Smart, centralized insights shape a modern global supply chain

supply chain

This article by Saif Rivers and Ian Watson-Jones first appeared in IBM’s blockchain blog: Blockchain Pulse

The modern global supply chain can be the source of endless insight into the production, sourcing, procurement, purchasing, inventory and delivery of goods and services. But data must flow smoothly between B2B networks in a supply chain so that invested parties can quickly act on information that will improve the quality, cost or delivery.

Organizations have long relied on the electronic data interchange (EDI) standard to swap critical supply chain documents — and they’ll continue to rely on it, because the technology is mature and low-cost.

Supply Chain insightsBut to effectively manage an increasingly complex multiparty supply chain ecosystem that connects disparate systems, processes and tools, companies should embrace the future and turn to blockchain. Harnessing the many bits of supply chain information to create a cohesive, transparent flow of data, blockchain enhances collaboration between the many partners of a supply chain and ultimately increases customer satisfaction.

Organizations that go a step further and integrate AI into their supply chains will also benefit from insights that proactively spot potential manufacturing disruptions, inventory shortages and other problems. Cohesion and insight are just what organizations need if they want to easily navigate the known and unknown complications of a global supply chain.

A fruitful tech merger

Other systems have come along since its creation nearly five decades ago, but EDI still has tremendous value to companies that want to have frictionless communications with supply chain partners. Half of all respondents in a Computer Generated Solutions survey said they considered EDI critical to their omnichannel operations, while the other half classified it as at least “somewhat important.”

EDI remains a go-to resource for peer-to-peer supply chain connections, but it can do only so much. It can’t handle advanced digital input, such as data from IoT sensors or notifications about a change in the delivery of parts. While the data exchanged within an EDI is a critical part of the supply chain, it’s not the only element in it. The modern global supply chain needs to reflect the totality and continuity of every digital business process.

The next step in supply chain evolution integrates the many workflows that touch the process, merging EDI data in addition to the gargantuan amount of information from technologies such as IoT sensors and application programming interfaces (APIs). That next step is blockchain. With blockchain, a supply chain can move beyond the limitations of a peer-to-peer network, or even a one-source-to-many network, and transform into a transparent network that effortlessly connects many to many. Blockchain creates a level of visibility between every partner on a supply chain and effectively holds them all accountable for their end of a production bargain.

EDI can still serve as the core medium for document exchange, but the data from that trusted technology can offer more value when it’s fed into a blockchain-powered B2B network. There, a shared version of true data — collected from EDI, IoT and APIs — builds upon the limited exchange found on EDI and enables every partner to collaborate on production and delivery.

For example, data from IoT sensors can help companies gauge the creation and delivery of parts across the entire supply chain. And data from APIs that record sales and other processes can support decisions, such as one to quickly scale up or back production because the data reveals accurate in-the-moment customer demand.

All this data can be run through an automated AI-powered tool to add predictions and recommendations that enhance how companies interact with their supply chain partners.

A smart, connected supply chain

Connectivity — a singular view of data and AI — will be critical for retailers, manufacturers and other global companies that need knowledge and flexibility as they aim to seamlessly deliver products and services. It’s no longer enough to know when materials will arrive from a supplier. Companies want insight into their suppliers’ manufacturing processes and inventories to ensure the timely delivery of their products.

IoT tracking, for instance, lets companies see a manufacturing vendor’s chain of creation and delivery so they can plan their own manufacturing accordingly. This visibility enables a manufacturer to turn to its backup plan when it recognizes a vendor needs too much time to create and ship a critical part, and to ramp up its processes to acquire a part that will arrive in time.

As another example, if a partner can’t deliver a component because of noncompliance, an AI-driven recommendation engine can find a replacement source somewhere else along the supply chain. Whether partially or fully automated, companies now expect this level of insight.

An automated, AI-driven and blockchain-supported supply chain doesn’t help just the primary stakeholder; the entire ecosystem benefits from the shared pool of insights. Guided by data, stakeholders are incentivized to collaborate to improve processes and satisfy consumers’ high expectations. Retailers can identify the origins of its foodstuffs and demonstrate that they are produced following environmentally sound practices, and manufacturers can prove its products were made under fair labor practices.

Supply chains are built on stacked networks, and the sprawl of data from those networks inform the many processes behind each step in the supply chain. Sprawl can be disruptive when sources can’t connect. When data is centralized, automated and enhanced, partners in the supply chain smartly create together.

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