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It’s 2018, Supply Chain Management Software From 2008 Won’t Cut It

Ten years ago, EDI was real-time. Not now.

For more than a decade, supply chain professionals have used sophisticated software and hardware to manage inventory levels, optimize labor and reduce transportation costs yet all these systems use a technology that is 50 years old that was not designed for use with any of these systems.

EDI (short for Electronic Data Interchange) was designed in 1968 and originally intended to replace paper purchase and invoice documents in a standard electronic format. Since EDI was adopted worldwide, it has also been used to track delivery milestones of finished manufactured goods from the plant to the customer. What you probably don’t know is that when UPS, FedEx, and Amazon give tracking numbers to customers, they are using information from EDI messages. While it is perceived as “real-time” information, it is not using real-time data.

If you take a flight from Los Angeles to New York and the flight begins with a three-hour delay at LAX, are you on your way? Would you want your family to meet you at the airport in New York at the planned arrival time? Of course not, that three-hour delay would make for a cranky homecoming. But if you were tracked like a shipment with EDI messages, there would be a notification to your family that you had departed as soon as you boarded the plane because boarding the plane is the milestone that EDI would track.

Today, sophisticated supply chain software doesn’t need to rely on data from 50-year-old repurposed technology. Sensors in phones, electronic logging devices (ELDs), and location and environmental sensors communicate over mobile networks and satellites to deliver real-time, live streaming information. Instead of an EDI message that a shipment has been placed on a ship, and then, that it has arrived in a warehouse on the other side of the earth three weeks later (or not), you can compare the EDI message with a ping from a sensor every minute, hour or day to tell you where the shipment is in transit at that moment. Better and more reliable data from sensors not only provides information in real time but gives the receiver, human or machine, information to determine appropriate action. Better and more reliable data also enhances WMS, TMS and ERP systems with timely ETAs and analytics planning systems with accurate historical data on which to make predictions.

Several headlines in 2017 indicated that consumers and business customers now expect improved delivery windows and more responsive suppliers. For example, some major retailers are making new on-time, in-full (OTIF) demands of their suppliers – Walmart implemented new, shorter OTIF delivery windows. And Amazon acquired Whole Foods—sending a wakeup call to the grocery industry about how a top analytics and logistics company could compete in their industry.

Government and military supply chains are no different. In fact, their need for an agile supply chain with ETAs they can trust can be more acute. Mission success could be tied to equipment or parts that are needed. Supply chain professionals need to use the best tools and the best data to meet customer expectations. 2018 will be the beginning of a huge growing wave of manufacturers using sensors delivering real-time, accurate and objective data. Manufacturers that want to remain competitive will be fast followers.