Much has been spoken on the benefits of greater collaboration between links in the supply chain, but a significant amount of processing is still done manually, reducing visibility and increasing errors. Everyone knows that automated processing is better – more accurate and ultimately lower in cost – so what stops the global supply chain from making more rapid progress? Is it the cost?
Partly, yes – cost is always a factor. However it’s more than cost, it’s about accessibility – playing to the lowest common denominator.
The days of vertically integrated supply chains are long gone – transporting goods nationally, inter-region and internationally will almost certainly involve a number of partners. And the size of those partners – and resources available to them in terms of IT infrastructure and personnel and CapEx will vary widely according to how, where and when goods need to be transported. This is important to remember because it has a direct bearing on the ability of these supply chain partners to ‘comply’ with any demands to exchange data electronically.
The obvious answer is for shippers and retailers to only work with logistics partners who can meet ecommerce standards they set, perhaps interfacing directly with their transportation management system (TMS) and/or their order fulfillment system, and for LSPs to become more demanding of their sub-contractors. However in less mainstream locations in developed countries and in emerging markets, many transportation partners have neither the technology know-how nor the budget to invest in software licenses and hardware. And of course ‘standards’ can only be met when there’s an established trading relationship – they’re not much use when managing an exception means working with a new partner at short notice.
These companies may want to do business, but cannot practically meet requests for greater IT sophistication. Yet if they’re the only trucking company that run that route or the only ocean carrier that makes a particular crossing that will mean you make your schedule then you need to do business with them regardless. This is where Cloud really has the potential to make a difference.
Large retailers have made huge progress in automating transactions with their suppliers, with some approaching almost fully ecommerce trading. However all will tell you that they have had to relax or modify their preferred standards to accommodate smaller suppliers who produce niche or seasonal products or those that are important in demonstrating a breadth of range (upscale supermarkets for example increasingly stock items of local provenance to meet customer demand).
Those that are closer to full ecommerce operations with their supplier base are probably those that allow for the smaller players and allow them to trade through simple web portals that require only an internet browser and a user fee in the low hundreds to access. By taking into account the needs of the smallest and least sophisticated supplier, they’ve achieved a greater percentage of trading electronically. A win-win.
Extrapolating this through the supply chain means that shippers, retailers and large 3PLs have the flexibility to use the multimodal transportation partners they need to keep their supply chains moving – if they need to use a small trucking company because they cover a remote area or use a different short sea ferry operator than usual because they’re re-routing due to bad weather conditions, they can, without compromising on shipment visibility.
By using Cloud technology to promote collaboration, for example through the use of web portals that allow the upload of information and documentation as well as simply viewing it, and offering web apps that enable sub-contractors to maintain a real-time flow of shipment data via their smartphones, leading supply chain software vendors such as Kewill are assisting shippers, retailers and LSPs in truly connecting their supply chains.
It’s this combination of flexibility and visibility that helps to maintain profitability by managing costs every step of the way which, of course, benefits everyone.