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The modern supply chain is a complex dance, with information flowing between numerous functions and disparate systems. Yet, all too often, this choreography is hampered by fragmented data trapped in silos, impeding visibility and hindering efficiency. To achieve true unification in the supply chain, a key factor emerges: data standardization. I attended multiple sessions on supply chain data standards at this week’s ASTM International event, and the message was loud and clear: We need more adoption and global harmonization of data standards in logistics. (See ASTM Supply Chain.)
Despite advancements in unified supply chain platforms (see Ushering in convergence: Unified supply chain platforms are key in 2024), these systems remain data-hungry. Unfortunately, the current landscape is marred by a lack of standardized data formats and definitions. While industries like health care and finance have established robust data standards, logistics continues to struggle. This fragmentation of data and standards often leads to errors and inconsistencies, making reliable decision-making a challenge. The inability to seamlessly exchange data necessitates manual data entry, increasing the risk of errors and wasting valuable resources. Data silos also create communication barriers among stakeholders, hindering collaboration and optimization efforts.
Regulations around the world are increasingly pushing for standardization. The EU Supply Chain Law and Deforestation Act, along with the Securities and Exchange Commission’s environmental, social and governance rules in the U.S., highlights the growing emphasis on sustainability and traceability. These regulations, coupled with initiatives like the UN/CITRAL Negotiable Cargo Document, are driving the need for standardized data exchange across the entire supply chain.
The European Union has emerged as a leader in supply chain digitization, with initiatives like the Mandatory Disclosure Regulation and the General Data Protection Regulation, as well as collaborations with organizations like the International Chamber of Commerce and the U.N. CEFACT. By examining these successful pilots, we can learn valuable lessons about fostering collaboration and prioritizing competing standards development efforts.
Data standardization is not just a regulatory necessity. It is the cornerstone of a data-driven supply chain. As everyone strives to leverage AI and automation, standardized data becomes crucial for accurate decision-making, efficient information management and ultimately, unlocking the true potential of data. This potential ensures consistency and accuracy of the data, minimizing errors and reducing the need for costly data cleaning. Seamless data exchange fosters collaboration and efficient information flow across departments, organizations and even continents. Standardized data enables automation, freeing up human resources for more strategic activities and streamlining processes across the entire supply chain. It further facilitates regulatory compliance and allows for personalized customer experiences.
The future of supply chains lies in collaboration and transparency. To achieve this vision, we need to break down data silos and build bridges through standardization. Several questions remain to make this future a reality. How can we make it easier for participants to access, understand and adopt the relevant standards? How can industry organizations streamline their efforts and prioritize standards for timely development by recognized standards development organizations? And finally, how can we encourage widespread adoption and implementation of these standards across the entire supply chain ecosystem?
By fostering collaboration and leveraging the lessons from other industries, we can unlock the true potential of data, drive efficiency, and build a more sustainable and resilient supply chain for the future.
Look for more articles from me every week on FreightWaves.com.
About the author
Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.
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