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— Blog

Centralised data critical for well-functioning supply chains

September 16, 2014
By: Bernard Geoghegan, Managing Director, EMEA and Asia Pacific

Supply chains are the kinds of things most people often don’t notice until something goes wrong.

Whether it’s bare shelves in a supermarket or delayed spare parts for a piece of vital machinery, glitches can become anything from mildly annoying to financially disastrous.

The importance of supply chains is particularly acute in the Asia-Pacific region where rapid population growth requires the importation of large volumes of goods from around the world. At the same time, the region’s massive manufacturing sector needs to get its products out to global markets.

Keeping these complex, global supply chains operating efficiently is no easy task. Most require the movement of goods between multiple locations using different modes of transportation. Many involve the close integration of suppliers, manufacturers, distributors and retailers.

According to analyst firm Gartner, examples of companies with leading-edge supply chains include Apple, McDonalds and Amazon.com. These companies topped the rankings in Gartner’s recently released annual Supply Chain Top 25 report for 2014. Others at the top of the list included Unilever, P&G and Samsung.

Such companies understand the value of data when it comes to designing and operating a successful global supply chain. They start by focusing on customer requirements and then developing the type of supply chain that’s needed to meet them.

At the heart of every supply chain is data. Generated by the tracking and monitoring of items as they move through the system, this data is critical to efficient operation. If supplies are delayed or customer demands change, being able to query this data ensures maximum efficiency can be maintained.

Naturally, the larger and more complex the supply chain, the more challenging this analysis becomes. Sensors on everything from trucks and trains to pallets and cartons can provide information on shipment locations and delivery delays in real time.

The challenges will become even greater with the rise of the Internet of Things (IoT) and the resulting Machine-to-Machine (M2M) communications. Rather than supply chains ending in a retail store or a customer’s home, they will extend to places such as vending machines and automated storefronts.

A new report completed by research firm Ovum and released by Vodafone, estimates that the M2M market in Australia alone will be worth $A530 million by 2019. Sectors in which it will be particularly apparent will be asset management and supply chains. Extrapolate this forecast across the region and the numbers become even more impressive.

As a result, sophisticated analytical software will be required that can examine various movement scenarios and produce recommendations for changes as required. Leaving management to humans will simply not be an option.

To allow this kind of analysis, data collected from an organisation’s operations should be centralised in secure data centres. Constantly updated, this data store becomes a company’s ‘eyes and ears’ for its entire supply chain operation.

For larger companies, creating this central data store will require aggregating data from various country-specific or regional stores. While having data in multiple locations may have worked in the past, as supply chains increase in complexity and required performance, a centralised data store becomes essential.