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Scac systems fragmentation

What it takes to Manage a Supply Chain

Two Dimensions

  • Multiple Levels of Functionality –> Layers
  • Scopes

How systems vendors have responded

  • Fragmentation, banana slide (w/o WES)
  • Why is it like this? How did we get here?
    • Very complex domains: Intersection between Physical and Information Worlds
    • Multiple Technologies
    • Siloed, Top-Down planning paradigm (will come back to that)
    • In SC, unlike in manufacturing there was less pressure to reduce inventory levels

What is happening now

  • E-commerce, JIT/Lean
  • Multi-Enterprise Supply Chains/Networks (Jarillo?)

What does it look like to execute with the current systems

  • Collect-Forecast-Transmit-Batch-Plan-…
  • Bullwhip effect
  • This is called Push operations because it “pushes” products downstream in the supply chain. It is also a “fire and forget” top-down approach
    • Reasonable when feedback information is not available or too expensive
    • It has terrible control properties where an error in measurement gets multiplied by 20-100x in delays and late shipments.

So, What to do?

  • Operations need to be “reactive” to conditions on the ground.
  • To do that you need “real-time” signals to inform decision making
  • Decision making needs to be agile and local but aligned with global goals and priorities
  • ==> Switch:
    • From “Vertical Tasks” to “Horizontal Signals”
    • From Pushing a plan to being Pulled by Demand
    • Waveless or continuous fulfillment instead of waved/batched
  • Some companies & solutions are already well underway
    • Amazon
    • Fortna
    • Not new in manufacturing (JIT supply chains like Toyota pioneered)
  • But confined to “single company” scope

Extending it to Multi-Enterprise Networks

More trouble ahead:

  • Public/Private information
  • Outdated & Broken data exchange standards (EDI)
  • Data Quality
  • Patchwork of 3rd parties
  • Emergence of WES (banana + WES)

Modern WES vendors:

  • GreyOrange

Technology Enabled Providers

  • Shipbob, Shipmonk, …
  • Convoy, Uber Freight, Cargomatic

Networked solutions

  • Banyan, Cargomatic

Emerging Standards: DCSA

Adoption of technology

  • Flexible Automation (easier to integrate in pull operations, already sensor rich)
  • Cloud systems (ease of interconnection) & Modern API’s
  • AI Applications
    • De-noise data
    • “Upscale” protocols from human materials to machine-readable
    • Speed of interconnection/integration of systems