With Greater Supply Chain Visibility Comes a Greater Need for Data Exchange Platforms

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By Ryan Wiggin | 4Q 2022 | IN-6712

A resilient supply chain requires effective data exchange between all stakeholders. Greater supply chain visibility and trade platforms should go hand in hand to create seamless exchanges of goods and automated processes.

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The FLOW Initiative Gathers Steam

NEWS


In his keynote address at ASCM CONNECT, the Port and Supply Chain envoy to the Biden-Harris administration, General Stephen Lyons, outlined his primary objectives to alleviate current U.S. supply chain disruptions. The strategy centers around fluidity and alleviating congestion, but as with any of the supply chain disruptions experienced in recent years, short-term fixes will be difficult. Physical assets cannot be built overnight, and workers will not suddenly flow back into the industry to alleviate shortages. As a result, data and transparency were hailed as the first step to focus investment and lay the foundations for longer-term efficiencies, with direct reference to the Freight Logistics Optimization Works (FLOW) initiative announced by the U.S. Government back in March, currently in its pilot stage. Led by the Department of Transportation, the participants in the project representing various points across the supply chain are working to develop a Proof-of-Concept (PoC) exchange, where data and information can be shared seamlessly and accessed by anyone for greater transparency of goods movements. As of August, the initial 18 companies had reportedly grown to 36, including shippers such as Target, Albertsons, and Samsung, carriers such as CMA CGM, Maersk, and DHL, and brokerage and warehousing providers such as CH Robinson and Prologis, as well as relevant terminal operators and port services.

Opportunity for Industry Platforms at All Levels

IMPACT


With such initiatives gaining traction as more stakeholders get involved, more data can become available to allow for better insights and forecasts to be drawn from the exchange. The idea is to create a virtuous cycle whereby the effectiveness of the data exchange increases over time as the number of data points grows, and with each additional member making it more attractive for firms to join, creating an open network that can provide a united approach in tackling pain points along the global supply chain.

CrimsonLogic and PSA International’s CALISTA platform is another example of an effort to harmonize international goods movements. The platform is a digital supply chain orchestration service offering to improve authenticity of data flows and real-time visibility to all stakeholders. In addition, the enhanced security of trade documents through blockchain technology and direct connectivity into customs authorities further develops this holistic connectivity between business and governments, radically reducing the amount of red tape and streamlining growing regulation processes. A similar service is offered by TradeLens, a joint venture between IBM and Maersk, which recently conducted a pilot transaction with Citi Group in Asia-Pacific. Citi Bangladesh imported agrochemical products from India for Syngenta Bangladesh with an entirely paperless process using an electronic Bill of Lading (eBL), resulting in a 10-day reduction of document processing times.

This harmonization among stakeholders is being considered at all levels of the supply chain. In the United Kingdom, Asda Stores recently selected TrueCommerce’s Electronic Data Interchange (EDI) solution to create a supplier enablement platform to cater to its 2,000+ supplier base. The EDI will allow internal systems to communicate with trading partners and automate business processes, facilitating a stronger connection with suppliers and creating a more seamless transfer of information.

Continued Digitalization Needed to Underpin Trade Connectivity

RECOMMENDATIONS


For global connectiveness and open data exchanges to become mainstay, both a bottom-up (end user) and top-down (technology vendor) approach must be considered. For end users, seamless trading partnerships can only be as good as internal practices will allow. If internal asset tracking and data gathering is patchy, cooperative platforms will not be gaining the accurate inputs needed from each point of the supply chain for effective utilization. Investment in both product tracking and cloud computing is, therefore, becoming more of a requirement for businesses to contribute and reap the benefits from these wider platforms. With full traceability and real-time tracking internally, goods can remain visible as they change hands and help avoid any kinks that can cause wider disruption.

For technology vendors, there is a key role to be played in creating both accessible visibility solutions, as well as allowing these solutions to seamlessly integrate across the ecosystem. The handlers at every stage of a product’s journey, from origin to consumer, can change almost daily, meaning that seamless communication between automated systems and product tracking solutions is critical for smooth transactions. Particular focus may be required to assist Small and Medium Enterprises (SMEs) in facilitating the necessary digitalization to ensure that certain players in the industry don’t create black holes along the chain due to unavailable capital.

Countries quicker to adoption also have an opportunity here. If governments can accelerate digital transformations by accepting digitalized trade compliance systems and harnessing trade platforms, they can become much more attractive trade partners, giving both businesses and the economy a competitive edge in the global market.