Supply Chain Visibility beyond EDI’s
Supply chain visibility has become primary as businesses move from response to recovery since the onset of the pandemic. The disruptions supply chains faced over the past two years have propelled enterprises to re-evaluate their supply chain visibility solutions. Many businesses turned to IT to customize existing core systems or invest in expensive point software solutions for advanced visibility. Some also scrambled to manage workflows through spreadsheets and e-mail to navigate the unprecedented challenges of current times.
According to Gartner, only 21% of industry professionals have no difficulty with supply chain visibility. The remaining players struggle with gaining real-time and accurate data insights to help decision-making. Companies are still constrained by unresponsive, inflexible, or siloed systems and lack visibility into supplier data. As the global pandemic atmosphere clears, many companies acknowledge that having visibility throughout the entire supply chain is an urgent requirement.
What Is Supply Chain Visibility?
Supply chain visibility does not merely provide insight into your internal processes but enables a connected flow of data from manufacturers to the final delivery of products readily accessible when needed. Supply chain visibility provides the real-time location and status of your materials or shipments throughout the supply chain. This powerful information empowers logistics professionals to know in an instant where their trucks, trailers, ships, and containers are and provides data insights that boost your supply chain resilience. As companies build their supply chain visibility attributes for the long-term, they face the following challenges:
- Adjusting quickly to unanticipated changes
- Delivering on time
- Inability to take fast or corrective action
- Outside forces that threaten the supply chain
- Siloed systems that do not share data
How Do You Achieve Supply Chain Visibility in SAP Transportation Management (SAP TM)?
While SAP TM allowed companies to optimize, plan, procure, execute, and settle their freight, it relied on SAP Event Management (SAP EM) to achieve visibility into its freight movement. SAP EM had to connect with carriers via EDI to receive event notifications and translate them into usable data for supply chain leaders.
In recent years, companies like project44 (iPaaS), FourKites (SaaS), etc. have added a new dimension to real-time Supply Chain Visibility. These companies provide API packages that allow SAP TM to integrate with their tracking platforms. This is a considerable shift from the traditional EDI-based communication with individual carriers and is a game changer as a first step towards modernizing a company’s Supply Chain Visibility.
EDI Vs API
Let us compare what are the key wins when we connect to a visibility provider directly using their API packages over EDI?
Scalability: Despite the standard protocols, the document types and business rules differ from one partner to another. Compare this to a single API standardizing communication to all your partners within its platform.
Bad Data: Many studies show that bad data/incompliance from partners is the leading problem that affects B2B transactions. As the data volume grows, the error scope will only increase. This can be eliminated or significantly reduced when we receive the data from standardized APIs.
Latency: Real-time is the need of the hour. Gone are the days of generating flat files, storing them on FTP servers, waiting for jobs to pick them up and transfer them to partners, waiting for a response, and waiting for a job to process the response, only to realize that you missed a field that the partner expects. APIs transform the way you communicate. Send a Request, get a Response – DONE!
Transparency: Ensuring visibility and transparency at every level of the supply chain process can be difficult to manage. As the supply chain processes get more complex, the degree of difficulty will only increase. Maintaining transparent communication with partners and customers can help to optimize operations and support one another. These APIs allow companies to share visibility with their supply chain partners through platforms that make things transparent like never before.
Interoperability: Though EDI has been around for over a couple of decades now, many businesses still have not embraced this technology. And with those using EDI, there are chances that your trading partner uses a different EDI format. With so many different EDI formats in use, it is essential to have a solution that translates information into a format your system can understand. Doing business with trading partners who have not upgraded to EDI can be quite challenging.
Cost: Developing, maintaining, upgrading, onboarding, troubleshooting, and fixing; all these activities are part and parcel of using EDI in today’s world. All of them have a cost element associated with them. Using direct APIs is just a much cleaner and more straightforward option.
In conclusion, API integrations save time and money, and from a development standpoint, the system architecture is easy to customize and scale with minimal maintenance. The automation provided results in increased profits, decreased administrative expenses, and enhanced customer satisfaction for all parties involved (shippers, 3PLs, and carriers).
Freight APIs are just the foundation. Their capabilities will generate limitless opportunities for supply chains to run dynamic, transparent, and proactive operations.
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Thank you for reading!