In my previous blogs, I wrote about the lack of transparency, visibility, and traceability in the automotive finished vehicle industry and others. After that, I wrote about ‘digitization’ and ‘digitalization’ in the context of the latter referring to more than just technical solutions. In this blog, I write about the need for ‘interoperability’ if you require a data-driven supply chain in support of ‘digitization’ and ‘digitalization’.
In general, ‘interoperability’ means ‘the ability of different computerized products or systems to readily connect and exchange information with one another.’ In end-to-end supply chain management, interoperability is more challenging or complicated than digitization or indeed digitalization. Increasingly, OEMs, ports/warehouses/facilities, and LSPs require collaboration through sharing timely and accurate data to manage their daily supply chains. In addition, they require such information and data in one place to support reporting, performance management, and ultimately the development of generative AI, and overall digitalization.
While the importance of end-to-end supply chain management has been more recognized than ever ‘in the board room’ and even to ordinary people as end customers, in today’s world most supply chain management is still being managed with a ‘spaghetti’ of peer-to-peer connections between systems in combination with MS-Excel spreadsheets, PDFs, email/phone communication, etc. This complicates the implementation of interoperability in an end-to-end supply chain.
To develop interoperability, OEMs, and LSPs have been using traditional point-to-point EDI interfaces in combination with MS-Excel file uploads, APIs, and other UI solutions. Creating and maintaining such point-to-point connectivity has been a huge burden for IT departments. This doesn’t apply internally only, but also externally for trading partners who often don’t have the same IT capacity as their OEM clients. This is especially the case when ongoing changes have to be made when replacing trading partners due to network changes, performance issues, RFP/RFQ decisions, etc.
In a global supply chain, not all parties possess sophisticated systems or will be able to communicate electronically. Or even when electronic or manual UIs are being accomplished, trading partners/suppliers may not always use the connectivity. These issues will cause gaps in the required interoperability.
To develop a fully operating interoperable solution, modern technology in combination with in-depth experience and expertise in global supply chain management are crucial.
In my next blog, I will address data control and ownership, followed by the final blog of this series, in which I will reflect on previous blogs and share my perspectives when it comes to the answers and solutions for the challenges we face in the logistics and supply chain industry.
We will post our blogs on Vinturas.com and on our Vinturas LinkedIn page.