There’s no avoiding that data is a critical component of supply chain management. As its significance grows and the use of logistics technology expands, the challenges of taking advantage of what data offers a shipper become harder. But that shouldn’t be a deterrent because the free flow of data throughout an organization, including functional areas outside the supply chain, customers, and suppliers, has significant benefits that can’t be overlooked.
A common problem holding companies back is that bringing data together is difficult for organizations operating multiple technologies such as Transportation Management Systems (TMS), Warehouse Management Systems (WMS), Enterprise Planning (ERP) software, etc. Out of the box, these technologies don’t always allow for an exchange of data and information without some work on the company’s part — yet that data flow is critical to supply chain success. And unfortunately, most companies starting down this path find their data too decentralized and unusable. Overcoming this hurdle is possible but complicated and still a necessary early step.
Supply chain data that is kept apart from other systems and stakeholders is detrimental for many reasons. Poor supply chain visibility is the most obvious. When organizations store data apart (in ‘siloes’) across different departments or systems, getting a comprehensive view of the entire supply chain is impossible.
The first thing many people think about regarding visibility in a supply chain is the ability to determine the location and ETA of shipments. Without real-time data, companies may struggle to accurately track the location of both inbound and outbound shipments, resulting in inefficient production scheduling, poor routing decisions, delayed deliveries, and a lack of transparency for customers. The consequences of each will often include higher-than-necessary costs and a poor customer experience.
Another type of visibility has to do with analyzing costs accurately. If financial data is compartmentalized, it’s difficult to measure and understand the actual costs of most supply chain activities, including total cost of goods sold, shipping costs per unit, or other important metrics. This can lead to overspending and missing out on cost optimization opportunities.
As a final example, efficient inventory management requires companies to use data or risk the process becoming unnecessarily costly. Without a unified view of inventory levels, demand, and lead times, companies could overstock, leading to higher warehousing costs — or alternatively understock, resulting in missed business opportunities or unhappy customers.
Organizations with data kept in siloes will find it impossible to get a comprehensive cost or performance view of the entire supply chain, and it will be a challenge to make informed decisions regarding logistics, demand forecasting, and risk management.
Where siloed data adds kinks to the supply chain, connected data creates an efficient network with many benefits. Companies where data flows seamlessly through the supply chain and all systems are connected make better day-to-day and long-term decisions.
Cost Savings and Informed Daily Decision-Making
With better information, smarter and more cost-effective choices are possible. With an end-to-end supply chain view, companies and their partners can make more informed choices including when materials are needed for production. This can reduce the need for costly, expedited shipments.
Better Customer Service and Satisfied Customers
It shouldn’t be overlooked that, in the end, the supply chain supports customers' needs. Part of that is using connected data to provide the information the customer is asking for, and when systems and data converge, an organization can provide it. With real-time access to data on order status, shipment tracking, and product availability, they can respond quicker to customer inquiries and issues, contributing to better customer satisfaction and loyalty.
Companies that have successfully enabled free-flowing data and information and are realizing the benefits have done so by taking a few basic steps.
Leverage an end-to-end supply chain platform: Shippers and consignees should start by keeping the end goal in mind. Consider adopting an end-to-end platform that provides a unified view of your supply chain operations. This can start with sourcing and continue through final delivery and customer reporting requirements. Keep in mind a company doing so on its own will face a lot of planning, coordination, and cost.
Involve your customers: Customers are part of the data flow, and their needs must be considered at each step. This can include enabling communication related to P.O. management, shipment ready dates, SKU-level tracking, and inventory levels. Taken altogether, data interoperability with their technology and processes can’t be overlooked. This holds for their key suppliers, too.
Data integration solutions: Choose technology solutions and systems that allow different parts of the organization to share information seamlessly. They should be able to connect various software and databases, ensuring that data flows freely between departments. API and EDI are the most common data exchange protocols, and many applications come with pre-built integrations.
Choose partners with existing technology and integration capabilities: Selecting the right partners (e.g., carriers, 4PLs, and other LSPs) can help companies realize the benefits of true supply chain convergence — data that flows between and is available to all stakeholders. The best partners constantly innovate their approach and current technology to keep their customers on the leading edge.
Achieving supply chain convergence and realizing all the advantages of a 4PL relationship is a journey of transformation. By making the complex and intimidating idea of centralizing data simple, PSA BDP has helped companies of all types overcome the hurdles that are a part of the process.