In this time of unprecedented challenge, many organizations are trying to figure out how to survive. It’s no surprise that like any difficult situation there are valuable lessons to be learned. One lesson of the past few months is that disruption has few boundaries and when the unforeseen hits, our supply chains are vulnerable. Today’s global supply chains are complex combinations of manufacturers, transportation and government regulation.
Studies show that the average container of goods that moves from one country to another is touched by 27 different entities, requires 36 documents and 240 exchanges of information. It’s no wonder then that on average, those same shipments spend over 450 hours idle during their voyage. Another study done with a major international consumer goods client, showed that due to the document and movement complexity, approximately 40 percent of freight invoices contained an error.
Organizations are reacting to drastic shocks in their supply chains in different ways. Some are pressuring suppliers to integrate to common systems in order to gain better visibility of goods. If you operate a supply chain, perhaps you are outsourcing this responsibility to a third-party who predominantly leverages 40-year old technology like EDI to integrate and communicate information.
Others have gone “all in” on digital. If this sounds like you, perhaps you’re building a specialized network to create more granular insights and move information with greater speed. With advanced data analysis and even AI, some organizations have become incredibly sophisticated in their ability to understand what’s going on and where their goods are. However, research shows that building your own network is an incredibly expensive proposition and partner compliance is challenging.
The problem is, all of these approaches are trying to solve the problem for one organization, or one part of a much bigger system and it is really a multi-organization problem. A massive, complex and dynamic multi-organization.
Let’s bring this to light; the largest ships are now carrying up to 24,000 containers and each container can hold cargo interests of multiple parties. It’s unreasonable today to expect the operator of such a vessel to connect seamlessly to tens of thousands of different systems and to do it with each party in unique ways. That’s a recipe for breakage and miscommunication.
At IBM, we believe a better way to solve this challenge is to build an industry platform to solve your problem along with many others. We’re talking about a hub built on modern scalable cloud-based services and architecture. Like the internet, companies can connect once and share to many. Unlike the internet, it needs to be permissioned and secure enough that competitors can participate together and feel confident that their data will remain both their own and properly secured.
Such a platform can become the basis for creating a self-correcting supply chain that deploys exponential technologies like AI, blockchain and IoT to provide supply chain transparency that then allows organizations to create the resiliency necessary to deal with disruptions — from inclement weather to supply shortages, but also for the unprecedented global crisis.
This is why we have partnered with Maersk and now more than 175 organizations around the world to build and scale TradeLens. TradeLens is a specialized and scalable platform designed to bring a common and versatile system for data publishing and sharing. TradeLens is removing the silos so you can build a resilient supply chain required for success in your market.
Through a series of TradeLens pilots and customer implementations, customers are starting to see that some very important efficiency gains are being realized. Some customers have been utilizing improved data fluidity to reduce the time of direct import accounts payable dispute resolution, in some cases cutting that time by 90 percent.
Because of the number of different entities involved in moving cargo from one part of the world to another, there is inherent complexity which causes costly inefficiency and amplifies challenges during times of serious disruption.
Current systems for communicating and maintaining cargo visibility are neither sufficient for building nor maintaining the intelligence that complex supply chains need today. A better way to digitalize is not to build your own network but rather to embrace a platform model such as TradeLens.
Please don’t hesitate to connect with me on LinkedIn. I’d love to learn more about the business role your supply chain plays to make it all happen.