According to Logistics Management, companies are moving to add more mobility solutions to their supply chains.

Over the last few months, global supply chains have faced disruptions the likes of which most companies have never seen before.

Read the article on Logistics Management

The fashion industry is hoping blockchain brings more transparency to the supply chain, App Invent IV.

The breach-proof record-keeping technology is being used for bringing transparency in the fashion industry supply chains, tracking the welfare of factory workers, and transferring the ownership of digital fashion, among a plethora of other areas which are the industry’s constant irrespective of what is in trend. 

Read the article on App Invent IV

According to Freight Waves, XPO Logistics is applying machine learning to its platform to help its customers anticipate inventory shortages. 

XPO Logistics (NYSE: XPO) is leveraging technology solutions to meet shippers’ demand for speed and agility, along with inventory management and reverse logistics, as the coronavirus pandemic continues to accelerate interest in e-commerce purchases.

Read the article on Freight Waves

Teletrac Navman, the global market leader in telematics technology, today announces the release of its next generation solution TN360. Powered by artificial intelligence, TN360 delivers telematics functionalities in real-time, providing businesses with simplified, smart, predictive and actionable insights.

“The digital transformation of the mobile asset and fleet management space has only just begun,” says Jens Meggers, President of Teletrac Navman. “Artificial intelligence, scalable cloud technology, real-time computer vision sensors and easy-to-use smart data analysis are completely changing the telematics market. We are at a pivotal step in the industry, digitizing vertical industries unlike any time before.”

Traditional telematics systems rely mostly on GPS and motion sensors as they collect a narrow set of data-points, centered on location, diagnostics and routing. These systems process linear calculations and produce important but limited feedback. TN360 uses a scalable cloud ecosystem that connects data from sensors, cameras, mobile and third-party applications in real time and translates raw signals into context.

AI-enabled cameras can be fully integrated within TN360.  Businesses can now perceive traffic obstacles, distance between objects, identify people and even predict potential safety hazards both on the road and inside the driver cabin. The ability to capture, connect, and process robust amounts of data with immediacy will transform telematics from a two-dimensional map application to a powerful real-time sensor network producing insights for a three-dimensional world.

While previous generations of telematics platforms aimed at eliminating paper-based reporting and processes, they required users to spend excessive amount of time analyzing digital reports to identify opportunities for improvement. Through AI, TN360 removes that analysis period for its users. It allows managers to take corrective action as soon as impactful outliers occur. The platform enables business operations to recognize patterns of efficiency in order to highlight opportunities in areas like route planning, logistic workflows, maintenance, driver behavior, compliance and fuel management. Users can quickly receive business intelligence metrics simply by asking a question of TN360’s smart AI engine with voice-command technology, eliminating the challenge of traditional data analytics.

“Our goal is – and always has been – to simplify mobile asset and fleet management for our customers,” said Andrew Rossington, Vice President of Technology, Teletrac Navman. “We built TN360 with an AI-first approach on the latest technology stack, delivering a paradigm-shifting product. We use this technology to process the masses of data collected and turn this into real answers. The platform converts data into decisions.”

Teletrac Navman’s next generation TN360 solution marks the next phase of digital transformation in the mobile asset and fleet management market. It serves as a nexus for data collection across all integrated systems such as engine information, driver behavior, camera sensors, temperature sensors as well as information connected via third party systems. Powered by AI, TN360 collects this information, constantly processing the ever-changing landscape, predicting critical insights to make an immediate impact on safety, compliance and efficiency.

 The ever-rising customer demand is disrupting all sectors of the economy, leading to innovation among those who are in the supply chain and manufacturing sectors. Unlike a decade ago when customers would place an order and wait for a week or even a month, customers today are impatient. They place an order that should be delivered as fast as possible. This has been occasioned by the increased competition in the manufacturing industry and supply chain, as well as increased customer awareness. For example, with the rising number of companies such as Alibaba and Amazon, customers have become choosy and tend to purchase their products based on the time it takes for them to receive their item. For these customers to be satisfied and stay competitive in the current marketplace, companies are now investing in 3D printing technologies to come up with products fast and ship it to the customer at an acceptable time.

As companies fight hard to remain profitable in hard times where customer demands have increased, 3D will be the leading solution to supply chain challenges. Sadly, this technology has not been explored as it should due to various reasons. Here are things that keep 3D printing from impacting the supply chain.

1. Inaction

The coronavirus pandemic has surprised the world. Although professionals knew that there would be a time when the virus would hit, the surprise is on how fast it brought the world to its knees. The virus has affected almost all areas of the economy. However, the virus has been felt more in the supply chain and logistics industry. The virus has made the movement of products impossible as social distancing regulations have been imposed to stop the spread of the virus. In such instances, 3D technology would have come in handy for many supply chain organizations had it been implemented earlier. Due to inaction among many companies, this technology could not help as it should have. Going forward, companies must consider taking advantage of various technologies, including using 3D printing as a lesson from the pandemic.

2. Failure to plan for the future

Many businesses have not planned their future as they should. This is despite the potential shift that would force companies to work with suppliers closer home. Apart from making the process of distribution complex, it leaves supply chain and logistics companies susceptible to disruption as it has been witnessed during the time of the pandemic, such as the one we are experiencing now. As it is now, even a single point of failure in the supply route can result in a serious problem in the delivery of items to the customer.

3. Mindset

Although 3D printing and additive manufacturing at large has shown immense potential, industry leaders are always reluctant to try this technology because of fear of change. They also prefer to stay in their comfort zone rather than trying new opportunities that can be beneficial to their operations and customer service. Some of the reasons that lead to this rigidity are the cost of implementation, accessibility to the technology, or fear to change operations. The current success of a business can also bring fear with regard to the reliability of the technology and the impact that the implementation of new methods can bring. Another major challenge is the lack of knowledge that is necessary to run new systems. This is often the leading problem when implementing new technologies.

As additive manufacturing keeps improving by the day, it is likely to impact manufacturing in a big way going forward. It is vital to think about the potential impact of 3D printing in the supply chain, how businesses can be protected, and ways this technology can be harnessed to improve services.

One of the leading topics of discussion that has emerged in almost every circle during the COVID-19 pandemic is the supply chain and the need to rethink this industry in general. The disruption of operations in this industry has also reiterated the need to deploy digitization and use virtual inventories. Using the approaches will encourage organizations to rethink their approach to supply chain and enhance their efficiency even during the time of difficulty as it is the case currently.

Although the pandemic has had a substantial impact on the supply chain, the need to rethink the industry was already there even before COVID-19 struck. When the US-China trade tensions rose last year, companies begun rethinking the cost of the supply chain network and the risk posed by the struggle between the two world’s biggest economies. The flexibility of networks helps companies to adjust faster when there is a problem that may stress the network. It also allows production teams to position themselves to meet the changing market demand, giving them a competitive advantage.

According to the analysis done by Bain, companies that have resilient supply chains grow faster because they can move with the changing needs of the customers when the demand in the market shifts. Flexibility increases the order rate by between 20% and 40% and raises customer satisfaction by more than 30%. Of great importance is the way flexibility in supply chain cuts costs and enhances cash flow. Leaders have also learned that disruptions can be lowered by building supply network buffers throughout the supply chain. Also, investing in advanced analytics also improves planning and accuracy in forecasting.

Over the past few months, a different chain of events has resulted in failures and losses in the supply chain industry. However, the main damage occurred when the outbreak emerged in China. The outbreak, combined with the country being the leading producer of the world’s goods, increased the problems that affected almost every country on earth. The shutdowns of factories that occurred in China caused by the virus depleted inventories, and many companies lost lots of cash as a result. The need to send workers home and limit travel reduced the efficiency of the supply chain, which is largely dependent on humans. The idea of minimizing the interaction of people and reducing travels made it hard for goods to move in the current supply chains. This became a huge challenge, even for essential goods such as medical equipment.

After learning from past mistakes and problems, companies are now investing in resilience to minimize risks and benefit from efficiency. For example, Proctor & Gamble deployed a cloud-based solution to offer real-time information about its production and external demand to its supply chain. The company’s ability to learn the areas that it can take advantage of helped it minimize the effects of Hurricane Sandy, which disrupted production at the factory in New Jersey. This factory produces more than 90% of P&G perfumes. The insights generated by the advanced analytics system helped Proctor & Gamble to make the right decisions faster and accurately. This limited the factory’s downtime to only two days. The experience from the past events allowed P&G to deploy digital tools to prepare for potential damages resulting from Hurricane Irma back in 2017. The company managed to prepare contingency plans and relocate its inventory to a safer location.

Decentralization of activities and teams can also benefit the supply chain significantly. It allows teams to respond faster to insights that are generated by advanced analytics systems and develop strategies needed for a faster recovery, that will help companies navigate times of disruption with ease.

Going by the past events and successes that have been experienced from deploying responsive strategies, companies must start investing in resilient supply chains that is in a better position to respond to unprecedented global disasters and enable movement of goods at all time.

As the coronavirus pandemic continues to disrupt global supply chains, businesses grapple with many challenges, including the complexity of calculating taxes on thousands of procurement transactions happening each day across state lines and international borders.

A patchwork of varying and constantly changing rates, regulations and exceptions across jurisdictions creates an enormous tax compliance burden. From sales tax to consumer use tax to VAT, the list of tax challenges along the supply chain is long:

• Overpaying/underpaying taxes;
• Claiming refunds from tax agencies–which in the case of VAT can be challenging; or
• Attempting to collect additional tax after a transaction­­–a difficult task that can damage vendor and customer relationships.

Discrepancies or flawed processes increase the likelihood of an audit and can tie up cash reserves, potentially preventing a business from capitalizing on growth opportunities and putting it at a greater risk in times of crisis.

The indirect tax legislative landscape will further intensify when governments calculate post-pandemic budget shortfalls and increasingly turn to transaction taxes to close revenue gaps. Because supply chain professionals are not necessarily responsible for ensuring their purchases have been rated properly for transaction tax and not every business is mature enough to have a tax department, businesses need to ensure that an automated tax solution is tightly integrated into their procurement systems.

Advanced tax software can provide real-time tax calculation during the requisition and invoice reconciliation processes, distinguishing between vendor charged, buyer payable, self-assessed and value-added reverse charge taxes, as well as multiple levels of jurisdictions. It can determine if a vendor has charged an appropriate amount of tax on the invoice which is used to determine any self-assessed taxes such as consumer use tax and VAT reverse charges.

Tax software automates the important procurement control task of validating transactions and determining if the invoice matches the purchase order and the materials/services received. An integrated tax solution allows buyers and suppliers to manage everything from exemption certificates to payments in one place. More importantly, it can empower purchasing managers with an accurate view of tax implications, in terms of total cost, when approving or rejecting a request for purchase. Additionally a robust tax automation solution can centralize the indirect tax requirements across the business, applying consistent tax treatment of every transaction and offering tax visibility across the enterprise and ultimately reducing compliance risk. 

Dealing with tax decision inaccuracies after the fact can result in overpaying taxes to vendors while escalating the company’s audit risk. In an age of increased regulatory complexity, supply chain functions are increasingly adopting automation to accelerate their payables processes and applying strong business validations to transactional elements, such as vendor data, product description and financial invoice details.

Tax compliance might not be at the forefront of the supply chain conversation, but ignoring it can affect cash flow and create reputational risk.

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Please remember that this article provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.

The coronavirus pandemic has turned the world upside down. As a result, the economy and everything else is feeling its impacts. One of the areas that have been hit significantly is the supply chain. With the social distancing and lockdown measures implemented in different countries in different regions, the movement of goods has encountered bottlenecks that have never been experienced before. With the rates of infection now increasing by the day, governments and different agencies are rushing to develop a viable vaccine that will protect millions of people around the world from death occasioned by the virus.

While there is a promise for a viable vaccine, and the entire process has proven to be crucial to the reemergence from the pandemic, finding a way to distribute doses to the people is also critical. This is where the efficiency of the supply chain comes in. It means that the manufacturing and supply chain must be up and running efficiently more than it was before. Tools and capabilities such as blockchain and the internet of things must also be leveraged in such times to ensure that the supply chain is transparent and effective. This will be able to guarantee the distribution of vaccines from the manufacturer to the people in need.

The global supply chain is in a place where it has never found itself before. The industry is hurting under the weight of the pandemic because of factory closures in major countries. With the development of a possible vaccine now progressing faster, there is a need to invest in the infrastructure that will help in the global distribution doses equitably as soon as the vaccine is proven to be safe and effective. The viable candidate for a vaccine must cover every continent, each country, and every individual. Assuming that one dose will be required per individual, at least 7 billion doses of vaccine will need to be handed into the hands of the medical care workers. If two dosages are needed per person, the volume required will be around 15 billion vials.

The supply chain for such a critical vaccine needs to be different from the conventional one. For starters, it must be equitable and free from geopolitical and economic influences. This is so despite these factors being the top aspects that will influence the development of the vaccine in the first place. An equitable supply chain can only be achieved by using technology, which ensures verifiability, immutability, and integrity, and no single source of control. This will mean that vested interests in the vaccine are fought as much as possible. Therefore, blockchain and distributed ledger technology will be necessary to enable transparency and immutability.

With the help of blockchain technology and IoT, the COVID-19 vaccine will be tracked from the source to destination in real-time. IoT will also measure crucial parameters such as the temperature, storage levels, and stocks, among other crucial aspects. Again blockchain and the IoT will ensure that the vaccine does not fall into the wrong hands along the supply chain. With these technologies, wastage, that has always affected the supply chain, will be reduced.

Although blockchain and the internet of things have not been deployed on a large scale, using it to distribute the COVID-19 vaccine will be a game-changer. This technology has proven to be useful in other industries that have deployed it on a small scale to enable real-time tracking of shipments. It will ensure that only authorized parties receive real-time data of shipments, and this data will not be altered.

The efforts to leverage technology are already in the process. However, with the coronavirus pandemic already here with us, these efforts need to be fast-tracked since a vaccine without a proper supply chain will not only be expensive but may cost more lives as well.

If there’s one lesson that organizations can take away from the challenges brought on by COVID-19 it is the invaluable benefit of digital transformation for business longevity. Digital innovation is not a novel endeavor, however, the pandemic has brought the importance of going digital into focus for many industries.

Illinois-based manufacturer Trim-Tex knows a thing or two about digital transformation. The specialist in drywall products and accessories has put cloud-based technologies at the core of its operations for the last two decades. But four years ago, the leadership team decided to go all in with a data-driven approach to running its business.

As part of my role as an IT analyst for Trim-Tex, we needed to align all of our business processes if we were to be able to focus all of our efforts into managing our company growth effectively. Some of the initial challenges we faced included our production, maintenance and front office operations, all working in silos, which meant that the data we generated from these departments were, more often than not, very segmented. This meant that our leadership team lacked the insight they required to help and manage growth.

Power of Information

Sage100cloud became a common fixture across our operations as it provided the necessary integration and data workflow that our organization required to be successful. From our finance to operations, our teams were able to tear down any departmental silos by reducing errors and decreasing the amount of time financial team members were spending on time intensive processes. The transition to a single, wholistic platform provider allowed us to manage all of our business in one place with readily available data across the entire business.

With access to such data intelligence, our finance team could analyze budgeting and inventory data which delivered instant insight on our highest selling product on any given day, our capital expenditure and expected future revenue. These equipped our leaders with the type of information they were looking for so they could spend more time on growth.

Digital Transformation Opens New Opportunities 

By going all in on this digital journey, we became a more nimble organization. Embracing cloud technology allowed us to bring more customization to our technology, especially within the customer relationship management (CRM) side of our business. We were able to increase our team productivity and foster collaboration. Additionally, with access to a comprehensive and detailed view of our customers and their needs, we are able to empower our staff with complete customer information from both the front and back end office systems, enabling them to make the right informed decisions to resolve any issues, resulting in improved customer satisfaction.

The hallmark of a successful digital transformation is an ability to instil a cultural change designed to align employees and departments towards a common vision that will set them up for continued growth. The technology changes we’ve made at Trim-Tex had significant impact on allowing us to take full advantage of information enabling us to make critical decisions and pivot when we need to. For many other businesses, their digital transformation mileage will vary, however, my view is that the key to success is to continue to experiment and innovate with digital solutions in order to come out a stronger and more agile market disruptor.

Several countries are trying to come up with different solutions to fight the rising cases of coronavirus pandemic. It is for this reason that technologies are now being combined to counter the impact of the virus. Radio Frequency Identification (RFID) is the latest technology that has made a comeback in many areas, including retail, supply chain, and logistics, as well as in healthcare. Now the technology is being used to fight COVID-19. With the help of microchips that are embedded in RFID tags, the journey of vaccines can now be tracked and authenticated from the manufacturer’s site to the testing site. The same technology can also be used to track personal protective equipment (PPEs), high-value COVID-19 treatment drugs, and antibody testing kits, among others.

Here are other ways in which RFID is used to combat the coronavirus pandemic.

1. Authentication of testing kits and PPEs

SUKU, a blockchain company, and Smartrack have partnered to develop a technology that will be used to verify and authenticate COVID-19 test kits and PPEs. Their approach takes advantage of near field communication (NFC) RFID tags. The data is fed into the digital identity platform developed by Avery Dennison and integrated into SUKU’s blockchain-based supply chain app. The partnership allows testing kits to be authenticated to ensure that they are legitimate products approved by the FDA. In the age of counterfeit products that have flooded the market, the technology is a step in the right direction which allows counterfeit items to be fought. This helps save lives as coronavirus is a deadly disease that requires quality materials, mainly for front line workers.

2. Real-time visibility of vaccines

The development of coronavirus vaccines is one of the leading areas of discussions in the world today. As such, many companies are struggling to come up with the best candidate for a vaccine to save lives and stop the ever-increasing infections. With this development, some companies are deploying cutting edge technologies to ensure the vaccine and plasma that is used to treat COVID-19 patients are tracked from source to destination. This is where RFID technology has found work. Biolog-ID announced back in June that it was supplying RFID technology to track convalescent plasma for LifeShare Blood Center. The plasma harvested from recovering coronavirus patients will offer antibodies that will help those suffering from the disease. With blockchain and RFID technologies, vaccines cannot be tampered with, and counterfeit drugs cannot access the supply chain.  

3. Hospital monitoring

RAIN RFID technology is used in many ways in a hospital setup. While most of these uses are not related directly to the current pandemic, their uses are helping healthcare providers in monitoring resources and ensuring there are high levels of hygiene. For instance, hand-washing hygiene is one of the mechanisms that are recommended by infectious disease specialists as a way of countering the spread of the coronavirus pandemic. RAI RFID allows hospitals to ensure staff complies with the hand-washing protocols and makes it feasible to do so. With an RFID reader situated at a hand-washing station, a tag or a badge on the uniform of a health worker can be read, and management can use the information to track people that have washed their hands when they did so and how.

RFID is also used in hospitals to track the inventory of medical supplies and other high-value assets. It allows administrators to do so without touching the assets or manually counting them. The technology allows staff to quickly locate what they want throughout the facility faster and effectively.

With the immense potential of RFID, it is evident that the fight against the pandemic will rely more on this technology in collaboration with others in the coming days. Governments and medical providers must, therefore, invest in it more if they are to increase their chances of success against the deadly virus.

A FedEx Express flight took off and landed without a pilot on board – furthering the discussion on the role robotics play in the supply chain industry. The flight took place at San Martin Airport in Santa Clara, California in partnership with Reliable Robotics using a Cessna 208 Caravan (C208) aircraft which is owned by FedEx Express.  In a press release, Reliable Robotics touted this flight as well as a previous test flight with a Cessna 172 Skyhawk as “historic firsts for global aviation.”

In a statement, co-founder and CEO of Reliable Robotics, Robert Rose commented, “By bringing advanced automation to aviation, we will deliver higher safety, reliability and convenience for cargo operators and eventually for passengers.”

While FedEx made no mention of this historical feat, they have continuously explored the benefits artificial intelligence can bring to their delivery operations. In 2019, FedEx successfully delivered the first commercial drone delivery to a home in North Carolina in collaboration with Walgreens and Wing Aviation.

What role does AI play in the supply chain industry? Is there room for improvement? If there was a way to successfully use robotics for deliveries – how long would it take for legislation to catch up with these advancements?

The use of robotics in different fields have continued to grow year after year – and that’s no exception for the supply chain industry. Warehouses have employed robots to help with sorting and packaging; ride-sharing giant Uber has started exploring self-driving cars; and even bars have started exploring ways that AI can reduce their overhead while still giving great customer service by serving drinks.

While robotics have always been on the supply chain industry’s radar- Covid-19 has advanced the need for intelligence. The supply chain was in serious trouble when the pandemic hit earlier this year. Shelves were empty, employees got sick, and many warehouses had to close their doors due to high infection rates among employees. Robots don’t get sick and subsequently don’t call out of work. If a pandemic were to occur again - warehouses with minimal staff and multiple robots may not be as hit as hard as before. Staff could social distance safely and robots could do a majority of the work.

Some experts believe robots can do even more with the supply chain field. In an article by Robotics Tomorrow, author Stefan Spendrup, Vice President of Sales Northern and Western Europe at SOTI ponders the role robots play in the supply chain industry and if they’re doing enough. He states, “…In order to gain the highest value, supply chains must optimise their robotic systems as part of an all-encompassing supply chain strategy, not just in silos.” By using robots in different aspects of the supply chain – it can all but guarantee that the supply chain can continue to run smoothly despite what is going on in the world.

While robotics may not solve the supply chain’s shortfalls – it can benefit from using artificial intelligence in different facets of the chain. Companies like FedEx are continuously examining new ways in which robotics can ease the burden of the supply chain while saving time and overhead cost to boot.

Chowbus is one of the newest contenders vying to make a name for itself in the food delivery market. But unlike its competitors who focus on a variety of restaurants – Chowbus aims to shine the spotlight on authentic Asian restaurants in one of the 22 cities it serves.

What began as a pipe dream in 2016, Co-Founders Linxin Wen and Suyu Zhang soon made it into a reality. “Why not create my own platform to serve these types of restaurants?" Wen thought after becoming frustrated that he could not get authentic, high quality Asian food delivered. “"I really wanted the restaurants to succeed and to cook the food they want instead of going with the flow,” Wen explained bringing to light a problem that many Asian restaurants grapple within the United States. Many of the beloved Asian dishes that Americans crave aren’t exactly authentic such as General Tso's chicken and fortune cookies which originated in America and are hard to find in Asia.

The pipe dream paid off and Chowbus became a staple in Chicago’s food delivery market – enabling them to expand to locations in both the United States and Canada. They recently added Houston to the list of cities they serve – much to the delight of Houston’s foodies.

Wen and Zhang took a gamble when launching Chowbus. Not only were they acting as a type of middle man – which can be difficult in the supply chain industry but most of their competitors focus on any restaurant within a city -which enables them to offer their customers a wide variety of foods from Mexican to vegetarian, pizza, and burgers. Because of this – the founders knew they had to offer a great service to not only the restaurants who were supplying the food but to the customers who were ordering it.

To compete with the likes of Uber Eats, Postmates, and Grubhub – Chowbus takes a smaller commission fee and enables customers to bundle food together from different nearby restaurants. For instance, in Boston, if I want to order from Bubor Cha Cha in Chinatown, I can also order from seven other Chinatown restaurants at no additional fee.

Investors in the food delivery industry have started to take notice of Chowbus. According to Forbes, the global food delivery market is on par to be worth over $200 billion by 2025. Uber Eats alone is valued at $20 billion and is expected to rise due to their acquisition last month of a rival food delivery service -Postmates.

While it may not be worth $20 billion yet, Chowbus recently raised $33 million by investors Silicon Valley-based Altos Ventures and New York City-based Left Lane Capital which will enable them to expand to other cities and expand its product line. “The capital efficiency with which they have operated, relative to the scale achieved, is extraordinarily impressive and not something we often see,” stated Harley Miller, managing partner at Left Lane Capital.

With the new investment, Chowbus continues to set themselves apart from other food delivery services as they create incentives for both the restaurants they serve and the customers they deliver to.  Showing no signs of stalling – Chowbus have continued to propel their business forward – going so far as to hire former COO of JUMP Bikes and GM of Uber Freights, Kenny Tsai as COO and  Jieying Zheng as Head of Product who previously held that position at Groupon.

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.