According to Supply and Demand Executive, the supply chain is an important component of achieving net zero targets.

2050, 2060 and 2070. Three sacrosanct years worldwide governments have unleashed with meeting ambitious net zero targets.

Read the article Supply and Demand Executive

The supply chain is the weakest security link, reports Next Gov.

The recent cyberattacks against SolarWinds and other widely used technology providers demonstrates the lengths to which foreign nation-states and other hackers are willing to go to achieve malicious objectives

Read the article Next Gov

Modern supply chains are not only about moving items, but also about technology, people and security, reports Washington Technology.

At one time, talking about the supply chain focused on stuff -- moving it from the plant to the warehouse to the distributor to the seller and then delivering it the user. That’s still a relevant model but today's supply chain is also about software, security, compliance, partners, and people.

Read the article Washington Technology

According to Forbes, there are several supply chain technology trends set to experience growth in 2022.

This was the year that the words “global supply chain” made their way into everyday conversation. In March 2021, the giant container ship Ever Given blocked the Suez Canal and captured the public’s attention for a full week.

Read the article Forbes

The supply chain is an important part of any business and the overall organizational strategy. It helps you save money and improve customer satisfaction by reducing waiting times for the in-demand products. Therefore, an efficient supply chain gives you a real competitive edge against other companies in your industry. On the flip side, an ineffective supply chain can consume many resources in your organization. Therefore, it is important to strategically plan to make your supply chain cost-effective, lean, and efficient. Update your supply chain initiatives with these five ideas to serve your business right. 

1. On-demand warehousing

If you need storage but do not want to invest in managing a warehouse, mostly in cases where you have a huge demand for certain products, on-demand warehousing might be the right strategy for you. It connects online brands that need to temporarily store items and fulfill orders through warehouses with excess space. This is a cost-effective and flexible fulfillment solution you can adopt for your business. The challenge is that it does not provide operational visibility compared to tech-enabled third-party logistics (3PL) providers. 

2. Last-mile delivery

Last-mile delivery entails a carrier picking up orders from a distribution hub or warehouse and delivering them to the final destination. The primary goal of this type of delivery is to deliver orders to the customer fast and effectively. With the growing customer demands and competition, fast delivery has become a critical aspect for businesses. Customers expect nothing short of quality service and timely delivery of their products. Therefore, to ensure customer satisfaction, it is important to make sure that you handle the delivery process exceptionally well. The sooner the customer receives their products, the happier they get. 

3. Use drones

Drones have become a fast method for delivering items around the world. The good thing about this is that drones can reach the location regardless of how remote the location might be. This delivery method is highly efficient for certain types of items and can replace traditional methods in some instances. They can reach some remote areas and are faster compared to the traditional delivery methods. They reduce delivery time and cost, which is a promising benefit to logistics. 

4. Big data analytics

Data has become a lifeline for many organizations who wish to understand their past and improve performance. In the supply chain, you can use inventory and fulfillment data to manage SKUs better, replenish inventory at the right time, forecast demand and make the right decisions regarding operational optimization. Data provides insights and visibility into the operations that allow you to address the company's needs. Data allows you to understand how quickly certain items are selling, who your customers are, how much they are spending, and where they ship from. This is critical information that can help you make the right investment choices. 

5. Automation

Automation of in-house processes is something you might want to try if you want to save on some costs. Automation can save time for your logistics team so that they can focus on how to improve workflows. Furthermore, automation can streamline your order fulfillment processes and speed up work while reducing human error. For inventory management, automation allows organizations to process time-consuming tasks while working on other tasks. 

If you are currently worried about the performance of your supply chain, there is hope. Try finding the best option to enhance your supply chain initiative. Begin by finding reliable suppliers and logistics providers, then follow with building a sustainable supply chain and facilitating the flow of information across your business 

In 2022, we find ourselves heading in to the third year of a global health crisis with unparalleled supply chain impact. Repercussions from severe supply and demand imbalances are being felt worldwide. The availability and increasing cost of labor, freight capacity, semiconductors, empty chassis and warehouse storage space will continue to be areas of uncertainty and concern in the coming new year.

With new waves of coronavirus infection appearing globally just in time for the holiday season, our social and economic futures can appear murkier than ever. Still, I believe we can see new supply chain patterns emerging from today’s global trade and shipping chaos. Here are three of those patterns that we will be contending with in the new year:

1) Container ship issues at major North American and Northern European ports will continue well in to 2023, because the current congestion and delays are not merely an ‘ocean’ shipping problem, but a global supply chain network problem. Issues with port labor, truck driver labor, warehouse unloading labor and both empty container and container chassis availability are all conspiring with increased inbound shipping volumes out of Asia (sparked by historically high consumer demand) to slow down the loading and unloading of ocean vessels and subsequent movement of goods out of ports to inland warehouse or deconsolidation locations. 

2) To increase supply chain resilience as disruptions will continue to increase their pace and their impact scope, companies must prioritize first mile technology investments and collaborative logistics service provider relationships.  Single-minded pursuit of lower costs will have to be replaced with new goals for holistic and multi-dimensional forms of visibility to things like freight capacity, supplier work-in-progress and financial health, modal hand-off points and shipment chain-of-custody progress, in addition to real-time visibility to inventory in transit. Resilience demands improved exception monitoring to support faster reaction times when issues arise within supplier networks or global shipping lanes. Success in delivering products the final mile to end customers is now clearly dependent on getting more control and increased flexibility in managing the first mile.      

3) The following global supply chain trends we see today are likely to be longer-term: 

• Higher ocean and air freight shipping costs will remain, even when current congestion and capacity constraints have settled into a new global equilibrium 
• Traditional ‘peak season’ shipping markets will start earlier and run longer 
• Freight contracts will increasingly run for shorter terms 
• Shippers will continue expanded use of Non-Vessel-Operating Common Carriers (NVOCCs) and third-party logistics providers (3PLs) to secure more reliable freight capacity 
• More shippers will share dynamic freight capacity forecast needs with their key carriers to improve overall freight network planning 
• More shippers and consignees will be under pressure to improve their loading and unloading efficiency for trailers and containers in order to free up network freight capacity   
• More C-level executives will be looking closely at global logistics and supply chain strategies, emphasizing reduced supply uncertainty in tandem with cost management to protect their production lines, the end customer experience and total business profitability.

Because uncertainty around pandemic-influenced supply and demand challenges has become “the new normal” for supply chain professionals, it is imperative to improve the technologies and supply chain management tools they work with daily. Broader and more flexible partner connectivity, the addition of more external data sources, and supply network intelligence that finally connects demand signals and stakeholders downstream with procurement and shipment planning activity upstream will help ensure businesses can move quickly, pivot nimbly, and are set up for future success.

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Monica Truelsch, Senior Director, Supply Chain Management Strategy at Infor

Radio frequency identification (RFID) has emerged as one of the leading technologies revolutionizing supply chains and logistics. It is capable of helping enterprises reduce their expenses and become competitive in the market. With the increased competition and pressure from the consumers, retailers must now develop better ways to streamline their operations and optimize their inventories. This cannot be achieved by relying on traditional methods. RFID uses radio frequency electromagnetic fields to transfer data. This technology can be deployed to monitor company activities in real-time.

 

RFID technology is highly valued due to its quality and ability to adapt to supply chain management (SCM). It can rack assets like boxes, items, and other bigger units of measure within the supply chain operation. Due to these advantages, major retailers are now rethinking this technology, with the majority of them now looking for RFID to improve the visibility of their supply chains from the point of manufacture, transport, and in-store and to the exit door.

The attachment of an RFID tag that conforms to the GS1’s EPIC global standards allows each retailer to identify their supply chain and store uniquely by their attributes like their size, style, or color. This identification allows retailers to have control and visibility over their inventory. This enables them to reduce the out-of-stock products, increase the availability of products and services, and drive sales in-store and online. With the right RFID tag, retailers can manage inventory better by identifying missing items or tracking those that have been stolen. This ease of management can improve the accuracy of the inventory and shelf availability.

As supply chain challenges and customer demands continue rising, companies in this sector have realized that RFID can enhance the running of their internal operations and improve their businesses. Therefore, some players in this space are trying to harness the strengths of this technology to improve customer satisfaction. According to past studies, the RFID market was expected to grow by over $8.25 billion by the end of 2014. This is nearly 14% CAGR. Today, many companies rely on this technology in running their supply chain and logistics operations. The intense competition from big retail firms like Amazon has made it essential for organizations to offer a unique customer experience by taking advantage of new technologies. Here, RFID is playing a critical role in retailers finding better ways of transforming the customer experience. For example, in apparel retailing, the uptake of RFID technology among some biggest players in this segment has increased over the recent years. These retailers see a reduction in out-of-stocks while improving the on-shelf availability of apparel. This enhances the customer experience.

This technology makes the items traceable and keeps the errors to a minimum. It also increases stock control accuracy up to 95 percent and enhances efficiency to over 99 percent. Additionally, RFID-based inventory audits can also help identify items out of season and need to be removed from shelves. In apparel retail, for example, this technology helps identify the holiday fashion, which is then removed for shelves to give space for other fashion for different occasions. For pharmaceutical firms, the technology helps identify consumer products that have expiration dates. They also offer the possibility of personalized, interactive marketing messages, which makes it easy for customers to view products as they tour the store.

For retailers that have invested in RFID technologies, they are reaping big on the benefits of the in-stock control, profit margins, and enhanced customer experience. Those who have not invested in it have seen the importance of this technology when it comes to performance.

The disruption that COVID-19 has caused on the supply chain continues to affect the delivery of products. We have seen an increased shortage of items, with some taking too long to arrive. However, we hope that the ramped-up vaccinations will improve this, leading to the reopening of sectors like the supply chain that are crucial for us. However, with the Delta Variant of COVID-19, we might still have some time to wait before things return to normal. This means that your supply chain may still cause issues as we approach the holiday season.

With the coronavirus now surging in countries at the heart of the supply chain such as Vietnam and Singapore, we should expect the problems we saw in the past year during the holidays. The Delta variant of the COVID-19 spreading worldwide might delay the reopening of popular clothing and apparel factories. At the same time, other industries that are critical for merry-makers might also continue being disrupted. Combined with the existing problems caused by the previous variants, shoppers and retailers are likely to encounter more challenges as the pandemic continues to hit the supply chains hard. Here is what you need to know going forward and why you need to start your holiday shopping earlier.

Reason for disruption of retail manufacturing

The initial defenses against the virus in East Asia, where many products originate from, was a source of hope for many countries across the globe. However, the surge in infections lately is demoralizing. Factories are shutting down or reducing the number of workers on-site to minimize the possibility of increased infections. This means that the retail supply chain is likely to experience some delays. This rise in the number of positive cases has damaged the movement of goods and increased costs. It adds the number of troubles that the supply chains have been experiencing in the past few years, with the rising tensions between China and the US and the subsequent manufacturing movement away from China. With Vietnam being the second-largest shoe manufacturing nation to the United States behind China, the rising rates of infection is a problem that may delay the fulfillment of customer orders. The solution to this problem is for the retailers to order products early enough. The reliance on these countries will affect the holiday as industries get choked as most retailers will hurt the customer. As we enter the holiday season, pressure will increase for customers and retailers.

Vaccine inequality is still a significant source of concern

Vaccine inequality, which is the unequal distribution of vaccines worldwide, is becoming a key challenge to the world. It is threatening the global economy. This is also affecting supply chains and the movement of goods from the manufacturer to the consumer. As vaccinations continue delaying, the problem will persist. As the rich nations, mainly the western ones, continue their vaccination campaigns, the poor ones continue suffering from the delays occasioned by the virus. Sadly, countries such as Vietnam that are key manufacturers of some of the products in high demand during the pandemic are struggling to vaccinate their citizens.  

The slow vaccination in these East and South Asian nations that are key manufacturers means that it will take more time for the virus to subside, and the Delta variant may make things worse. In Vietnam, for example, only 1.9% of the total population has received a full dose of the vaccine, while less than 15% has received at least one dose, according to the data by Our World Data. 

Although the pandemic is currently being addressed up to some point, the current efforts are not enough to help address the problems that might occur during the holiday.

The logistics industry continues to flourish, and the demand for faster and effective services has made the last-mile delivery one of the most crucial supply chain components. The last-mile delivery is the process where items from the warehouse are transported to the customer’s address. The US Department of Commerce reports that consumers spent $601.75 billion online shopping with the US-based merchants in 2019 alone, an increase of 14.9% from the previous year. This increase has been consistent for years, and e-commerce is set to overtake physical retail. This is understandable because there has been an increase in the number of people accessing the internet and the surge in the convenience of e-commerce platforms which makes shopping a matter of clicking a few buttons to order an item. However, there are still some challenges that affect the process of last-mile delivery, as shown below.

1. Lack of visibility

Visibility in the delivery process is the most critical prerequisite for establishing the loyalty of the customer. Buyers are interested in knowing the location of their product or package and when the product will reach them. This is the reason for the tracking codes offered by some retailers to allow customers to gain visibility. However, despite these codes, this is not enough. Customers demand real-time visibility and information about their packages. This is a challenge because it means retailers must provide information in real-time.

2. High delivery costs

The last-mile delivery tends to be expensive for customers and retailers. For retailers, setting up an infrastructure that supports the timely delivery of items can be expensive. Furthermore, shipping and logistics companies must set aside money for complex shipping routes, compensate for failed deliveries, pay drivers and cater for extra stops along the delivery routes. For the customers, it is a different thing altogether—high costs of delivery result in the rise in abandonment rates in carts. According to research, 55% of customers abandon their shopping carts due to high shipping costs. This is another challenge that must be addressed in retail.

3. Unpredictability

One of the key challenges in modern supply chains is unpredictability. When a retailer packages goods and dispatches them for delivery, many things can occur on the way that can disrupt the last mile. Some of the key challenges to the last mile delivery are traffic, bad weather or mechanical problems with the vehicle. Therefore, retail firms are forced to develop contingency plans and ensure seamless communication between teams and customers. Retailers need to have a plan of action at hand so that when there is a problem, you can dispatch the needed solution faster and in time.

4. Inadequate route planning

Route planning can be as challenging as much as it can confuse. It consists of various variables that must be taken into account. Inadequacy in route planning causes delays in deliveries and increases the frustration of customers and high costs. This problem can be solved by proper route optimization. This reduces costs incurred due to late deliveries and positively impacts the arrival time.

Implementing the right last-mile delivery processes is invaluable and presents an excellent opportunity to adapt to the changing demands made by the customer. It also differentiates the services provided by a retailer from those of the competitors. The retailers that want to succeed with online stores must confront the last-mile delivery challenges accordingly. This means adopting modern methods, technologies, policies, transparency, and communications, which should be seamless between the company and the customers. This is not always an easy task because it can be expensive, time-consuming and challenging in general.

Labor shortage, transportation and commodities remain the biggest challenges for supply chains. In response to these challenges, suppliers and retailers are adopting new methods to move goods in different ways, such as cargo liners, trains, and trucks provided by the competitors. Although these are just a few ways you can solve the problems in supply chains, there are other options that you may need to enforce complex solutions for the existing challenges. Lack of a concrete strategy to avail the products in the market at the right time will cause problems.

 

Adapting to the changing conditions

The past two years have shown how vulnerable the supply chain is. It has emerged that conditions such as pandemics and disasters can reset everything. This shows the importance of flexibility and the ability to adapt to changing conditions. To enhance adaptability, suppliers are shifting their limited production capacity to items that sell faster, cancelling promotions for some products and imposing allocations. With the challenges in the supply chain, the biggest retailers, including those that retail holiday decorations, furniture, toys and appliances, are encountering problems transporting items across the seas, which takes about 80 days.

Avoid confusion

Serious, big-name retailers are trying their best to avoid last-mile confusion caused by massive orders that affect delivery. Retailers such as Amazon and Walmart provide logistics capabilities to competitors through multi-channel fulfillment, providing packing and delivery services to eCommerce sellers and other approaches. For the apparel industry, the retailers are trying to navigate an increasing number of factory shutdowns, transit times and rising costs, which are some of the biggest challenges currently.

Solve cyber attacks

Cyber attacks are becoming a menace to many industries and organizations. They can happen to anyone at any time and anywhere if the systems are not protected adequately. Supply chains can also open you up for dangerous attacks on you and others. If there is any lax, hackers may capitalize on it to access the systems and steal valuable data or assets. The chance of your supply chain being disrupted by cyberattacks or opening you up for attacks make it necessary for you to secure it. Avoid this problem by having solid communication and relationships with all the links in the chain of supply and knowing where vulnerabilities might come from.

Price fluctuations

Changes in product prices are a norm in the supply chain industry. However, such occurrences create disruptions because you must decide whether to switch suppliers, increase prices, or accept reduced profits yourself. These fluctuations can be caused by factors like an increase in oil prices, which is known for its volatility and causes financial overheads in manufacturing and transportation.

Product issues

Quality management is connected with supply chain management. Therefore, issues with products can have a significant problem in the supply chain. It can lead to problems such as delays in delivering a final product or issues with the customer. No business wants to deliver low-quality merchandise to the customer or have customer products delayed because of faults. Therefore, a proper quality management system with customer expectations in mind and proper communication with suppliers is key to solving these problems.

Although delays can happen in some instances, supply chain disruptions can make things worse. Natural disasters have proven to be a challenge. For example, in case of a natural disaster, transportation and trade routes can be affected, leading to delays in product delivery. In case of a pandemic, a problem might arise from measures such as lockdowns and social distancing meant to minimize spread. All these make it hard for freight carriers to deliver goods through any means.

Taxi cabs are seeing an influx of business due to rising costs of ride sharing apps such as Uber and Lyft. Cities like San Francisco, Chicago, and New York has seen an increase in demand for taxis and a decline in Uber and Lyft rides.

According to the Taxi and Limousine Commission (TLC) – demand for yellow cabs have increased 116% in New York from January 2021 to September 2021. During this time ridesharing apps declined from 15 million in July to 12.7 million at the end of September. Chicago and San Francisco see similar trends. “Customers come to us after they open up the Uber and Lyft app, [and] say they feel prices are very high.” Chris Sweis, chief executive of Yellow Cab of San Francisco explained to Market Watch.

Ten years ago when ridesharing apps came on the scene they practically all but dismantled the cab industry – offering customers lower prices, visibility into when their drivers would arrive and a convenient app that allowed for ride requests and easy payment. As someone who previously relied on taxi drivers – ridesharing apps allowed me to request rides while still at work or at home; the safety knowing who my driver was, and the convenance to stay inside until my driver arrived as opposed to waiting outside hoping that a taxi would come along.

Since then, the taxi industry learned valuable lessons from Uber and Lyft and now ten years later they are back and better than ever – hoping to capitalize on the driver shortage. “I’m hoping we can convert people permanently, or have them at least consider taxicabs as a transportation alternative,” said Barry Taranto, a driver for National Cab in San Francisco.

One of the ways that the taxi industry has transformed is by offering apps of their own that customers can take advantage of to request rides. One of those apps is Curb Mobility which claims to be “the #1 taxi app in the US". According o their website they have over 100,000 drivers across the cities like New York, Boston, and Las Vegas.

Another benefit of hailing a taxi versus calling an Uber is that taxis aren’t allowed to participate in surge pricing. ““Our meter rates are set by the city, and that does act as a maximum,” Seis explains. You may have trouble finding a taxi on a Saturday night, but you won’t be paying surge pricing like you would be Uber or Lyft.

Part of the reason that consumers are experiencing surge prices with Uber and Lyft is that there just aren’t enough drivers. In fact, Uber is exploring ways to dispatch cabs in New York City through the Taxi and Limousine Commission’s “E-Hail” program. No decision has been made at the moment but New York Taxi Workers Alliance leader Bhairavi Desai told The New York Post the union, which includes Uber and Lyft drivers, would “remain open-minded” to the idea of Uber-mediated hack hails.

Surge pricing and limited drivers are affecting Uber and Lyft’s bottom line. Employing more taxis could not only drive the price down of the rideshare giants but get more drivers on the road curbing wait times for riders. 

With the many responsibilities that vary from one company to another, we all agree that managing logistics is not easy. As a logistics manager, you have a crucial role in ensuring things run smoothly regardless of the possible challenges along the way. According to Capgemini, cutting transport costs tops the list of the things that most logistics managers would want to achieve. This is an obvious goal considering the importance of minimal operational costs to all companies. However, this is often easier said than done. It requires investment in things such as technology and innovation to achieve. One must also remain budget-conscious. Generally, logistic managers have a lot on their hands, and innovation alone might not solve all the problems and make you a superhero manager overnight. As a logistics manager who intends to be on top of the game, here are some secret success tips that will make you an office hero.

1. Get the correct transportation management technology

If you want to make your logistics better, find a transport management system (TMS) that meets your needs, ensures visibility- and savings. TMS can help you monitor your shipments, the performance of the carrier, and optimize routing. The most important thing about TMS is that it provides end-to-end visibility. TMS minimizes the overall transportation cost by over 30%.  While this can be the case, it must meet specific needs. For instance, it must address issues in areas such as contracts, visibility, shipping trends, accounting tasks, and customer notification. With such a technology, your supply chain will become more fluid.

2. Have a contingency plan

Regardless of how you think your supply chain is foolproof, you must always prepare for a possible eventuality. A good logistics manager who knows their job must prepare for disasters and accidents from fires, floods, pandemics to political problems that can affect the movement of goods. It would be best if you had contingencies for each element of your logistics plan. Know when to change your plan and when to stick to it.

3. Automate

The secret to efficiency and reduction of operational costs is automation. In addition to helping manage transportation, automation can help you manage workflow and things such as incoming goods, repackaging, customer care, and dispatch processing. In addition to reducing workforce costs, automation can also improve inventory and order accuracy.

4. Develop a vendor compliance program

Efficiency in managing your vendors can make a significant difference. A vendor compliance program will make your supply chain fluid and allow you to set expectations for your vendors. Additionally, you can track their performance and ensure they meet the goals you have set. Generally, a vendor compliance program has other advantages, such as improving vendor performance, reducing costs, and improving customer service.

5. Build alliances with key suppliers

Once you have established a vendor compliance program, you can use it as a launchpad to improve relationships with key suppliers. Building strong alliances with the key vendors will make them loyal to your company, allow you to bring problems to the forefront for a collective solution, find opportunities for mutual growth, and find pain points that you can improve together. The right relationships with suppliers can lead to loyalty, retention, and effective service delivery.

6. Keep up on industry trends

The logistics industry keeps changing, and so should your processes. Therefore, look at your internal processes and find opportunities for improvement. You can only know where you need to do better by looking at what others are doing. Looking beyond your company provides you with the inspiration you need to make a positive change. Identify the trends that are helpful by benchmarking, following industry trends, and networking.

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.