in optimizing your supply chain. By collaborating with your suppliers, customers, and other stakeholders, you can improve communication, build trust, reduce lead times, and increase the efficiency of your supply chain. It also enables you to identify and address issues before they become major problems within your organization.

6. Measure Performance

Performance measurement allows you to understand bottlenecks in your supply chain. By tracking key metrics like delivery times, inventory levels, and order accuracy, you can identify areas needing improvement and make changes to improve your supply chain. Regular monitoring and measurement of performance will also allow you to identify trends and bottlenecks in operations and make adjustments before issues become major problems.

7. Implement Risk Management Strategies

The supply chain can face disruptions from any corner, which can be costly for businesses. Therefore, you should have risk management strategies such as backup suppliers, safety stock, and contingency plans to help minimize disruptions’ impact on your supply chain. Preparing for potential disruptions can reduce the risk of downtime and lost revenue.

8. Train Your Staff

Staff is a critical component that keeps your company going. Therefore, training your staff on supply chain best practices is important. Training on topics such as lean principles, collaboration, and risk management ensures that your staff is equipped with the knowledge and skills to optimize your supply chain. It also helps improve communication and teamwork among staff members.

9. Be socially responsible

Green initiatives are no longer optional for supply chain companies. Supply chain organizations must become sustainable and socially responsible for competing and thriving in today’s markets. Although no clear legislation forces companies to go green, buyers are now considering environmentally responsible companies when choosing their suppliers. This means you will likely lose some customers if you do not conform. As the best supply chain company, you should have policies, procedures and frameworks to improve the workplace and community.

Even the Girl Scouts aren’t safe from supply chain issues as the beloved cookies have become the latest causality in the on-going supply chain woes that continue to plague the world since  the Covid-19 pandemic began in 2020.

Girl Scout Cookies have been an American tradition since the organization first began selling them in 1917. However, it wasn't until the 1930s that they started commercially baking and selling cookies for their fundraiser. Today, the cookies have become a staple in homes across the country from January to April – reminding consumers of when they themselves were Girl Scouts or memories of their families purchasing cookies from their local Girl Scout troop.

But this year may be different as one of the two primary cookie bakers are experiencing supply chain problems. The Little Brownie Bakers (LBB) located in Louisville, KY have been dealing with inventory shortages as well as power outages due to inclement weather.

In a Facebook post, LBB stated that they were “working overtime” to fix this issue. And like the Girl Scout troops and consumers they too were frustrated, promising they did not take the disruption lightly. They assured the public that they – “…understand what cookie season means to Girl Scouts, and we take our commitment to them very seriously.”

Despite their apology both the Girl Scout executives, troop leaders and consumers aren’t willing to forgive them just yet. The Girl Scouts have expressed their disappointment in the manufacturing company letting the local troop leaders know they expected more out of LBB.

Whitney Ford, a mother of a Northeast Texas Girl Scout wrote in the comment section of LBB’s Facebook post – “Supply and labor issues were predictable...a good first step would be to not promise what you can't deliver so that others dependent on you can plan accordingly instead of it being a near daily surprise of problems.”

The cookie drive is a Girl Scout Troop’s main fundraiser for the year and because of the shortages – approximately 75% of troops won’t be able to make their sales goals this year. The remaining 25% receive their cookies from a supplier called ABC Bakers. At the time of this article ABC Bakers are not having supply chain disruptions.

Due to the supply chain issues there are limited cookies available – making some cookies like the new vegan Raspberry Rally skyrocket in price on resale sites like E-bay. The organization issued a statement stating that they were “saddened” that people were making a profit off their name without supporting the troops. The statement went on to say, “The third-party sellers have ‘deprived’ troops of valuable experience and of proceeds that fund ‘critical programming’.” At the time of writing this article there are over 350 listings for Raspberry Rallys – the lowest being advertised at $13.10 per box and the highest at $499 per box.

While there are minimal flavors available for purchase online – I stopped by my local Starbucks to see if the shortage would affect in-person sales at a local pop-up booth. To my surprise the Girl Scouts had every flavor (minus the Raspberry Rallys which was always an online exclusive). So while your favorite flavors may be sold out online – you may have better luck stopping by a local pop-up or ordering through your neighborhood Girl Scout. To find a pop-up cookie booth near you – head to Girl Scouts’ website and enter in your Zip Code. 

A supply chain is the backbone of any business that intends to succeed, without which operations will be affected. The processes in a supply chain involve moving products from the point of origin to the point of consumption. A smooth, organized and efficient supply chain is important for the success of any business. As you seek to improve your supply chain, check these ideas to make your supply chain better.

1. Collaborate with Your Suppliers

Suppliers are everything in a supply chain. Therefore collaborating with them can be a game-changer for business. Work with them your suppliers to optimize the flow of goods, reduce lead times, and improve quality. Collaboration can also help you to build better relationships with your suppliers. This can lead to more favourable terms and conditions.

2. Implement a Real-Time Monitoring System

Transparency of a supply chain can only be achieved by having a real-time monitoring system. This system can help you to track the movement of goods throughout the supply chain. It can alert you to any delays or problems, thus providing the opportunity to take action before they become bigger issues. With this, you will have control and can improve the efficiency of your supply chain, reduce costs, and provide better customer service.

3. Use Data Analytics

Data is the new fuel without which organizations cannot realize their full potential. Therefore, data analytics can help you gain insights into your supply chain's operations. Use data to identify bottlenecks, optimize inventory levels, and improve order fulfillment times. With data analytics, you can make better decisions, improve your operations, and reduce costs.

4. Implement Lean Principles

Waste is the biggest setback that can pull you down. Therefore, you must eliminate waste and optimize processes. Doing this can reduce lead times, cut costs, and improve quality. This approach can help you to develop an efficient and effective supply chain.

5. Optimize Your Inventory

Inventory management is an important part of any supply chain. As such, you must have the right products in the right quantities at the right time. Take care not to have too much inventory because this can tie up capital and increase the risk of obsolescence. In addition, too little inventory leads to stockouts and lost sales risk. Therefore, optimizing your inventory can help you to balance these factors and improve the overall performance of your supply chain.

6. Consider Outsourcing

It is sometimes good to know that you cannot do everything alone. However, with outsourcing, you get the time to focus on your core competencies and reduce costs. By outsourcing non-core functions, like warehousing or transportation, you can free up resources to focus on what you do best. Outsourcing can improve efficiency and quality and reduces costs.

7. Embrace Technology

Technology can no longer be wished away by any business, more importantly, the one that deals with transporting products. Technology can help supply chain companies to automate processes, improve visibility, and reduce costs. RFID or barcodes, for example, can help you track inventory or optimize shipping routes. By embracing technology, you can improve your supply chain operations and gain a competitive advantage.

8. Build Strong Relationships with Customers

Customers, like the suppliers, are the backbone of any business. Therefore, you must strive to build a strong relationship with them, which is essential for any business. Understanding their needs and expectations allows you to tailor your supply chain operations to meet their requirements. Furthermore, you can improve customer satisfaction, repeat business, and referrals.

In conclusion, as you seek to improve your business and reach as many people as possible, the first step is to bolster the supply chain. Collaborate with your suppliers, use data analytics, and embrace technology as some of the first strategies. Furthermore, building strong relationships with customers can differentiate your business and create a competitive advantage.

In a world that is becoming too competitive for businesses regardless of their type, companies are constantly looking for ways to streamline their operations and gain a competitive edge. However, this cannot be achieved without enhancing supply chain operations. With real-time tracking enabled by advanced technologies, this entire sector has been revolutionized by providing valuable insights and enhancing overall efficiency. Let us explore how real-time tracking can benefit businesses in various aspects of their supply chain.

1. Improves Pricing and Sales Forecasting

Profits can only be realized through accurate pricing and sales forecasting. Therefore, real-time tracking allows companies to monitor the movement of goods from production to delivery. In analyzing this data, businesses can get insights into the time it takes for products to reach customers. Such information is important in pricing strategies and makes sales forecast more accurate based on real-time market demand.

2. Provides Insights into Demand

Modern-day customers are highly demanding. Therefore, any business needs to find ways of understanding their demands for successful supply chain management. Tracking customers in real-time gives businesses up-to-date information on customer preferences, buying patterns, and market trends. This valuable insight enables them to align their inventory levels and production schedules with customer demand, reducing stockouts and improving customer satisfaction.

3. Enhances Planning Capacity

Good planning keeps the supply chain ticking despite challenges. This is an area where real-time tracking proves important. It equips businesses with instant visibility into the movement of goods throughout the supply chain. Visibility allows proactive planning and decision-making, enabling businesses to adjust various aspects, such as production schedules, optimize routes, and allocate resources effectively. The data collected allows companies to respond quickly to unforeseen disruptions.  

4. Real-time Supply Chain Visibility

Real-time tracking technologies provide businesses with end-to-end visibility into their supply chain operations. From the moment a product leaves the factory to its final destination, organizations can track its location, condition, and estimated arrival time. This allows proactive management of shipments, reducing delays and improving customer satisfaction.

5. Leads to Better Inventory Planning and Development:

Inventory management is one of the main roles of the supply chain, which, if done well, contributes to its efficiency. With real-time tracking, businesses can monitor inventory levels in real time, enabling more accurate demand forecasting and optimized inventory planning. Further, better visibility into inventory eases the identification of slow-moving or excess stock. Implementing just-in-time inventory practices and improving overall inventory turnover rates can also be achieved. This reduces holding costs, minimizes stockouts, and improves cash flow.

6. Improves Order Management

Real-time tracking enables efficient management of orders throughout the supply chain. With this, companies can track the progress of orders, monitor fulfillment, and proactively address any issues or delays. Such visibility and control enhance order accuracy, reduce lead times, and improve customer satisfaction.

7. Monitors Vendor Performance

With real-time tracking, businesses can monitor vendor performance. They can also track the movement of goods from suppliers, which allows businesses to assess vendor reliability, on-time delivery performance, and product quality. Such data enables companies to identify and address any inefficiencies or bottlenecks in the supply chain, mostly caused by underperforming vendors. This leads to improved vendor selection and better overall supply chain performance.

8. Better Reporting Capacity

Real-time tracking gives businesses accurate and detailed data on various supply chain metrics. Companies can then analyze and leverage this data to generate comprehensive reports and insights. With such access to real-time reporting, companies can identify trends, measure key performance indicators (KPIs), and make data-driven decisions to improve operational efficiency, reduce costs, and enhance customer satisfaction.

Generally, real-time tracking improves immediate supply chain operations and leads to better long-term processes. Using real-time data and insights allows businesses to continuously optimize their supply chain strategies, identify areas for improvement, and drive ongoing efficiency gains.

Disruption in the shipping industry – marked by large transportation providers going through operational change, consolidation, and layoffs – will help small businesses cut costs and ensure service levels in 2023 and beyond. The question is how.

During the height of the COVID-19 pandemic while e-commerce surged, small businesses struggled to find capacity to ship their goods as logistics companies had all the power. Today however, there is more than enough capacity with transportation providers being overbuilt, and now finding themselves needing to “right size” their operations. As a result, they will try and sell the excess capacity, which will be a disruptor in the marketplace.

In an environment of reduced volumes, there’s an opportunity for small businesses to drive down their costs and ensure reliable delivery of their products by diversifying their carriers. But unlike larger shippers that have multiple carriers and can use whichever one is best depending on the location (and also get cost advantages), small businesses don’t have the volume required to diversify carriers. There are however different ways to tackle this issue.

Helping small businesses to diversify carriers

There are more than 33 million small businesses in the U.S. and the market has its own attributes. When it comes to shipping, small businesses typically require more affordability, reliability, and flexibility to meet customers’ rising expectations, especially in the e-commerce age. They also need a shipping partner they can trust and can help to insulate them during this time of disruption.

Over the past year and half, asset light carriers have emerged in the U.S. to level the playing field for small businesses. For example, Sendle taps into big business delivery networks and makes them available to everyone. Rather than putting more trucks on the road, Sendle makes use of wasted space in existing delivery trucks, maximizing the efficiency of all of those shipping routes. Sendle also helps to shield small businesses from the chaos in the market by handling the end-to-end journey of every parcel shipped.

New revenue stream for carriers

The upheaval in the shipping industry will not only help small businesses to save on costs, but also offer regional carriers an opportunity to partner with asset light carriers to provide a safe haven to small businesses. These partnerships can help regional carriers access a niche, untapped market and create a new revenue stream as small businesses continue to be a growth driver. Asset light carriers like Sendle that are focused on small businesses, can help shippers with customer acquisition, support, and billing, and they don’t have to deal directly with end customers.

The key to maximizing this growth opportunity for regional carriers is to choose an asset light carrier partner that understands the small business market and can bring in customers. Asset light carrier partners should understand the specific attributes of small businesses to efficiently match the right shipping provider to the right shipper. Effectively matching supply and demand creates efficiencies which benefit all parties. In addition, the innovative asset light carrier model of using trucks already on the road is an additional differentiator that will help attract small business customers as they increasingly move toward offering “green” products and want to use shipping services that support their brands.

While the shipping industry is seeing turbulence, the era of reduced volumes creates an environment where the small business market can more effectively compete against larger shippers. In turn, the support they require to make their success a reality, offers new revenue growth opportunities to those carriers using innovative solutions, and partnerships to shield small businesses from the disruption.

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Dennis Oates, Chief Logistics Officer, Sendle

Autonomous vehicles (AVs) are fast becoming famous, changing how businesses operate and revolutionizing the supply chain industry. With the evolution of technology, the implementation of AVs in supply chain management (SCM) will become more common. A report by Allied Market Research notes that the global autonomous vehicle market will reach $556 billion by 2026, with a CAGR of 39.47% from 2019 to 2026. As AVs become more prevalent, businesses must understand their impact on SCM in 2023 and beyond. Here are some impacts of AVs on supply chain management in 2023.

Improved Efficiency and Cost Savings

Efficiency has always been a leading challenge to many organizations, mainly concerning efficiency and cost savings. However, AVs are the solution to this problem as they will significantly improve efficiency and cost savings in SCM. Adopting autonomous vehicles and respective implementation will lead to fewer delays while improving fuel efficiency, known for high operational costs, and will further reduce labour costs. These vehicles can operate 24/7 without rest, leading to faster delivery times and increased productivity. They can optimize routes and reduce fuel consumption by avoiding traffic and selecting the most efficient routes. Furthermore, by reducing costs associated with labour, fuel, and maintenance, organizations can reinvest in other areas of their operations and increase the profitability of their businesses.

Redefined Supply Chain Network Design

The adoption and implementation of AVs will redefine supply chain networks’ design. These vehicles allow businesses to transport goods across long distances without worrying about human factors drivers face, such as fatigue or safety concerns. Consequently, businesses can expand their supply chain networks to include remote or previously inaccessible locations. Furthermore, with AVs, there will be smaller warehouse and distribution center footprints because businesses can use AVs to transport goods directly from manufacturing facilities to customers, reducing the need for storage and distribution centers.

Improved Safety and Risk Management

Autonomous vehicles can improve safety and risk management in Supply chains. With these vehicles, there is minimal risk of accidents, mostly caused by human error. They can also be equipped with advanced safety features, such as obstacle detection and automatic emergency braking and have the ability to collect and transmit data in real-time. This data can be used to identify and address potential safety concerns before they become significant issues or cause loss of life.

New Challenges and Considerations

Although AVs have various benefits in supply chain management, there are also new challenges and considerations that businesses must address. The leading challenge to AVs and the supply chain is cybersecurity. These vehicles rely on advanced technology and connectivity. Since anything connected to the internet is open to attacks, AVs are also vulnerable to cyber threats. Therefore, organizations must always ensure their AVs are secure and protected from cyber-attacks to prevent disruptions in their supply chain operations and data.

Specialized training and hiring people with the right skills is another critical step in operating and maintaining AVs. This means there is a need to invest in training and development programs to ensure that employees can operate and maintain AVs safely and effectively.

In a nutshell, the implementation of autonomous vehicles in the management of supply chains will bring significant benefits to businesses. Some benefits include enhanced efficiency, cost savings, and improved safety. Despite these benefits, businesses must be aware of the new challenges and considerations that come with the use of autonomous vehicles. With this knowledge and addressing these challenges, businesses can take full advantage of the benefits of AVs in SCM and remain competitive in the marketplace.

Supply chain is a complicated beast, and we can’t afford to skimp on the details (e.g. timeliness, quality, logistics, etc.) in our business operations. Despite the fact that the term is often used interchangeably with “dispatch”, it has a very different meaning and tends to be more about planning for delivery than about getting goods from one point to another on a defined schedule.

The supply chain works like this: each stage in the process of producing goods requires labor and materials which are sourced from different suppliers. In order to satisfy every customer requirement and get goods out of the warehouse to their destination on time, these suppliers must be able to deliver quickly.

This means that orders need to be prioritized by value and delivered according to the appropriate timeliness standards defined in each order (or contract). If you don’t prioritize your orders by urgency and deliver within a certain time frame, your customers will never get their goods delivered on time!

The importance of a defined schedule

The best prescription for delays is to create a schedule, one that is as defined as possible, so that one could predict the timing of shipments to a given destination and allocate resources accordingly.

For example, in the food industry, a single batch of shrimp might ship from China via two ports: one in Southeast Asia and one in India. The shipment might take five days to arrive at its destination in Singapore, and then another three days to arrive in India. In addition, a portion of the shipment might be held up at the port of origin until the receipt of cargo manifests and customs clearance procedures are completed. A further delay might occur when first-class or express services must be booked, which there isn’t enough capacity at the port to handle or pay for. Delays can also occur by design because demand varies from week-to-week or month-to-month; you know that your customer will need more product than usual during peak demand periods, but you don’t know what those peak periods will be.

However, if you have a fixed schedule — say that your next order of widgets will ship on December 1st — then it’s much easier to allocate resources correctly and predict when reasonable quantities might be available for delivery by December 31st.

Types of disruptions that can occur

The logistics industry has been plagued by complexity and regulations for a long time. When it comes to supply chain disruption, there are three main types: A) Risks in the supply chain that do not impact the business; B) Risks in the supply chain that impact the business; C) Complexity within the supply chain that impacts both.

Mitigating disruptions

The supply chain, from raw materials to products to end customers, is the backbone of any successful business. It’s a finite and complex system that is difficult to predict and manage. Predictability has, in fact, been a very important driver of success in the industry since time immemorial. This is because supply chain isn’t just about moving goods from one place to another on a defined timetable; it’s also about moving goods on an unpredictable timetable.

So here are several ways that the supply chain can fall prey to disruptions:

1) Shipment errors – shipments can be lost or diverted by unexpected weather or shipping delays. In this case, timing matters more than anything else. So what happens when there is a sudden increase in demand (e.g., for a new product)? There is little time for the risk managers or risk assessors at fulfillment centers to react and respond to such an unforeseen spike in demand before an urgent shipment runs out of stock that could lead to massive price increases for customers and higher input costs for suppliers – both of which could have disastrous consequences for the company’s bottom line.

2) Warehousing disruptions – As production moves from one warehouse or facility to another within the same region, warehouses become increasingly complex as physical space becomes increasingly constrained. For example, inventories can be moved by truck across different regions, elevators can be used instead of workers walking up and down stairs as they move materials around warehouses and back into inventory bins, offices may also find themselves being relocated between different facilities within their region with no real coordination among regional partners operating in proximity with one another when doing so. Defects then become more likely as parts get moved between warehouses over time as they are frequently reused due to modularity improvements made by manufacturers over time as well as reusing existing parts when possible (e.g., new tires).

3) Logistics disruptions – Distribution hubs become physically congested due to rising supply chains (elevators may not work with trucks carrying products!). In this case too timing matters more than anything else: Ideally all suppliers would have access to the same low-cost transportation network so they could move their raw materials around efficiently without having them stop suddenly every few miles; meanwhile transportation costs are often fixed per shipment so there isn’t much room for error if your supplier unexpectedly decides not take part in your

The future of the supply chain

The supply chain is the backbone of business. Without it, business would grind to a halt. In fact, if your company depends on the entry of raw materials into your store or warehouse in a timely manner, you’re an easy target for hackers.

The forces that lead to supply chain success are not always straightforward. The main driver is speed of delivery (which can be measured in minutes). But it also has to do with the timeliness of suppliers: if they deliver late, you lose out on a good deal; if they deliver early, you lose out on making money at all.

To truly define your company’s supply chain strategy and implement it into practice, one needs to hold a thorough analysis of their current relationship with suppliers. In some companies, this may take months or years; in others, even decades — no matter how long it takes. One thing that is certain though: this analysis should be done far earlier than when the relationship between supplier and customer first begins. It should happen before any new products are introduced or orders are placed (early enough so that both sides have time to adjust). Otherwise, there is a risk that a supplier will simply walk away from any deal as soon as their vendor account balance grows too large…

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.