Supply chains cannot function without collaboration but traditional one-to-one relationships are both expensive to manage and potentially restrictive, especially at times of disruption and escalating costs. Furthermore, over the past decade, organisations have invested heavily in digitisation to achieve efficient, automated and streamlined processes – yet extending internal improvements to include partners is complex and challenging. When just a single example of inconsistency in mapping data between two organisations can lead to a mismatch in routing that adds delay, cost and conflict to the relationship, how can businesses confidently reach out beyond one-to-one relationships and embrace a wider collaborative model?
Yet if organisations are to drive new efficiencies, reduce costs, improve sustainability performance and transform employee well-being, it is imperative to move supply chain collaboration beyond the limitations of individual relationships. From intelligence driven route optimisation to automated execution and the use of powerful analytics to proactively respond to challenges, with the right approach, organisations can achieve so much more when working together.
Christopher Keating, Senior Vice President at Transporeon and Christopher Quin, Vice President of Sales at Trimble discuss the power of consistent data combined with smart collaborative platform technology to achieve effective, multi-organisation collaboration across the supply chain.
Supply Chain Collaboration Objective
Supply chain disruptions continue unabated. While the problems created by Far East disruption ease, inflationary pressures have created an unprecedented increase in transportation costs. The Russia-Ukraine war continues to undermine confidence, especially throughout Europe. Add in staff shortages, as well as industrial action, and it has become extremely difficult for organisations to plan efficiently and forecast accurately.
The reality of course, is that supply chains are constantly subject to upheaval events. From financial crises to weather, supplier failure to political change, any organisation involved in logistics requires the ability both to respond to immediate problems and create a strategy to mitigate longer term challenges. Certainly, the evolution in logistics technology has delivered huge strides over the past decade. From vehicle telematics to delivery route optimisation, automated unloading/loading to warehouse management, organisations throughout the logistics and supply chain industry have leveraged automation and visibility to drive new levels of cost effectiveness and efficiency.
But with on-going geopolitical uncertainty and a slowing of global demand, the industry faces a new set of operational challenges. Add in the need to also eliminate waste and meet increasingly regulatory driven carbon targets, businesses recognise the importance of working closely with partners. An October 2022 Indago survey found that nearly all respondents either “Strongly Agreed” (71%) or “Agreed” (25%) that for organisations to address supply chain challenges more effectively, they need to collaborate more with their suppliers, customers, logistics service providers and other trading partners.
Data Inconsistency Leads to Conflict
There is a huge gap, however, between the vision of supply chain collaboration and the reality on the ground – and one of the biggest problems is the lack of trusted, consistent and precise data. Just consider, for example, what happens when a manufacturer and a carrier are using different mapping data. Both organisations will have invested heavily in digital technologies including transport management to ensure routes are optimised, based on precise time and distance calculations. Yet when the carrier’s mapping opts for a different route to the one outlined in the manufacturer’s systems, there can be a huge discrepancy in cost, delivery timing, even carbon emissions.
Indeed, even the most basic inconsistencies can have serious ramifications. What happens to the delivery schedule when a consumer-grade mapping solution, for example, defaults to a retail store’s literal centre rather than the loading/ unloading bay defined by a business-grade alternative? Organisations need to consider not only the inevitable delay while the truck is rerouted but also the impact on driver morale – a key concern given the endemic shortage.
Consistent, precise mapping data is a clearly vital component of successful supply chain collaboration. Unless every organisation is working to the same, precise geo-positioning, the assumptions and calculations that underpin streamlined, automated processes will be incorrect, leading to inevitable conflict.
Platform Foundation Wider Collaboration
While organisations are clearly committed to creating a far more collaborative supply chain model, it is simply not achievable when every business is reliant upon a different data set. Yet how often are the data issues only revealed after a hugely complex and time-consuming interoperability project, typically involving multiple technology providers?
The concept of extending these one-to-one collaborative relationships to embrace the wider supply chain is simply too complex using traditional interoperability models. Yet organisations throughout the supply chain recognise the essential value, indeed imperative, of achieving far more efficient, effective and flexible collaboration. This deadlock can only be overcome with a different approach. The use of platform technology not only provides every organisation with a consistent data foundation but also fast-tracks the broader collaboration model.
A single connection to the platform provides organisations with an immediate connection to all their current and potential trading partners. With full and trusted visibility of every stage of the process, organisations can rapidly expand the collaborative mindset. For example, with confidence that every carrier will have access to the same, precise mapping data, an organisation can be far more flexible – even adding spot procurement deals to manage spikes in demand or a problem with an existing provider.
More than Marginal Gains
Overcoming the costs and delays associated with data conflict will reap significant financial and operational benefits. Improving the consistency of delivery operations, for example, will reduce the time spent waiting to unload, with the associated carbon savings and improvements to driver morale. Greater delivery accuracy will enable intelligent utilisation of scarce warehouse resources. With consistent routing and mapping data, organisations can confidently commit to delivery times, reinforcing customer satisfaction and loyalty and improving retention.
These marginal gains, while considerable, are just the start. An effective collaborative model enables new levels of flexibility. When inevitable supply chain disruptions arise, organisations can leverage trusted information across thousands of supply chain providers to access the resources required on demand.
Organisations can also become far more proactive to meet evolving business objectives. For example, different route optimisation concepts can be explored, comparing routes for sustainability, cost or timeliness. Access to a new breadth of possible supply chain collaborators introduces new ways to add efficiency and meet sustainability goals, for example by adding backhauls to reduce empty miles.
Successful, cross supply chain collaboration is the only way to successfully mitigate the inevitable crises that occur – in whatever form. From real-time freight visibility and transportation management to automated execution and powerful analytics, organisations need to evolve beyond the limitations of one-to-one interaction and embrace a powerful community of thousands of business partners.
But this collaboration must be underpinned by confidence in the shared information resource. From trusted, consistent mapping onwards, the use of a neutral technology platform is now vital to level the playing field. It is the foundation to realise the power of many, working together effectively to deliver the next level in cost savings, sustainability goals and employee well-being.