According to Supply Chain Dive, Amazon is investing heavily in robotics technology. 

While Amazon did not specify what types of robotics it would develop at the site, past examples of Amazon Robotics technology point to innovations that solve pain points in operations and logistics.

Read the article on Supply Chain Dive

As the cost of internet of things sensors declines more businesses will use them in their supply chain operations, reports Supply Chain Dive. 

Forrester Research released a report last year predicting two areas — track-and-trace and inventory and supply chain management — would experience the largest spending growth on IoT between 2017 and 2023. 

Read the article on Supply Chain Dive

Ralph Lauren will now track its products digitally through the supply chain, reports Supply Chain Dive. 

Ralph Lauren says it is the first global retail brand to apply this type of technology at scale. 

Read the article on Supply Chain Dive

Volvo is working with its battery manufacturers to ensure that its cobalt supply chain is ethically sourced, reports Yahoo Finance. 

Swedish car manufacturer Volvo has announced that it will be leveraging blockchain technology to improve traceability of the cobalt used in the company’s car batteries.

Read the article on Yahoo Finance

Retailers often face challenges when it comes to balancing their acts within their supply chain. This said, understanding the elements that make a multichannel and omnichannel supply chain is critical to success of any business and is essential for profit-making. With the rise of the internet, multichannel supply chain has gained traction and offers companies a variety of options on how to reach their consumers. However, determining the most efficient set up despite the technological tools at your disposal is not as simple as many people would want to believe.

To maximize multichannel efficiency in your supply chain, you should consider the following:

1. Automate your operations

Automation is now taking over various industries and your supply chain should not lag behind. The simplest way of introducing automation to your firm is by building it into your return process. Automation eliminates problems in return policies that are among the key challenges that many consumers face. With proper automation, you can analyze efficient routes, crowded warehouses, and you can also track complicated shipments and inventories more easily.

2. Train your employees

Employee training in the supply chain should be done regularly considering the ever-changing technological landscape. Training should be done on multichannel selling to enhance continuity of experience among the employees and ensure that your customers always get consistent and the best service. Your employees should always be aware of the conditions in the market, discounts and promotions, coupons, loyalty perks, and your partners. Keeping your employees aware of different aspects of your business will not only increase your company’s employee retention rate but will also improve customer and employee satisfaction and maintain predictable outcomes.

Employee training should stress a culture of trustworthiness as this is the key to progress and success. One way of establishing trustworthy employees is by investing in employee awareness that focuses on security. These programs should also attempt to bolster your firm’s commitment to efficiency in operations.

3. Design proper incentives

Investing in technology is good but technology alone without proper pay for employees will water-down your efforts. As such, incentives for your employees should be properly engineered based on the pay-for-performance scheme as doing this can result in improved labor productivity and efficiency. Since more than 50 percent of warehouse labor is pick-and-pack, you need to be sure that you are paying for productivity you are getting.

4. Simplify processes

Long complicated processes in the supply chain are what turn away many clients and potential customers. If you have been layering new processing over the existing ones and you feel that the product flow no longer makes sense, you need to take a fresh look at the physical processes involved. You need to ensure that processes involved in product flow and fulfillment of orders are short and less complicated since fewer steps and fewer touches lead to lower costs and increased efficiency altogether.

5. Invest in analytics to measure performance and transparency

Transparency is a leading area that every customer considers in any supply chain and logistics company. Although many companies have infrastructure in place, inventory visibility across the organization still eludes most of them. Considering this, transparency and visibility in your organization will be a good area to look into if you want to make a difference and improve productivity. You may consider partnering with a software company to find appropriate tools if developing a software solution is daunting.

Another critical part is analytics. Applying analytics in your supply chain business gives you an edge as it helps you anticipate trends and respond to them quickly. When you invest in analytics to collect data, you can identify key performance indicators and find out drops in demand that may affect your business that will end in significant cost savings.  

A new Barcode Assessment study conducted by AmerisourceBergen Corporation, McKesson Pharmaceutical and Cardinal Health, in collaboration with GS1 US®, revealed that 74.3% of pharmaceutical barcodes scanned in the wholesalers’ facilities meet the 2013 Drug Supply Chain Security Act (DSCSA) serialization requirements—a 54% year-over-year improvement when compared to the same study conducted in 2018. Details of the Barcode Assessment study are published in a new GS1 US report, “2019 Update: Barcode Readability for DSCSA 2023 Interoperability.”

 During summer 2019, nearly 18,000 barcodes produced by 747 manufacturers were scanned at AmerisourceBergen and McKesson distribution facilities for this assessment. Additionally, another 19,000 linear and 2D barcodes applied to approximately 8,000 cases from 177 manufacturers were scanned at Cardinal Health facilities. These barcodes and the data they carry were evaluated to determine if they contained the four data elements required by the DSCSA to support an interoperable, electronic system to identify and trace pharmaceutical products. The four essential data points required by DSCSA include a National Drug Code (represented by a Global Trade Item Number®, GTIN®), serial number, lot number and expiration date. The DSCSA also specifies that packages (“lowest saleable units”) must be marked with a two-dimensional (2D) barcode (e.g., GS1 DataMatrix barcode), and that homogeneous cases must include a 2D barcode or linear barcode (e.g., GS1-128 barcode).

  Specifically, the results showed:

- Of the specialty products at AmerisourceBergen, 71.9% of all packages had a readable 2D GS1 DataMatrix barcode with all four DSCSA-required data elements (compared to 20.4 percent in 2018).

- 71% of prescription products at McKesson’s facility met the same requirements (compared to 20.8% in 2018).

- At Cardinal Health, 78.7% of homogeneous cases with 2D (GS1 DataMatrix) barcodes and 73.3% with linear barcodes had all four data elements (compared to 15.1% in 2018).

Angela Fernandez, vice president, community engagement, GS1 US, noted, “The tremendous progress made in the past year underscores how pharmaceutical companies are prioritizing serialization to benefit the entire healthcare system and prepare for DSCSA electronic data exchange requirements by November 27, 2023. The industry has come a long way since 2017, when only 7% of packages carried all the necessary data elements. The number of serialized products found in this year’s assessment is particularly significant considering the supply chain still contains some products that were ‘grandfathered’ and placed into inventory before November 27, 2018.”

A grandfathering allowance from the U.S. FDA ensured supply chains remained stocked with inventory, and patients could obtain proper medications when needed. As the grandfathered inventory continues to be consumed, serialization percentages are expected to rise even higher. The average expiration date of products found in 2019 inventory was 1.6 years, compared to 2.3 years in 2018.

 For more information about serializing pharmaceutical products, download the GS1 US Implementation Guideline: Applying GS1 Standards for DSCSA and Traceability. To access the 2019 GS1 US Barcode Assessment report, please visit www.gs1us.org/barcode-readability.

Consumers want eco-friendly fashion. Brands want sustainable businesses. So how does the fashion industry get there? The short answer is with a little help from the supply chain.

A lot of changes have to happen—and some companies in the fashion industry are already making them. Brands are investing in high-tech materials, using recycled and upcycled fibers and sourcing natural materials that are raised and produced responsibly.

As businesses continuously adapt their models to consumer behaviors, a smart supply chain partner can help its fashion customers identify where they can lower their carbon footprint. Here are some examples of approaches they might take.

1. Applying tech to tune up transportation

For many businesses, the transportation component of their supply chain accounts for a significant piece of their CO₂ footprint. The impact of shipping goods to warehouses, stores, consumers—not to mention the returns adds up. 

Technology and innovation must play a key role for supply chain businesses to help their retail partners reduce emissions. Why is it so important? Investing and harnessing technology ensures loads are optimized and trucks don’t travel half empty.

For instance, a sophisticated digital marketplace that matches supply and demand in real time across the transportation ecosystem can lower a fashion retailer’s carbon footprint in a flash. The ultimate goal is to unify and automate the fragmented freight marketplace, making it more environmentally friendly by slashing empty miles, which lowers emissions and fuel waste.

2. Turning returns into an environmental boon

Skyrocketing online apparel sales equal a higher volume of returns. But rather than ratcheting up a fashion brand’s environmental footprint, returns can be an avenue for supply chain partners to offer the right services to retailers. This can range from expertly ironing, repairing or reboxing a returned item, to recycling it into new fabric.

Using technology to track orders and inventory throughout the supply chain can help identify when a product has been returned by a customer, and when another customer has ordered the same item. Using that insight, the product can be routed to a return center closest to the customer who just placed the order, rather than send it to sit inside a distant warehouse. The item can then be quickly prepared for reshipment, limiting its travel distance, and therefore, fuel emissions.      

3. Analyzing operations to pool and save resources

Luxury fashion groups often have different warehouses and transportation operations for the many different brands within their portfolio. Sometimes they need help from their supply chain partner to sort out commonalities among these different brands so they can share infrastructures and resources. For instance, setting up shared transportation for two sister brands can avoid the problem of two half-empty trucks going to the same location. The result is lower costs, better capacity use and more environmentally friendly operations.

In a world where consumers have access to a vast array of products via various media platforms globally, the supply chain has to adapt to support today’s shopping experience and consumers’ expectations of sustainability.  

However, the infrastructure and networks aren’t infinite and everyone needs to use them. We all need to embrace collaboration to support these demands, invest in technology to bring new approaches to life and create a dynamic supply chain that limits the impact on our planet’s resources and makes the links as sustainable as possible.

It’s our role – as supply chain providers and fashion industry – to add our weight to speed up the transition to sustainable fashion. 

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Richard Cawston leads the supply chain business of XPO Logistics in Europe.

On July 6, 2018 after months of threats, the United States began to collect a 25% tariff on $34 billion worth of imported Chinese goods. Today, that number has reached $250 billion with the US-China Trade War showing no sign of being resolved in the near future.

When the tariffs were announced, American businesses didn’t race to pull their sourced imports from China opting instead to see if a resolution would be quickly reached. With so many corporations deeply routed in China it would cost them millions of dollars to move their production elsewhere, essentially destroying the Chinese business relationships that they’ve built up over the years.

Over a year later – it’s become a different story as both American and foreign-based companies are pulling their production teams out of China and moving them elsewhere. “People are not waiting, companies are not waiting to see what the outcome is,” Larry Fink, BlackRock Chairman and CEO discussed on CNBC’s Squawk Box.  Nintendo, Apple, and Dell have already made the decision to move a percentage of their production out of China with many other business following suite.

United States President Donald Trump had initially urged these companies to bring their production back to the United States - creating thousands of jobs for the American people. Instead, companies are looking elsewhere to countries like Vietnam, India, and Mexico to meet their production needs. “We have been shifting production to Vietnam very aggressively,” CEO of Lovesac Co. Shawn Nelson told The Wall Street Journal. He told the newspaper that by the end of next year he plans to have no production in China.

A recent poll conducted by law firm Baker McKenzie found that 82% of companies around the world say they are transforming their production and supply chain due to the trade war. Approximately 18% of these companies are moving their entire business away from China. Another 58% are moving a percentage elsewhere while keeping a majority of their production in China – a move that will essentially altering the supply chain industry.

Regardless of the outcome of the US-China Trade War, China is in a tight predicament that has already seen a steep decline in monetary growth. After announcing that China’s growth was down, spokesman Mao Shengyong from China’s National Bureau of Statistics stated, “Economic conditions are still severe both at home and abroad, the global economic growth is slowing down…” He goes on to say,  “…the economy is under new downward pressure.” As more companies exit the country that downward pressure is only set to increase.

As of June 29,^, 2019, trade negotiations were set to resume between both countries. At the time of publishing, the trade war is ongoing. Even if the war were to end tomorrow many companies have already begun moving their production out of China- a time consuming and costly endeavor. Chances are they would not spend additional money moving their production back to China once the two nations resolve the issue. China is not the only country to be effected by the war. China has hit the United States with tariffs of their own to the tune of $110 billion.

Disruptive technologies have altered the landscape in modern organizations. In the realization of this, business leaders are coping with these technologies and identifying opportunities and challenges that their businesses can address if they adopt them. In warehouses, for instance, robots have proven to be efficient and quick compared to humans. However, although managers and leaders in the supply chain may be longing to acquire robots in their companies, huge amounts of money and expertise can be obstacles.

As with software-as-a-service (SaaS), robotics companies are following in their footsteps by offering robotics-as-a-service (RaaS). RaaS makes deployment not only easier but also more feasible. This service is a cost-effective and scalable approach for adopting robotics in warehouses without spending too much on training and infrastructure. With such deployment of robots in businesses, the adoption of robots will increase. For instance, ABI Research notes that the RaaS concept will see approximately 1.3 million deployments globally by 2026. Of this number, the largest deployment will be in the logistics and manufacturing industries. With these projections robot purchases will be eclipsed by RaaS deployments in terms of revenues.

RaaS everywhere

The adoption of RaaS concept will be helpful in deploying robots as required by industry standards. With this model, user organizations will get to know more value that comes with deploying secure robotics solutions as compared to just deploying infrastructure. This will reduce the effort that organizations have to manage in the back office. The sluggish processes associated with a lack of trained personnel and poor, low-quality infrastructure will be replaced by highly qualified professionals and world-class robotic infrastructure.

Many large logistics companies are turning to robotics to improve their work rate and enhance efficiency in their warehouses. However, for companies that decide to develop and manage their own solutions in-house, adoption can end up being unpractical and lacking cost-effectiveness in the long run. The cost of managing robots and the expertise needed to maintain it may end up consuming more resources. Coupled with fast-changing business environments, it becomes difficult to ascertain the long-term benefits of robots to a business. For example, in the logistics industry which is characterized by constant pressure and ever-changing trends, it can be difficult to predict future needs.  RaaS enables logistics companies to minimize risk by reducing uncertainty and barriers to adoption by offering deployment of robots with minimal costs.

Professional help

Deployment of robots as needed enables supply chain leaders to adopt flexibility with reduced risk. Whereas typical robotic deployment can take up to two years of planning and installation, going for RaaS alternative will shorten time for planning because professional RaaS service providers already have tested and proven models that are working. This can get a business up and running within a few weeks. The deployment can begin as a pilot before going full scale. Such deployments are flexible since you can only pay for what you are using. If your business goes down, for example, you can reduce the number of units. You can as well increase the number of robots as workloads increase.

Proper deployment of robots will improve adoption and lead to establishment of positive experiences. With the of RaaS it is expected that organizations will benefit from their support on labor shortages. It enables warehouses to operate more hours and increase turnover which leads to more growth. At the same time, costs of doing business will drop since less money will be spent in operations.

When disaster strikes an area, survivors are in crucial need of supplies in order to survive the hardship. In most cases homes, roads, and many structures are decimated making it tricky for survivors to access life saving goods. When a disaster hits an island – survival becomes even tougher. Hurricane Dorian barreled into the Abaco Island and Grand Bahamas at the beginning of September. The Category 5 hurricane slowed down considerably – hovering over the islands from September 1^st to the 3^rd  leaving considerable destruction in its wake. As of today over 1,000 people are still missing with over 70,000 homeless.

In a statement Prime Minister of the Bahamas Hubert Minnis called Dorian “the greatest national crisis in our country’s history” stated, "Our urgent task will be to provide food, water, shelter, safety and security…”

In the past the obstacle was getting the much needed supplies to the survivors after a natural disaster hit an island. Donations are made by people all over the world but there is no way of getting those goods into the hands of the survivors. This is precisely the obstacle that both FedEx and UPS hope to prevent in the aftermath of the hurricane. The delivery giants have both donated a significant amount of money and time to ensure that the supplies get to the Bahamas.  

FedEx has partnered with nonprofits; Direct Relief, International Medical Corps, Team Rubicon and Water Mission to help the hurricane victims. The company plans to donate $500,000 to the victims – part of their ’50 by 50’ goal - a campaign to help 50 million people by their 50th birthday.

The president and COO of FedEx Raj Subramaniam stated, “Many of the people in these hard-hit communities have lost everything and are in desperate need of help. On behalf of more than 450,000 FedEx team members around the world, we are proud to be able to use our global network to provide these lifesaving resources.

Like FedEx – UPS is also trying to help victims of Hurricane Dorian by donating much needed food and supplies. Together with the UPS Foundation UPS has vowed to donate $1 million towards the relief efforts. UPS partnered with the U.S. Agency for International Development (USAID) to bring supplies to the impoverished areas. UPS supplied the plane while USAID supplied enough water bladders, hygiene kits, and water buckets to help approximately 40,000 people on the island.

Eduardo Martinez, the Chief Diversity and Inclusion Officer of the UPS Foundation noted in a statement-  “It’s times like this when we are most grateful and honored to support the relief organizations and first responders helping to save lives and serve communities when they need us most.” He went on to say, “These efforts are just the beginning of our commitment to the long-term recovery of the impacted areas.”

Like FedEx and UPS - the supply chain and logistics industry is responsible for bringing much needed supplies to areas hit hard from natural disasters. Whether it’s the warehouses that house the donations before they can be shipped out; planes and trucks that deliver those goods or workers that pack the carriers and operate the vehicles – these companies ensure that disaster victims get the supplies they urgently need.

The trade industry is not the only career path affected by this generation’s connotation of blue collar jobs. For years it was ingrained in high school students that a college degree was the way to prestige and wealth. In fact, I spent the better part of my twenties convincing people that I had a “real job” in the restaurant industry. As the negative perception spread, the need for laborious jobs increased and entire industries faced a shortage of workers. In an industry that relies heavily on long-haul truck drivers to move goods – the supply chain and logistics business have seen first-hand how far this negative perception can go. According to a report by the American Trucking Associations (ATA) – last year saw 60,000 truck driver positions go unfilled. That number could potentially increase to 160,000 by 2028.

Like the trade industry it’s been increasingly difficult for businesses to attract potential applicates. Truck drivers are subjected to long hours on the road often times by themselves. This solidary lifestyle often times leads to depression and little to no time for a regular life. Most people in their twenties want to hang out with their friends on the weekends. Those in their thirties and forties want the stability of a 9-5 lifestyle in order to raise a family.  

Health issues also come into play. Most long-haul truck drivers stay sedentary for most of their shift which can lead to back and posture problems. Combining fast food and little sleep – the risk of obesity, heart disease, diabetes, and high cholesterol increase drastically.

A third issue that the supply chain industry is facing is finding qualified drivers.  Truck driving becomes treacherous if the driver trained properly. Due to insurance and liability most truck driving requirements are rigorous. Not only are businesses short of applicants but their short on eligible applicants with the correct certifications and experience.

One of the main stereotypes of a truck driver is an older white man smoking cigarettes. One of the ways that the trucking industry believes it will solve the shortage is to hire more women and minorities. Jeremy Reymer, the found and CEO of DriverReach told Transport Topics ; “[There is] a lot of opportunity to improve the image of the industry when you add women to the picture.” According to the ATA report as of 2018 only 6% of all truck drivers were women.

Why are there so few women? One of the main reasons is that long-haul truck driving is seen as a “man’s job”. Ellen Voie, president of Women in Trucking Association explains, ““Women don’t picture themselves in a truck or in the industry because they aren’t exposed to successful women who enjoy a great career in trucking.”

This steady need for truck drivers is an issue that the logistics and supply chain industry will need to combat before it starts affecting other segments of the supply chain. Shipping delays are already become more common and are expected to steadily increase. The supply chain and logistics industry will need to figure out how to slow the decline of truck drivers- if not shipping delays If not, the impact will be devastating.   

Drone delivery is an emergent industry that’s at once promising and riddled with setbacks. According to McKinsey, the US drone delivery industry grew from $40 million in 2012 to $1 billion in 2017. This is despite the fact that it’s currently illegal to fly commercial drones above people and within U.S. airspace, per Federal Aviation Administration (FAA) regulations.

Amazon, a leader in ecommerce drone deliveries, insists that drones can carry packages to customers quicker, cheaper, and more efficiently than trucks.

Airborne transport would indeed cut costs and accelerate deliveries for businesses, but some U.S. consumers and regulators are hesitant.

In the EU and UK, though, drone delivery is progressing despite concerns about public safety and costly damage due to malfunctions.

This article discusses how drone delivery is evolving globally and how US consumers perceive this technology.

Amazon Started and Sustains Push Toward Drone Delivery

Jeff Bezos announced Amazon’s drone delivery program in 2013, forecasting that it would arrive in 5-10 years.

Keeping with Bezos’s timeline, most Americans (75%) anticipate that drone delivery will be offered by 2021-2026, according to a survey by the United States Postal Service (USPS).

(Source)

Many companies invested in drone delivery after 2013, though mostly outside of the U.S. due to the FAA’s prohibition on commercial drones.

For example, in 2014, DHL successfully experimented with flying medicine via automated drone to the German island of Juist.

Iceland’s largest online marketplace, Aha, has used drones to deliver consumer goods around Rekjavik since 2017. Delivery times dropped from an average of 30 minutes to five minutes.

Stateside, Google recently partnered with the Department of Transportation to conduct testing for commercial delivery drones. In Australia, Google’s Project Wing is delivering medicine and burritos to the outback.

The U.S. regulatory landscape is increasingly tolerant of delivery drones, due largely to Amazon’s lobbying and the technology’s advancements

Amazon has made the greatest strides in the UK, where commercial delivery drones could be deployed as early as 2020.

Drone Delivery is Faster, Cheaper and Far-Reaching

The rise of rapid-delivery e-commerce boosts the appeal of drone delivery for both consumers and businesses.

According to the USPS, the most popular benefit of drone delivery for respondents was 1-hour delivery.

More than half of people (56%) believe that drones can accelerate delivery times. This is because drones avoid traffic, bad roads, and reduce transport time by taking a direct line to consumers.

They’re also more effective at delivering to rural areas, mountains and islands, and destinations removed from the recipient’s primary address. Because of this, people are interested in using drones as emergency delivery systems.

Drone delivery also offers significant cost savings to businesses.

Airborne parcel carriers allow distributors to streamline the costly “last mile” of the delivery process. This helps companies save on fuel, fleet maintenance, and the labor costs of human drivers.

Drones are powered by batteries or solar energy and thus environmentally friendly. This means that they could, if accepted, boost brand positivity among consumers.

Drone Delivery Faces Varied Obstacles, Including Reliability and Regulations

Drone delivery faces a variety of obstacles, such as consumer mistrust, technical reliability, and regulatory limitations.

Risk of malfunction is the primary reason that Americans don’t yet trust delivery drones, according to the USPS.

(Source)

Drones also raise concerns about personal safety, damaged packages, and theft. According to eMarketer, 72% of consumers worry about problems with their packages if delivered by drone.

Flying parcels around a city is a technically fraught process, at present. This is because various human and environmental factors can easily interfere with delivery drones, including: 

• Hacking
• Theft
• Weather
• Animals

Each factor greatly increases the likelihood of a costly or damaging malfunction.

Given these unresolved issues of safety and reliability, drone delivery is still illegal in the US.

Amazon is lobbying for drone-friendly skies, though it’s unclear as to how the company plans to mitigate the concerns of both U.S. consumers and lawmakers.

Until these issues are addressed, companies stand to lose brand positivity by associating themselves with drone delivery.

However, businesses can work with a supply chain and logistics consultant to take advantage of drone delivery in the future.

Global markets are ready to adopt drone delivery, and a logistics professional can help your company to maximize this technology when it takes off.

Delivery Drones on the Horizon

New technologies are changing supply chains and how customers receive packages.

Support for delivery drones is mounting in the U.S. and abroad, though certain concerns have yet to be addressed.

Consumers are anxious about drones overhead, while companies are eager for an opportunity to cut costs, speed delivery times, and extend their distribution.

Once delivery drones take flight in the EU and UK, regulators in the U.S. may follow suit.

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Riley Panko supports BPO services and technology segments on Visual Objects and Clutch.

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.