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Your Collaborative Supply Chain: The Value of Interoperability

Competition is seen as the driving force behind expansive growth, booming markets and limitless innovation. But as a new generation of leadership works to bridge the gap between traditional and digital enterprise models, we are now beginning to recognize that the key to setting your enterprise apart will be your ability to work together digitally with trading partners. In this article, we look at common pain points for digital transformation, and how proper interoperability not only alleviates them, but can bring truly powerful benefits to any organization.

Solving System Incompatibility

It is possible that the most common pain point throughout supply chain management is system incompatibility. In the competitive world of conflicting business goals, we are bound to see different management approaches. But when we consider the amount of increasingly misaligned methodologies and divergent approaches today, incompatible technologies become an understandable, even predictable reality. Picture this over multiple sources with thousands of data points for each company trying to interface, and the need for cooperative systems and interoperability is clear.

The solution to this all-too-common scenario can also seem elusive since the perceived design costs of a seamless network tend to act as a deterrent. But if the goal of interoperability is for networks to utilize and exchange information effectively, then what we need is multi-party optimization that can serve a multitude of functions and be deployed across multiple enterprises. Imagine complete system compatibility between buyers, suppliers and carriers, all connected through universal business documents that fully encompass the multitude of formats from any type of ERP or supply chain information environment.

Clearing the Way for More Transparency

So where exactly is our shipment? When did it leave port? What time will it arrive at the warehouse? We would like to have all these answers at our fingertips, but many times they're hard to track down, or simply not available. If our jobs and our ability to anticipate and meet the delivery deadlines of our customers depend so heavily on time and place, then a lapse in this critical data can have major repercussions. With so many legacy business models still based on closed systems and data capture rather than open ecosystems, we are likely to keep running into these issues.

This is why it is imperative for us to seek collaborative solutions. If we all work to adopt systems that are both willing and able to safely share data across multiple partner networks, we could pull ourselves out of the dark, and into a more transparent and connected future. Interoperability can get us there—bringing existing systems, trading partners and enterprises together in a way that helps all parties involved.

So what does this look like? It looks like platforms built to seamlessly translate and transmit millions of transaction variables in real time—converting units of measure and time zones, ensuring regulatory compliance and documentation, sales and shipping orders between parties—all complete with quality-controlled documentation.

Security and Safety with Shared Information

As we continue our pursuit for more secure systems, a new generation of leadership is developing integrated solutions that leverage blockchain and other decentralized networks. We are mindful in considering the amount of data generated by our closed systems—understanding that the centralized nature of so many networks today bends towards the mere duplication and delivery of data over truly secure access to it.

The truth is, interoperability done correctly does not weaken security. In fact, the unnecessary duplication of our centralized data throughout multiple points of contact can already make information systems easy targets. Rather, proper interoperability is designed to take place within a safe, distributed architecture—allowing for secure access to data without the need to replicate it and send it away. Now all partners can see what they need to, without leaving a trail of data artifacts in the wake of a transaction.

Cooperative Supply Chains and Competitive Advantage

Every business has its own unique needs and goals—that is not going to change. But when we look at more collaborative means for managing across the supply chain, this individuality makes it difficult to implement standards or consistency. Even when we look at tracking or transportation modes, there is a lack of consistency between parties—all of which could greatly benefit from interoperability.

As we work towards getting our digital supply chains on the same page, we will begin to see many of these benefits come to fruition:

  • Lower hard costs
  • Reduced business risk
  • Optimized capital
  • Smaller SG&A expenses
  • Improved service levels
  • Stronger relationships
  • Boosted reputations

So while it is difficult to switch from the default mode of nearly every contemporary enterprise model, the takeaway tends to remain the same: when it comes to building connections, collaboration is now truly the only way to compete effectively.