According to Yahoo Finance, logistics experts explain that there is a “perfect storm” of supply chain issues that are impacting all over the globe. 

Supply chain bottlenecks are squeezing businesses big and small. One expert explains why it's so hard to iron out the major kinks affecting global trade.

Read the article on Yahoo Finance

Artificial intelligence can play a role in supply chain management, it is necessary for businesses to understand exactly how AI can be helpful in the supply chain, reports Supply & Demand Executive. 

More and more supply chain leaders are considering incorporating artificial intelligence (AI) into their business, but are still skeptic. That’s because they’ve been on the receiving end of too many sales calls where companies say AI can change the world and magically do all sorts of things.

Read the article on Supply and Demand Executive

The existing supply chain isn’t robust enough to support cannabis, reports Forbes. 

Since 2010, when I first started doing legalization work in Colorado, few big technology companies have been willing to openly step up to the plate and service licensed cannabis businesses. 

Read the article on Forbes

Problems will persist in the semiconductor supply chain until at least 2022, reports CNBC. 

The semiconductor chip shortage that is hamstringing the production of products ranging from cars and computers to appliances and toothbrushes will extend into 2022 and potentially beyond that, the CEO of semiconductor company Marvell Technology said.

 

Read the article on CNBC

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.

Excellence in supply chain management may translate to business success. If you are good in this area, you will likely impress your customers in delivering the right products, in the correct quantity, at the right place, at the lowest possible cost and the right time, and to the correct people.  However, getting it right in the supply chain is easier said than done. Unlike the thinking that excellence in managing the supply chain can be achieved through few steps, the truth is that it goes much deeper and entails many other defining actions and strategies. For supply chain professionals, it means that they must have extra attributes that enable them to stand out. Here are some of the winning traits that should define your supply chain.

 

1. Embrace innovation

Like any other industry, innovation in the supply chain is everything. Leaders ought to always look for innovative methods to improve operations and enhance customer experience. Some ways of ensuring you stay ahead are adopting new technologies before anyone else and experimenting with new techniques and processes. According to Deloitte, more than 96% of supply chain leaders recognize innovation as an essential factor for growth. Over 75% use mobile technologies, while 65% use RFID tagging, among other approaches. In short, the adoption of technology is the leading way of ensuring you stay ahead of the game.

2. They are data-driven

We are living in a highly data-driven world. Therefore, you must always gather data on your supply chain and create actionable information to drive growth. A report by Deloitte shows that 75% of supply chain leaders use data optimization software to gather actionable information. With the proper tracking of the supply chain and recording of data, you will increase efficiencies in operations. You will efficiently handle critical aspects like materials and optimize floor space while also forecasting the future. With the right data in your possession, you are assured of making the correct decisions at all times while minimizing costs and improving productivity.

3. Successful supply chains empower employees

Employees are crucial for any successful supply chain operations. Any organization that intends to succeed must always empower its workers and invest in their wellbeing and knowledge. Investing in the right way gives employees a sense of belonging and fosters success for the company. Through incentives on performance and careful tracking to identify and determine bottlenecks, you can control costs in your supply chain. Successful supply chains put their employees in places where they are needed and give them the right tools to get the job done. As a supply chain company, give your employees the technology to ensure their work is easy and successful.

4. Successful supply chains are transparent

Transparency in the supply chain builds trust among the stakeholders. This usually comes with sharing information and data freely throughout supply chain firms. Therefore, companies in this sector should ensure that their supply chains are not siloed. With connectedness, efficiency is increased, and profitability can be achieved as well. Furthermore, tracking needs to be enabled to enhance accountability and compliance. Transparency gives supply chain firms the ability to know the expiration dates of products, inventory levels, and potential losses.

5. They are prepared for the unexpected

Supply chains keep changing, and companies must always stay on top of issues to remain relevant. The most successful supply chain companies can apply values and vision to the solutions required and overcome unexpected challenges. Supply chains must always take advantage of new opportunities and make the best decisions considering potential risks. With the right plans in place, you will get your business decisions right, and efficiency will be improved significantly within your organization.

Leaders in the logistics sector cite the ever-increasing complexity of the supply chain as the main challenge they encounter. This is true considering the changes that we often see in this sector. For instance, there was a time when distribution was local from local producers or the delivery was done by rail or interstate highway. However, the requirements that logistics operations and operators face today are much more complex than ever. Furthermore, the expectations from the customers have evolved significantly. In a more globalized supply chain that we have today and trade routes keep advancing, the logistics and supply chain companies have no option but to change their tactics. Here is what modern supply chain companies, managers, and logistics firms need to do to cope with the ever-increasing complexity in their respective industries. 

• Improve your logistics and supply chain forecasts

With the disruptive nature of the modern supply chains, the outcome of specific decisions can be disastrous. The unexpected events are likely to come up, and this may derail your plans. As a way of coping with this, it is ideal to predict or forecast what lies ahead with predictive analytics. By leveraging the existing operational data into the analytics, you can easily understand the potential future trends and respond to them accordingly. Make use of big data analytics to understand the market and identify the expectations using data-driven models. 

• Use real-time data

Things tend to move with so much speed in the supply chain. This means that you have to move with the same or even more speed since situations can change within a short time. As you plan to deliver items with unmatched efficiency, you need to cope with the speed by taking advantage of real-time data. With real-time insights, you can make adjustments faster and preserve maximum value in the face of uncertainty. While doing this, be proactive, reactive, and be in a position to identify possible challenges and risks. This way, you significantly reduce complexity and risks. This results in more deliveries and fewer issues with the customers. 

• Use “what if” scenarios

The “what if” scenarios enable you to understand the potential events and try to hypothesize what could happen if you do something. This is a good thing for planners who could respond to events even before they occur. For example, what if you are removed from a particular hub or cross-dock? What if you could add another warehouse? The what-if scenarios allow brainstorming of certain events and determining with certainty how you can respond to the effects or unexpected disruptions. 

• Find good partners

Having the right people and surrounding yourself with the right partners can take you far. Although you can do many things alone, you need to consider the right people as partners. They will help you limit the complexities in the supply chain by enhancing delivery speed and innovation. 

• Control your capacity management

As the number of trade routes and the number of shipping routes increases, it is crucial to note that transport planning begins with you. Therefore, you must begin by understanding the global marketplace and demands. Begin by determining your capacity against the demand levels. Also, understand the bottlenecks within your transport and production lines and find ways of managing them accordingly. Examine the requirements of the customer based on their location and other requirements. By acquiring insight into your specific area of control, you will be in a better position to manage and ensure that you are in a position to fulfill the needs of the client regardless of their location.

Major food delivery services like UberEats, DoorDash and GrubHub are suing New York City after the city voted to cap delivery fees in August. The companies are suing for monetary damages, a jury trial, and are seeking an injunction which would prohibit the state from capping fees.

Temporary legislation was put into effect by the city council last year barring food delivery services in the city from charging more than 15% per delivery order and 5% for other services including marketing. This legislation came at a time when restaurants were struggling due to the pandemic.

“The ordinance is unconstitutional because, among other things, it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates," the lawsuit specified. The lawsuit declared that the new legislation had cost the food delivery industries “hundreds of millions of dollars.”

The lawsuit filed last Thursday September 9^th was similar to the lawsuit that food delivery companies filed with the city of San Francisco after they too voted to permanently cap delivery fees last year. Like New York City, delivery services could not charge a restaurant more than 15% per order as well as 5% for other services rendered.

At the time, GrubHub expressed frustration with the city of San Francisco stating the bill brought more harm to independent businesses. They argued price controls, “…hurt independent restaurants by limiting their access to critical tools that help them find new diners and generate more orders.”

But some independent restaurants didn’t see it like that.  “Restaurants are not out of the woods yet, we are dealing with higher costs in product, labor, and major obstacles we as an industry have never seen before,” Kim Alter, chef-owner of the Nightbird told Yahoo Finance in an interview earlier this year.

While restaurants in the city backed the legislation San Francisco Mayor London Breed ultimately decided against signing the bill into legislation citing the ordinance to be “unnecessarily prescriptive in limiting the business models of the third-party organizations, and oversteps what is necessary for the public good.”

The pandemic brought a boom to food delivery services during the pandemic. According to Euromonitor, a market research firm, the US food delivery market has grown from $36 million in 2019 to $76 million last year. Despite the increase in revenue the food industry is not without controversies.  Take for instance this headline by the Chicago Eater - Chicago Sues Grubhub and DoorDash for Allegedly Scamming Basically Everyone: Restaurants, Drivers, and Customers or how it came out in 2019 that GrubHub was creating fake websites resembling the landing pages for restaurants that were not associated with the company.

It is unclear whether or not the lawsuit will progress through the legal system, but some food delivery companies are not waiting to find out. Recently DoorDash rolled out a 3-tiered commission plan priced at 15%, 25%, and 30%. The more commission a restaurant pays – the more benefits it receives – like marketing or a larger delivery area. According to DoorDash it gives restaurants "the flexibility to scale up or down depending on their current needs." 

If material shortages, natural disasters and lack of skilled workers weren’t bad enough – the food industry have to factor in cybersecurity threats to ongoing supply chain delays and shortages. 

Ransomware and phishing attacks are no longer limited to cybersecurity companies.  Back in May, a sophisticated ransomware attack managed to bring down JBS – the world’s largest meat supplier by sales temporarily shutting down plants that processed one-fifth of the United States’ meat supply. Unable to resolve the problem, JBS eventually paid $11 million in Bitcoin as to not cause further disruptions to the restaurants, farmers and grocery stores that they serve.

In an interview with the Wall Street Journal, Andre Nogueira, chief executive of Brazilian meat company JBS SA’s U.S. division explained, “It was very painful to pay the criminals, but we did the right thing for our customers.”

JBS may be the latest ransomware attack in the food industry – but experts do not think it will be the last. Meat processing plants may be the ideal targets for hackers as they often have outdated software and laxed cybersecurity.

According to John Hoffman, a senior research fellow at the Food Protection and Defense Institute at the University of Minnesota – executives in the food industry have begun to take notice. In an interview with NPR, Hoffman explains - "People just didn't accept that it was that big of a risk," he says. "I think that's changed today. I've already heard from folks in government [that] it's changed. People are looking at this and saying, 'OK, we've got to do something.' "

It doesn’t help that there are only four major players in the meat production industry including JBS. The New York Times wrote an article entitled, The Food Chain’s Weakest Link: Slaughterhouses in which they sited that just 50 processing factories account for 98% of the beef industry in the United States, according to a beef analyst, Cassandra Fish. The article written by Michael Corkery and David Yaffe-Bellany explain that even if just one meat processing plant is closed temporarily due to the coronavirus – the country could face months of shortages.

Even though Covid-19 transmissions are at an all time low due to widespread vaccinations – it doesn’t mean that meat industry’s supply chain is in the clear. Should another ransomware attack hit a major player in the meat industry – major disruptions could occur. "When you have only a few firms, in this critical midstream part of the supply chain — processing, manufacturing — the supply chain becomes very unstable. It lacks resiliency and is very subject to shocks to the system," Diana Moss, president of the American Antitrust Institute said to NPR.

JBS’ ransomware attack brings to light the need for the food industry to address cybersecurity concerns. The USDA is currently investing $55.2 million in grants to small and medium-size meat processing companies. “Through MPIRG, meat and poultry slaughter and processing facilities can cover the costs for necessary improvements to achieve a Federal Grant of Inspection under the Federal Meat Inspection Act or the Poultry Products Inspection Act, or to operate under a state’s Cooperative Interstate Shipment program,” Secretary Tom Vilsack said in a press release issued at the end of June.

Transportation technology is in the middle of a major revolution. This has been occasioned by the ever-changing technological landscape that is causing major inventions in the sector and improving efficiency on the existing transportation methods. The new inventions in the transport landscape are poised to reshape the way we move entirely. Here are six technologies that will change the transport and supply chain sector for the better, forever.

1. Self-driving automobiles

Self-driving cars are a new talking point in the world today. Many automakers are trying their best to find out ways in which self-driving vehicles can help. While the self-driving automobile sector is still in its early stages of development, it is finally here with us and is already proving to be of great value for the transport and logistics sector. Although some of the major concerns in self-driving vehicles, such as accidents, there is a great potential for this industry in the future.  

2. The internet of things

The internet of things (IoT) is among the leading technologies that are changing the transport, logistics, and supply chain in general. IoT ensures that people and items are connected through networks. The vast connected networks will influence many aspects of driving, such as the planning of routes. The IoT sensors placed in vehicles communicate with the GPS services to determine the right routes. This directs drivers on the best route they should take. Sensors are also crucial in alerting drivers of the position of other vehicles on the road, therefore preventing collisions. IoT is also useful in monitoring the status of the products/items being transported by identifying things such as temperature and the humidity of the containers.

3. High-speed rail networks

Railways have been there for decades and have proven to be helpful in the supply chain. However, high-speed rail networks are a new area of interest that is generating tremendous interest across the world. Beginning with Asian nations such as Japan and China, countries are hoping to increase their networks to make transportation effective. According to the officials, the United States is already in the initial stages of constructing high-speed rail networks. They are considering more than ten high-speed rail networks.

4. Advanced GPS tracking technology

Global positioning systems (GPS) have been helpful to logistics service providers in managing their supply routes for decades. In the past, GPS was used to assist in route planning, tracking freight, and providing general estimations for shipping costs. The modern GPS systems allow logistics firms to develop a better and accurate plan for their routes and adjust to weather. With mobile applications, customers can easily access freight tracking programs online.

5. Advancement in Wireless communication and CRM

Modern logistics companies are taking advantage of the advanced communication networks to deploy proprietary software or (Customer Relationship Management) CRM programs. This allows them to connect with their customers faster, accurately, and with little to no downtime. Most of these CRMs are cloud-based, therefore allowing remote access to customer’s logistics accounts via any internet connection. The enhanced customer service will improve efficiency among logistics firms.

6. Drones

Drones is a massive industry that has seen tremendous growth in many industries. In the United States, the introduction of Exemption 333 in 2015 by the Federal Aviation Authority (FAA), which lifted the prohibition of flying drones, saw many companies and individuals adopting drones. This led to massive investment and subsequent growth in the sector. Now companies such as Walmart and Amazon are investing in drone deliveries, an aspect that will change the supply chain industry for the better.

When everything runs smoothly at our ports, companies will get their goods at the right time, logistics firms will adhere to their promises to the customers and buyers will get their items in a predictable, timely and reliable manner. Unfortunately, this is not always the case. In many instances, there are supply chain disruptions caused by overcrowding, weather problems, and geopolitical problems. When you add the global pandemic into the mix, things take a new turn for the worst. With all these challenges, consumers are expected to increase in the future. Also, the amount of goods being shipped from overseas, mainly China, is expected to grow.  With this increase in demand, there is a likelihood of port congestion.

Port congestion or overcrowding is largely caused by the arrival of ships at the port but cannot be loaded or unloaded due to the already full capacity of the port. Furthermore, vehicles or trucks that transfer items can wait for long hours for their turn to get a spot at the port. However, with the problems listed above, the well-laid plans are disrupted, and the entire shipping process is slowed. According to INTRIX, a company that analyzes and ranks the effects of traffic congestion and overcrowding, congestion is "the demand for road space exceeding supply" and the impact of this is broad and often complex. Overcrowding leads to obvious time losses for both the companies and drivers, with losses from hours wasted waiting to load amounting to millions of dollars annually globally. In the United States alone, the total cost of congestion hit over $60 billion this year alone, with the majority of the losses occurring in urban areas.

With the pandemic-led lockdowns that curtailed the movement of goods and services, the movement in ports was adversely affected. The pandemic has disturbed the demand and availability of goods but increased the container volumes as companies tried to meet the sudden spike in demand following the reopening of economies after the lockdowns. Supply chain companies are bearing the most burden as the shippers play a critical role in the global movement of goods and trade. However, this cost is often passed down to the cost of delay to shippers, which in turn raises freight rates. The cost of storage also increases as the movement of goods is hampered.

In many countries, the growth of imports in combination with lack of adequate investment in port and inland transport infrastructure has been the main cause for decreased reliability and the rising cost of the supply chain and logistics. With the port congestion and overcrowding now that the world is reopening, companies are looking for ways they can solve the problem, both in the short and long term. For example, the American shippers and ports are concerned with looking for viable alternatives to handle imports in containers from the Far East due to congestion in West and West Coast.

Many options can be used as alternatives to normal shipping to avoid overcrowding, mainly in ports. One of those is air freight. While this option is fast and often ensures timely delivery of items, it is expensive and can be between 7-10 times that of sea transport. This makes sea freight a choice for many companies. Companies can also use alternative ports that are less overcrowded. However, such ports are often constrained in terms of resources and capacity to handle a specific type of item. There is also the rail transport approach for inland delivery of goods. This method of transport has its bottlenecks. Although these measures can offer a short-term solution to the problems, they will not solve them entirely. The solution lies with governments reconciling demands for road use with the available supply.

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.