If the pandemic and other global black swan events in the last few years have taught us one thing, it is that supply chains are highly vulnerable to external risks. Such risks lead to disruptions that come along with all sorts of problems for supply chains. However, businesses are not standing idly by. They look to adapt operations to tackle these supply chain risks, turning to seamless system integration for gaining more control over the supply chain, even in areas where they historically have no control over.
Through system integration, these businesses can connect all the data sources and systems used across the supply chain under one roof, enhancing end-to-end visibility, full transparency, streamlined processes, and improved decision-making across the entire supply chain. This way, these businesses can spot potential bottlenecks far away in the supply chain, especially those with devastating ripple effects that can be felt across the entire operation. A typical example of this is when supply of vital raw materials gets disrupted, leading to ripple effects all through downstream operations, delaying production schedules.
Understanding the Core Systems in Logistics Modern logistics processes draw tremendously from technological innovation, leveraging advanced solutions to optimize operations and improve throughput. Although these tech stacks vary depending on the aspect of the operation in question, there are three core systems that the average logistics operation relies on.
1. Transport Management System (TMS) The TMS gives the logistics team total control over the entire transportation process. With the TMS, businesses can better coordinate operations, from selecting and scheduling carriers to route optimization and end-to-end tracking. The transport process is one of the essential aspects of logistics, and having that under control is a great first step to enhancing operational productivity.
Businesses have real-time visibility into the transport process through the Transport Management System. This ensures they can identify potential risks and proactively mitigate them. Better control across the entire process also allows for better cargo handling.
2. Warehouse Management System (WMS) Although logistics is the critical pillar to the success of supply chain management, it will struggle when the warehouse process is lacking or poorly optimized. That is why the WMS is a critical system for modern supply chain operations.
Through the WMS, businesses can enhance the warehouse's workflow, streamline the inflow and outflow of goods, ensure adequate space, and effectively manage the inventory management process. The WMS also impacts order fulfillment because it allows the supply chain to manage demands and dictates the speed at which these supply chains can meet the demands. Integrating the WMS can improve accuracy, reduce errors, and optimize warehouse processes.
3. Enterprise Resource Planning (ERP) ERP goes beyond the supply chain and entails bringing the entire business into its sphere. This is necessary because although the supply chain is critical to the success of a business, other aspects of operations, such as sales, finance, and customer relationships, will impact its success.
For instance, no matter how good the supply chain is, if there are no customers to sell to, it won’t matter. Again, no matter how good the supply chain is, if it is making losses on sourcing, even if they get to the customer on time, it won't matter much. With the ERP, the business can paint a better picture of its operations by bringing everything under one roof, allowing for more harmony and improved business output.
Data Synchronization and Interoperability Standards Data is important and necessary, but what happens when it is inaccurate or too late? This is why data synchronization is critical to businesses. It allows for accurate and timely data exchange between systems, increasing stakeholders' productivity across supply chain operations.
However, there are challenges with data synchronization that make it challenging for businesses to leverage it when optimizing their supply chain operations. These challenges include data formats and update frequencies, especially when dealing with supplier data across regions and time differences. Imagine a manufacturer, logistics provider, and retailer tracking shipments using different systems. It will slow down the process and make it more difficult for these businesses and their supply chains to operate the integrated systems seamlessly.
That is why interoperability standards are essential. It is the cornerstone of seamless data exchange, and there are two key players businesses can leverage here:
EDI (Electronic Data Interchange): EDI is a long-standing standard that enables the electronic exchange of structured business documents, such as purchase orders, invoices, and shipping notices, between different companies' systems. Through EDI, more businesses can eliminate the need for manual data entry, reducing errors and accelerating processes.
API (Application Programming Interface): Stakeholders in the supply chain are not the only ones who communicate. Systems do as well, and that is why API is vital. APIs are modern and flexible tools that allow different software applications to interact and share data in real-time. They act as intermediaries, enabling seamless communication between systems, regardless of their underlying technology.
The Role of APIs in Facilitating Integration The shipping API is an intermediary between different software, regardless of background or programming language. It is through the API that this software can communicate with each other and share data seamlessly.
1. Real-Time Data Exchange In shipping operations, supply chains can leverage APIs to allow for instant information transfer between various core systems, such as transportation management systems (TMS), warehouse management systems (WMS), and enterprise resource planning (ERP). Through these, stakeholders always have updated information about shipment status, inventory levels, and delivery schedules.
2. Process Automation Automating processes allows for more efficiency and throughput in the supply chain. And APIs can be programmed through algorithms to trigger certain actions and communications based on predefined conditions or events. It enhances the ability of the business to better manage repetitive and time-consuming tasks.
3. Creating an Agile and Responsive Supply Chain Because APIs bring together several relevant systems, it can leverage them to provide a comprehensive view of the supply chain. This way, businesses can make better decisions across the supply chain and proactively react to mitigate potential risks.
Strategies for Achieving a Unified System Landscape In the context of supply chain management, a unified system landscape refers to the integration of various software applications and the breaking down of data silos to allow for seamless data exchange and collaboration between all stakeholders.
Why is it important?
1. Centralized Data The system consolidates data from various sources to create a single source of truth, providing accurate, real-time information for all stakeholders.
2. Streamlined Workflows It automates workflows and accelerates processes by integrating different systems to save time and resources and reduce the risk of errors.
3. Enhanced Visibility A unified system landscape provides end-to-end visibility across the entire supply chain, allowing businesses to track inventory levels, monitor shipments, anticipate delays, and proactively address issues, improving customer satisfaction and reducing freight costs .
Best Practices For System Integration Projects Certain practices allow for efficient system integration, and some of them are:
Conduct a thorough needs assessment to identify pain points and desired outcomes. Choose compatible systems and platforms. Develop a clear implementation plan and timeline. Test the integrated system thoroughly before full deployment. Provide adequate training and support to users. Proactive Risk Management and Smooth Operations With Freightify Freightify empowers freight forwarding businesses to proactively manage risks and ensure smooth operations by enabling them to handle most tasks through one platform and API. This includes real-time visibility and tracking, exception management alerts, centralized document management, carrier performance analytics, and financial risk management tools.Â
Through Freightify's API, these businesses can facilitate collaboration, offer customizable workflows, and provide data-driven insights that allow them to anticipate and address potential challenges. This can improve efficiency, customer satisfaction, and overall business success.
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