Much of the information technology currently being used to manage supply chains is increasingly unable to provide the right level of support due to rapid changes in global manufacturing and trade practices.
For many companies in Asia and worldwide, the key requirement now is for more networked solutions which can operate alongside/integrate with similar platforms and solutions all over the world – along the lines of the ecosystems seen in nature.
Those were two of the key points highlighted in a white paper, Ecosystems and Evolution, published in October by Transport Intelligence, a UK-based provider of worldwide logistics industry research and analysis, in partnership with Kewill, a global supplier of computer software and services for managing the supply chain.
“Manufacturing mechanisms and global trade are evolving at an accelerating rate. This has huge implications for the supply chain management and logistics networks that enable and orchestrate them. Many of the legacy tools implemented to support these endeavours are unable to do so in an appropriate fashion,” claimed the white paper. “Today, companies are looking for networked solutions that exhibit similar characteristics to the ecosystems that have evolved in the natural world. These natural systems have evolved to be both resilient and enduring.”
Within the supply chain, it explained, such ‘ecosystems’ were designed to co-exist and integrate with similar platforms and solutions worldwide. They worked across functional silos and application boundaries, combining a mix of capability that used to be tightly defined according to function, for example, WMS (warehouse management system), TMS (transport management system), OMS (order management system), etc.
Elaborating on those points during a webinar held to launch the white paper, Daniel Vertachnik, chief sales officer for Kewill, said an ecosystem surrounded the supply chain, “so the logistics software market, to be successful, has to understand what the ecosystem is, has to be able to tap into that ecosystem and draw from it – and for the ecosystem to be successful in the supply chain, we will have to be able to connect and to tap into each other.”
The ecosystem for the supply chain, said Vertachnik, planned, sourced, manufactured and delivered products across the globe. That required the involvement of a lot of organizations, including suppliers, carriers, manufacturers, brokers and government agencies.
“We are all interdependent on each other, so there has got to be visibility and collaboration across the supply chain. The question is how do we do that, how do we comply with those government agencies and regulations, how do we make sure that we are all in compliance from one end of the supply chain to the other?”
The answer, Vertachnik suggested, was that while each partner needed its own technology configuration to achieve what was required within the four walls of its own individual business, all the parties involved in the supply chain had to be integrated and have connectivity with each other.
In that context, Ken Lyon, a specialist in the use of advanced information systems to manage logistics operations, managing director of Virtual Partners and an advisory board member for Transport Intelligence, used the webinar to highlight four key supply chain information technology issues covered in the white paper – cloud technologies, the significance of understanding data context, full visibility and points arising from development of ‘the internet of things.’
On the subject of cloud technologies, Lyon suggested that while there was a lot of misinformation around, “one of the huge benefits of this kind of technology when it comes to managing supply chain operations is that it provides a mechanism whereby it is much easier, or at least it should be, to share information across a network or indeed an ecosystem.”
He said it was also essential that the data which flowed through such networks was accurate, and even more important to understand the context of that data. “What does it mean in connection with either a piece of inventory, an order or a shipment? When you have analytical tools which look at a supply chain network, understanding what that data means from the same point of view as the person who input that data is vital.”
Regarding the need for complete supply chain visibility, Lyon said that when such chains were in action, particularly if they were high-velocity operations, it was important to understand what was going on – or more importantly, be alerted when things were not going well.
In that context, he suggested that, most of the time, people thought that issue was covered if they had the ability to track a shipment with some kind of proactive alarm or alert if something did not arrive or arrived early. But that is not visibility, he said.
“Visibility enables you to drill down into the component parts of a shipment all the way back to the line items, where that is appropriate, even in some industries back to the point where the original order for raw materials was placed. Having accurate and timely visibility which can drill down through multiple tiers of the supply chain is vital,” he said.
“If you do have that capability to hand, it is extremely powerful if every other participant in the supply chain contributes to, and can benefit from, that because it improves the overall efficiency of the supply chain. Very few organizations are able to achieve that across their entire supply chain operation.”
Lyon said the white paper suggested that as large numbers of devices became attached to such networks, supply chain managers needed systems which can absorb and understand huge amounts of data but only highlight what was necessary and relevant to maintain operational performance.
“This requirement is why any solution should be a platform rather than a discrete functional system. Indeed, as a platform it should make it easier for all of the parties involved in the network to embrace and interact with it as the ecosystem evolves. It must be for the benefit of everyone rather than just the main player,” argued the white paper.
By Phil Hastings
Correspondent | London
