Price Compression is a financial term where the future prospect of an asset is priced higher than its expected value; the price is ‘compressed’ and includes more ‘value’ than would ordinarily be projected for the time period. In short, it’s a linear equation and this is a math free zone so don’t stop reading.

Market Compression is different from Price Compression. Markets behave in a nonlinear manner in comparison prices. Market Compression is what happens to Jello when exposed to children. When a small child interacts with Jello, they give it a good squeeze, upon which Jello escapes the child’s grasp. It’s nonlinear and unpredictable, just like Jello, and we remain math-free, mission accomplished.

We’ve all seen extreme examples of price compression in our own neighborhoods in the recent housing market where housing prices have exceeded expectations, growing more rapidly than could have been anticipated. We have also seen price compression in historically significant cycles of rapid change such as the mortgage bubble or the ‘dotcom’ era.

In 2023, the transportation industry saw several bankruptcies among carriers, indicating financial instability and possibly overcapacity issues, the result of which is a leading cause of market compression. These developments suggest a landscape filled with capacity issues, financial challenges, even integrity issues within the transportation industry as 2023 came to a close, likely influencing all manner of business strategies moving forward.

While all markets grow and shrink, service markets like transportation react differently under compression. What makes market compression unsettling is an increase in rate of entrants and dropouts within a relatively short period creating yet more unpredictability and that’s where we find ourselves today in an unsettling period that began with Yellow on August 6, 2023.

Thoughts on Yellow Corporation Story

Yellow Corporation and certain of its affiliates and partners filed voluntary petitions under Chapter 11 and it wasn’t that no one saw it coming. Yellow Freight’s issues were widely reported for months, the company has had increasing challenges for years, even restructuring twice in the past two decades. Yellow Freight faced challenges and controversies over the years from labor disputes to financial struggles to operational and performance issues. What few saw was Yellow Freight’s complete exit once it had become clear the bailouts were not going to help the then #3 LTL Carrier in North America.

While Yellow Freight’s filing included several subsidiaries, Yellow Freight, USF Holland, and despite Roadway Express ceasing operations in 2009 Roadway was still listed as one of the affiliates in the filing. What does all this mean? It means that not only will clients continue to realign their freight relationships, but freight service providers will similarly continue to realign freight relationships for the foreseeable future. Companies like General Motors, Ford and Stellantis alongside companies like Walmart and Home Depot will all be scrambling for capacity among the top 100 LTL Carriers all of whom just moved closer to #1.

Scrambling for Capacity

Scrambling for Capacity in 2024 will extend well beyond Q1 and into Q2 for shippers and markets where once again we expect to find ourselves face-to-face with yet another round of supply chain disruption. What’s unique about Market Compression is at the same time there are shippers shopping capacity the market appears to have excess capacity evidenced by dropping rates.

Unlike some market dynamics like cost and demand that tend to have a linear relationship, market compression is non-linear. Reactions to these market circumstances encourage a three-dimensional compression such that the outward expression of the market is often unpredictable and where we would expect new leaders to emerge, and some to exit. This all takes time, and it’s beginning to take place.

Food for Thought

"What makes market compression so interesting is the simultaneous impact on shippers and markets. Reaction by shippers and markets to market compression is not universal by any means, in fact rampant unpredictability seems to be the norm."

What makes market compression so interesting is the simultaneous impact on shippers and markets. Reaction by shippers and markets to market compression is not universal by any means, in fact rampant unpredictability seems to be the norm. Some of reactions expressed by both shipper and carrier companies have been wildly unpredictable over the past 6-month period, again beginning August 6th.

Quiet Logistics, for example, has gotten very quiet indeed. A third-party logistics company headquartered in Massachusetts, Quiet Logistics specializes in order fulfillment and returns for e-commerce retailers that was acquired by American Eagle. A consolidation that sounded like a really good idea, American Eagle combined the classic ‘shipper’ with a ‘third party’ operation.

One could tender an expectation was built on cost savings for American Eagle and operating costs for Quiet. The company expanded rather quickly through several ‘quiet’ acquisitions, then “pulled back” quietly after missing financial targets. They replaced their CEO and were last reported to be “ramping down investment.” Quiet Logistics has gotten very quiet indeed.

Visiting their website, this time with a bit more scrutiny, I noticed that their web presence is based on the small screen which seems to point to an incomplete technology investment and could just as easily be a purposeful foray and specifically intended to target a younger entrepreneurial audience. Whether the small screen approach is the result of ‘built-on’ legacy technologies from several mergers and acquisitions or entirely new technology designed from the ground up is not known to outsiders and we’ll know more soon enough as the full impact of market compression comes to bear.

Moves by UPS and Ryder

Moving from the very small to the very large, has anyone else noticed the frequency and number of UPS store ads lately? Is this a predictable reaction of the behemoth UPS to the market compression; a targeted campaign aiming at small-scale shippers just to gauge the market or how smaller shippers are reacting to market compressions of their own, only time will tell.

Ryder in the meantime has continued a path of acquisitions, though not as quiet as Massachusetts’s Quiet Logistics. The Ryder acquisition of Cardinal is expected to result in a complete integration of Cardinal operations including facilities into Ryder; according to Ryder, “strengthening Ryder’s position as a leading customized dedicated contract carrier in North America” Only time will tell if Ryder management has the technology where-with-all in their Silicon Valley-Based Technology Lab which opened less than a year after Ryder acquired the logistics technology start-up Baton. Technology start-ups are risky at best, having a technology start-up in transportation tech perhaps, more so.

What to look for

I suspect larger entities will begin to double down on their previous gambles in the small-scale sector by defining and completing deeper acquisitions to complete a folio that the leaders of these acquisition-based growth companies expect will propel them into the next century. I expect that many more combined companies to struggle with integration challenges as they find their current stable of products and services challenged beyond their capacity which will be unable to keep up or grow through acquisitions of their own.

I suspect that we’ll see more from shippers like UPS and Ryder for that matter by the time the Super Bowl and post-Super Bowl advertising has eclipsed in April. Ironic isn’t it, that post-Super Bowl advertising is expected to eclipse at about the same time shippers and markets both scrambling for capacity today are expected to be exiting the darkness of the period and entering the light, shine on shippers, shine on carriers, more to come.

Maybe next time we’ll talk about how PartnerLinQ expects to help shippers and carriers overcome issues in this market where Market Compression is expected to reign large for at least the next several months if not years. e.g., how to ensure business relationships are sustained and remain connected during cycles of market compression through technology – just a few thoughts. If you have some thoughts of your own let us know, we’d love to talk about it.

Thomas Smith, Director Supply Chain Consulting, PartnerLinQ Inc.

Thomas A. (Tom) Smith is a seasoned leader in the EDI Industry and the Director of Supply Chain Consulting at PartnerLinQ. A professional services traceability, integration, & engineering manager, Tom’s real-world experience extends beyond the world’s most recognized brands and into supply chains everywhere. Working directly with industry leaders and organizations, Tom’s experience developing and delivering business processes and transaction standards across more than 26 industries has impacted brands, businesses, clients, customers, and our team member across the globe.

In recent years, organizations have faced a series of disruptions, impacting their operational continuity, resulting in lost sales, reduced revenues, and damage to brand reputation. This has heightened the importance for supply chain leaders to adeptly manage inherent risks by leveraging capabilities for accurate decision-making and utilizing data for improved planning.

The looming threats of shifting trade alliances, geopolitical conflicts, climate change effects on global logistics networks, and ongoing labor unrest weigh heavily on executive leaders’ minds. To tackle future uncertainties, logistics leaders are prioritizing resilient operations and flexible transportation solutions, aligning with diverse procurement strategies and meeting the demands of increasingly discerning customers.

According to IDC’s Global Supply Chain Survey 2023, business leaders, especially in transportation and logistics, prioritize improved visibility, agility, and increased collaboration. The impact of disruptions has prompted a notable focus on deploying advanced analytics to navigate changing conditions effectively.

Logistics service providers must also respond effectively to frequent and significant changes, while also balancing the push for resilient operations with the need to reduce and control costs. Economic conditions are driving concerns about higher and out-of-control costs, leading logistics teams to seek a competitive edge through efficiency gains.

Technological priorities for advancing supply chain digital maturity include artificial intelligence/machine learning, cloud platforms, and visibility platforms. Clean, timely visibility data is foundational for cultivating intelligence, enabling logistics providers to make informed, timely decisions and engage in scenario planning to drive optimal actions.

Continuous refinement of models to incorporate new data sources is also crucial for better business outcomes. Top priorities for logistics service providers include optimizing the supply chain to reduce costs and improving visibility across the end-to-end supply chain. Challenges such as generating efficiencies, facilitating better collaboration, and advancing sustainability drive the need for data-driven insights.

As organizations address inherent risks in global supply chains in 2024, the need for flexible transportation services with advanced intelligence becomes evermore crucial. Timely, informed, and consistent decision-making across complex logistics networks requires end-to-end visibility and collaboration. Logistics service providers play a critical role in achieving supply chain resilience, and platforms like PartnerLinQ enable them to deliver value, streamline operations, and contribute to long-term partnerships with customers. In a world where collaboration is essential, interconnected systems that provide insights from a single source of truth become highly valuable, paving the way for deeply integrated and resilient transportation operations aligned with customer supply chain strategies.

Learn more about PartnerLinQ and the ways of solving the supply chain challenges for both Transportation and Logistics Providers in our new IDC Spotlight Whitepaper.

Generative AI: The New Panacea

The Generative AI panacea is gaining momentum largely in part due to predecessor cure-alls such as GDSN, RFID and most recently blockchain.  Each over the course of their own hype-cycles insisting on magic bullet status, each contending that the days of linear, one-directional supply chains are behind us, each a new panacea denouncing the previous that somehow fell short. The more recent blockchain arguments have been so pervasive that swaths of humanity have been conditioned to believe supply chain traceability and supply chain traceability solutions based on blockchain will forever change humanity, end pollution, stop global warming, and eliminate mean tweets with believers and devotees evangelizing the blockchain argument far and wide. 

Arguments, quickly laid to rest by simply looking for the blockchain panacea that never arrived or by looking for that consumer who systematically checks the labels of his or her shirts to see exactly where the fibers that make up that shirt come from.  Perhaps we should look for that blockchain sales rep who, at this point, must be driving into the sunset of a spectacular career, perhaps if we look hard enough on the beaches of south Florida, we can find him, and he can help us to see the decades of successful blockchain enablement that we all somehow missed.  Maybe, we slept through the last decade and that blockchain sales rep is not to be found because we’re looking on a beach and not in the desert or a retirement home or maybe the blockchain panacea simply did not happen and maybe we are all looking at the beginning of just another panacea, the generative AI panacea. 

Supply chain traceability nonetheless remains elusive and soon enough the (Artificial Intelligence) arguments will replace all of the blockchain panacea arguments and all will know that the new panacea has arrived. Much like its blockchain predecessor, the Artificial Intelligence Panacea will solve or at least claim to solve all of our issues by providing a remedy for every difficulty including supply chain traceability.  It is entirely possible to imagine that many more activists than even the blockchain could muster will claim the Artificial Intelligence Panacea has arrived while touting the benefits of something they have not experienced in their lives, in their business, or on their phones. 

Even as this article is being compiled, publishing companies that promote crypto awareness – the big money promoters for blockchain investors have been putting forth articles all but debunking their own investigative journalism of days no longer present on blockchain technologies and have begun the inevitable shift to the Generative AI panacea.  One such article insists that AI models will grow massively in 2023 while simultaneously emphasizing the value of smaller, more precise models, which seems to take both sides of an argument.  It appears, even for the uninitiated the shift from blockchain to generative AI is occurring in real time. 

Retrieval-based traceability

If we are to make a business case that businesses must now adopt resilient, transparent, and perhaps circular value chains to stay competitive because of shifts in the landscape then we must also make the case that these organizations must lean on technology to do so which also means, by extension, bringing into view retrieval-based traceability.  Retrieval-based traceability infers a reliance on traceable resources and not on panacea.  Retrieval-based traceability infers incorporation of a localized knowledgebase and incorporation of all of the predecessor cure-all projects including efforts in GDSN, RFID, even Blockchain and AI; an approach that brings operational benefits and resolves the universal search for increased visibility. 

Organizations planning to adopt retrieval-based traceability must thereby rely on supply chain traceability solutions to manage the complexities of supply chain traceability, retrieval-based traceability makes these truths apparent: 

1. Traceability systems are powered by traceability data 
2. Traceability data is generated through execution of a variety of business processes carried out by each organization 
3. When we extend the view of traceability data generated through execution of a variety of business processes carried out by each organization to the full supply chain view, it becomes clear that each organization manages its own set of retrieval-based traceability data with supply chain traceability solutions 

If we concede Point 1 that supply chain traceability systems are powered by retrieval-based traceability data and do not rely solely on the latest tech fad, panacea including blockchains, GDSN, EPCIS, and RFID.  We must then concede that advanced supply chain traceability solutions , solutions that enable businesses to monitor their supply chains in real-time and ensure transparency to make data-driven decisions rely on Point 2; retrieval-based traceability data generated through execution of business processes and we can conclude the generative AI ONLY works when retrieval-based traceability data is present. In short, insights form in the presence of data. 

If we concede Points 1 and 2, then we must also concede that the scope of the retrieval-based traceability process in any industry model begins with the initial interaction between the trading parties which means neither generative AI nor blockchain technologies can help us.  The former being dependent on a collection of data and the latter being dependent on event processing according to experts, it’s no wonder that everyone over the past two decades flocked to the newest tech panacea available. 

Traceability systems are powered by traceability data

If Traceability systems are powered by traceability data, then supply chain traceability systems are powered by retrieval-based traceability data not generative AI and certainly not blockchains.  While both might prove valuable and block chains might prove invaluable for shared data storage, the scope of supply chain traceability models most certainly begin with the initial interaction between trading parties at the very beginning of the trade cycle.  

Companies seeking supply chain traceability for their customer base who have expressed interests in sustainability for example will not be easily satisfied by the promise of a panacea having previously invested in several.  Many will immediately recognize the hype cycle and having been through several will wait for things to pan out. The reality of supply chain traceability is that manufacturing entities generate retrieval-based traceability data through purposeful execution of integrated business processes.  When this view is extended throughout the supply chain it becomes apparent that each entity engaged in supply chain traceability manages its own set of retrieval-based traceability data. 

Initial Contact between the Parties

Manufacturing companies and their suppliers must engage in ‘initial contact’ steps in order to set up an initial business understanding before supply chain traceability can proceed. While initial contact processes may vary, the most efficient path to success is for manufacturing companies to contact all of their active suppliers at once.  Such plans must be carefully executed and extended by a team of experts in data collection and storage as one might find attached to supply chain traceability solutions.  The initial contact process must include precise transactional guidance to ensure that retrieval-based traceability elements are engaged throughout the process so they can be provided and referenced throughout the process that ensues.   

Building a Common Reference

Data alignment between manufacturing companies and their suppliers must include the exchange and storage of succinct item data (catalog) and organizational data through a business process that must include the regular exchange and storage of this data such that it is available for use in latter business processes including manufacturing, procurement, storage, and delivery. Engaging retrieval-based traceability elements such as GLNs and GTINs at the enterprise level and implementing GLNs and GTINs in Order-to-Cash transactions for example is a good way to start thinking about referenceable retrieval-based traceability elements that will be used later in the supply chain traceability solution.  While GLNs and GTINs may be considered by many to be the most efficient data keys; style, color, size and DUNS numbers work just as well in some industries; the point being the path to a systemic understanding of one’s supply chain is dependent on retrieval-based traceability data, which includes the unique identification of items and locations. 

Evaluating and Approving Goods for Procurement

Manufacturing Companies will then have to undertake an internal process for evaluating and approving goods for procurement based on retrieval-based traceability elements at the unique item level, which will extend to a lot and batch level and perhaps serialization in some manufacturing actives in order for supply chain traceability to proceed.  Evaluating and approving goods for procurement in order to be practical will take place in supply chain traceability solutions.  Evaluating and approving goods for procurement must include some measure of business process automation, succinct messaging, and precise transactional guidance to ensure that retrieval-based traceability elements are present and exchanged between manufacturing companies and their suppliers on an ongoing basis. Business process automation that allows for an approval process while linking batch and lots with internal catalog items for use in the manufacturing process such that they can be authorized for requisition and available to procure within the manufacturing entity. 

Price/Sales Catalog Business Messages

Manufacturing Companies must include Price/Sales Catalog messaging where trading partners begin the process of trade by exchanging basic business information related to the goods traded.  Price/Sales Catalog business message sent by the supplier to the buyer of the expected product line, includes trade item details such as unique item identification, product description, introduction, and discontinuation dates.  The key data and retrieval-based traceability elements in this exchange include unique item identification structured as data carriers such as a GTIN, UPC, or in the case for many Textiles & Apparel Manufacturing Companies; a combination of retrieval-based traceability elements, style, color, and size.   

Price/Sales Catalog messages are typically sent from a supplier’s system capable of supply chain traceability to a buyer’s system also capable of storing retrieval-based traceability elements consistent with supply chain traceability in order to provide the buyers with information regarding products and product lines and traceability elements.  Price/Sales Catalog messages are not considered as ‘one-time’ responses to a buyer’s request, rather Price/Sales Catalog messages should be considered as updates to the buyer’s internal catalog of supplier product information, ongoing and regular.  In terms of supply chain traceability Price/Sales Catalog messages may therefore be sent from the supplier to the buyer whenever the supplier’s product line changes.  The Buyer, by maintaining an internal catalog of a supplier’s products containing retrieval-based traceability therefore becomes more adept, knowledgeable, and better at identifying trade ready goods for the manufacturing process. 

Report of Test Results Business Message

The Report of Test Results business message supports supply chain traceability by supporting sellers, distributors, and testing services; the results may be required in support of consumer product safety or as part of a continuous improvement program or a product development process. The Report of Test Results business message relies on retrieval-based traceability elements and is used to transmit the results of independent tests performed to satisfy a business, product, or process requirement and in support of supply chain traceability.  Retrieval-based traceability data contained by Report of Test Results business message include the unique item identification as a data key, a product description, testing information, inspection data, certification data, and in some cases process control and other measurements, which might be required by industry.  Steel manufacturing, underground pipelines, utilities, are among those industries interested in supply chain traceability.  Textiles & apparel manufacturing companies are particularly interested in supply chain traceability for organic cotton and fiber traceability which must include retrieval-based traceability elements to be successful, RFID or EPCIS cannot manage it independently. 

The buyer’s internal catalog, requisition and approval processing

While supply chain traceability processes vary by organization, the exchange of Price/Sales Catalog business messages and the Report of Test Results business message are critical to the procurement process and particularly so in requisition and approval processes.  The procurement process may therefore begin with one or more approval workflows, workflows that rely on retrieval-based traceability elements stored in supply chain traceability solutions.  The approval process might include a requisition process and a Report of Test Results approval process.  Manufacturing companies may choose to purchase products and test them internally by leveraging internal labs or then send them out for independent testing to external labs in order to gather retrieval-based traceability elements.  Manufacturing companies may also require samples be sent by the supplier to independent laboratories at their own expense in order to gather retrieval-based traceability elements for supply chain traceability.  In either scenario, manufacturing companies will have to (1) be prepared to define an internal approval process for the purchase of trade goods and (2) be prepared to define to organize a procurement process to account for and track purchases, shipments and costs related to subsequent transactions in the calculation of total costs in their supply chain traceability solution. 

Ordering, Delivering, and Paying for the Goods

Manufacturing Companies today are likely to embark on a hype cycle endeavor, an endeavor which might include Generative AI, GDSN, RFID, block chain, or something which influencers have been conditioned to believe and promote and that manufacturing companies are likely to engage. 

Manufacturing Companies engaging in trade will most certainly leverage an ‘Order to Cash’ or ‘Procure to Pay’ process in the production of goods for sale.  These manufacturing companies, regardless of industry, should consider the extent to which retrieval-based traceability elements are present, stored, and available.   

Manufacturing companies regardless of industry must consider the extent to which their ‘Order to Cash’ or ‘Procure to Pay’ process includes supply chain traceability.   

If we believe the influencers, if we believe the hype, if we believe the days of a linear, one-direction supply chains are behind us and if we are to do our part as prescribed by these experts, then our supply chain traceability solutions must accommodate ‘Order to Cash’ or ‘Procure to Pay’ processes that include retrieval-based traceability elements. 

Built for industry experts, PartnerLinQ stands out as the premier supply chain platform that redefines supply chain traceability, digital connectivity, end-to-end visibility, and decision intelligence. PartnerLinQ’s innovation empowers real-time decision-making, fosters collaboration with business partners, and enhances predictability within complex multi-enterprise supply chain networks.  PartnerLinQ is where retrieval-based traceability elements are present, stored, and available out of the box, not as an afterthought but as a matter of practice. Harnessing the power of cloud technology, PartnerLinQ ushers in a new era of supply chain efficiency, optimization, and performance that improves your bottom-line, nurtures sustainable growth and includes supply chain traceability.

Raw materials are not only the building blocks of any product we consume but also the starting point. From consumer electronics to food products, manufacturers are involved in procuring, shipping, and storing massive volumes of raw material every day. This makes ensuring adequate supply and efficient management of raw materials critical for all companies involved in the production of goods. Moreover, raw materials are often an investment that affects cash flow as raw material costs have soared in recent months.  Listed as an asset on a company’s balance sheet, soaring costs often mean increased value even during a decline in sales.

Over the last few decades, product companies have been expanding their sourcing networks for cost optimization, looking to strike the best deals in terms of material and logistics costs. This, in turn, has led to increasingly complex supply chains for raw materials filled with single producers of raw goods and strategic partnerships. However, following the disruptions brought about by COVID-19, manufacturers face increasing “cost pressures”, primarily due to shortages in the global workforce. At the same time, they are facing a scarcity of raw materials and, in particular, ingredients. This has led to increased complexities in the supply chains.

Such complexities can easily disturb the delicate balance between supply and demand if not effectively managed. Overstocks, understocks, and product quality and compliance issues can add even more complexities to transportation and warehousing and disrupt the production process. Many smaller producers lack adequate cash flows and reserve capacity to recover from these challenges despite higher company value.

Issues to Address

Working with our clients, many of them are product companies, we have identified the following key issues impacting the supply chain of their raw materials:

– Cost

A raw material supply chain incurs several layers of cost related to energy, transportation and communication, logistics, labor, and even the adoption of newer technologies. While controlling operating costs is often a continuous challenge, a company cost management model can often be short-term and functionally focused. Therefore, optimizing supply chain costs demands greater insight. Through insight, companies can develop analysis models that align with their business values, functional outcomes, and long-term business valuation.

– Visibility

Traceability and transparency are essential in minimizing raw material safety and compliance issues, and visibility is the first step in that process. Companies need the ability to trace materials from the point of manufacture through their entire journey to the point of delivery. Whether inbound or outbound transactions and product flow, it is no longer ‘safe’ to use an age-old “one up / one down” methodology for tracking trade goods. Additionally, consumers are becoming increasingly curious about where their ingredients come from. So, accurate and real-time information from every node across the network can help enhance your brand value and increase customer loyalty. On the other hand, a lack of visibility exposes a company to undue risk and expenses.

– Communication

Fragmented information and a lack of communication leave parties in the supply network without visibility into each other’s actions, leading to inefficiency. A trade relationship lacking collaboration will surely escalate supply chain problems, particularly as markets and raw material networks expand.

Many challenges in supply chain management and raw material partner networks are traceable to outdated systems and processes that depend on traditional paper tracking, manual inspection, and black box integrations lacking adequate reporting systems. Although short linear supply chains can be optimized using spreadsheets or siloed software, modern material partner networks are more complex, involving complicated business relations. Such network complexities include packaging and process materials, which are better served by integrated supply chain solutions that avoid mass customization.

Digital Solutions to Manage Risk

As the ‘Great Disruption’ continues, markets remain volatile. Fluctuating material prices and logistical disruptions due to lockdowns continue to affect the global supply of raw materials. Also, quarantine requirements continue to affect the manufacture of raw materials and finished goods. This raises the urgency for industry leaders to take a more innovative approach to raw material supply chain management. It comprises improvements in forecasting, flexibility, transparency, and increased visibility to capitalize on the new normal.

Industry leaders need to use such forecasts effectively to plan and minimize the impact of volatilities in day-to-day operations. Additionally, leverage a solution that drives down costs and provides a competitive edge via end-to-end supply chain visibility, gaining more stability. 

Modern supply chain solutions can go a long way in formalizing and optimizing raw materials inventory and management.

Key Data Management Capabilities for Inventory Control

A supply chain solution that seamlessly integrates with data management technologies makes a business more efficient and less vulnerable to uncertainty. Advanced data management helps you to optimize inventory control through the following key capabilities:

– Functional Collaboration:

Maintains a consistent flow of information and insights across raw material partner networks, concerned departments, and business functions within the organization.

– Centralized Data Management:

Removes the need to maintain multiple integrations, bringing historical data, open orders, and shipping and invoice data into one unified digital connectivity, integration platform, and transaction processing model.

– Advanced Analytics:

Generate reporting based on real-time transaction processing to enable real-time and data-driven decision-making.

– Forecasting:

Combines data contained by the unified digital connectivity and integration platform and transaction processing model with improvements in visibility to reduce inventory spikes and shortages.

– Financial Planning:

Delivers visibility to your team so they may allocate funds to functions like procurement, processing, and production in time to ensure the quality and timely delivery of your products.

Although supply chain leaders understand the need for streamlined processes related to raw material management, they have had to rely on historical data or educated guesses to forecast future raw material demand for too long. However, data-driven forecasting resulting from functional collaboration and a unified digital platform eliminates waste, improves efficiency, and ensures the on-time delivery of quality products while reducing overall inventory costs.

That’s not all. Organizations with such a data-driven, analytical approach to collaboration can stay more informed while keeping an eye on raw material inventory and gaining significant competitive and cost advantages.

PartnerLinQ by Visionet: Digital Agility at the Speed of Business

PartnerLinQ is a hosted integration platform for EDI, B2B, and API integration; and is the flagship product of Visionet’s industry expertise and technology leadership. The PartnerLinQ team at Visionet has 25 years of experience providing industry-focused technology, consulting, and innovative solutions that drive global supply chain transformation from the factory to the end consumer.

PartnerLinQ is an innovative, process-centric, easy-to-use EDI solution that enables API-led, cloud-native integrations. It includes a simplified B2B communication engine that combines EDI, AS2, SFTP, and real-time APIs and easily handles proprietary file-based formats and custom integrations. With its overarching capabilities, PartnerLinQ is well suited for retail, e-commerce, wholesale, transportation, 3PL, distribution, and digital and analog partner ecosystems, helping your team achieve operational efficiency and gain real-time visibility.

Visionet, a Microsoft Gold Partner, leverages Microsoft Azure for the PartnerLinQ platform.  The PartnerLinQ platform can process thousands of transactions simultaneously across a variety of transfer protocols. Moreover, it transforms X12, XML, Flat Files, CSV, IDocs, and custom formats and can integrate them into more than 74 ERP, WMS, and TMS systems.

Along with its job scheduling and batch job capabilities, PartnerLinQ’s ability to manage increased transaction volume means the entirety of the business workflow is much easier to manage than the black box integrations of yesteryear. Additionally, by optimizing its business rules engine, an extensive library, and ERP integration, PartnerLinQ enables easy partner onboarding, simplified configuration, and access to visual data mappings.

A new world is unfolding in the global supply chain universe. What was thought to be the time for the recovery of the supply chains continues to pose new challenges. With sanctions against Russia, the invasion of Ukraine, followed by the US-China trade war in 2018, the COVID-19 pandemic, and natural disasters, supply chain management has always remained volatile.

Corporations are focusing on developing technological sovereignty. More plants are being developed, in several locations, and by outsourcing parts and materials from a wider range of suppliers, the global supply chains are beginning to resemble supply webs. According to Nathan Resnik, President and Co-Founder of Sourcify, this evolution from supply chains to supply webs is referred to as “multiple sourcing.” In addition, Gartner also adds to the situation, in a survey of supply chiefs, stating that

30% of respondents shifted their focus from a global to a regionally based supply chain model.

(Source: Gartner, 2021)

This shift from global to regional supply chain models underway could lead to the migration of jobs, demand surges, and production worth hundreds of billions of dollars over the next decades. In such a context, companies are turning to comprehensive efforts to strengthen their supply chains for future challenges.

How to get started?

Such objectives require huge transformative efforts in data transparency, AI technologies, the cloud, automated data-driven decision-making, headless commerce, and multi-sourcing service integrations. All that is necessary to break through the barriers and develop a robust supply chain.

Embrace digital ecosystems:

As a one-size-fits-all strategy is no longer viable, the supply chain industry requires major investments in modernized supply chain management technologies. One of the optimal solutions is to bring multiple channels under a single roof. This will empower businesses with a digital ecosystem, that negates data silos while promoting supply chain transparency. When all partners are connected, this ensures more checkpoints, faster response times, and process efficiency, enabling a better understanding of the market demand.

Henkel, a Germany-based consumer goods firm, was able to leverage this strategy by integrating various channels into one. The firm leveraged a cloud platform that enabled them to make real-time assessments and supply tracking. After connecting 33 of their factories across the globe, they were able to get real-time insights into inventory levels, vehicle logistics, and consumer preferences.

Invest in data transparency:

Consistent, predictive, and actionable analytics are at the heart of end-to-end supply chain visibility. Supply chain companies can challenge the industry disruptions by combining MPS, ERP, SRM, and supplier data. This will empower them with real-time access to information across all platforms for better evaluations and informed decisions across the value chain.

Strengthen your synchronization capabilities:

Data synchronization enforces supply chain transparency, so both go hand-in-hand. When digitally synchronized, supply chain companies can strengthen their ability to estimate risks and optimize inventories while meeting customer demands without waste. Such transformative efforts can not only help you proactively identify vulnerabilities but also lower redundancy, generate faster lead times, enhance communication, and give a crystal-clear picture of your entire sourcing system.

Save time with automated, data-driven decision making:

Traditional supply chains with manual processes, inventory surplus, and no visibility are limited to meeting the upcoming market demands. Constraints in daily performance monitoring and production, as well as the traditional consensus forecasting approach, take companies four to five weeks’ worth of time to reach a demand-planning consensus, by which time the data gets redundant.

A better solution to eliminate such process inefficiencies and save your company a week’s worth of time is to unite all data into a single system. Garnering and updating data points from all partners within the network will empower your team to proactively recognize trends, flag threats, and help trigger preventive measures, all while saving time since the decisions are taken on real-time occurrences.

As a result, automation frees up time for managers to focus on more profitable operations, like negotiating better rates and expanding their firm.

Explore multi-sourcing service integrations

The changing global supply chain dynamics, following rising labor costs, pandemic-induced shutdowns, and surcharges in the US-China conflicts, are some of the reasons why supply chain companies must not rely on a single vendor. However, opting for a multi-sourcing supply chain strategy empowers businesses to source products across geographical boundaries, and thanks to digitization, communication with the suppliers ensures transparency and supplier portfolio balance.

This opens doors to diversification and can help companies lower the risks of supply chain disruptions, reduce prices, and safeguard against market volatility. This approach is further validated by Gartner, stating, “It’s important to build a model that reduces reliance on single-sourcing locations wherever possible. This strategy protects supply chains from future sourcing shocks caused by unforeseen disruptions.”

Deliver personalized user interactions

Integrated supply chains and visibility throughout your supply chain management is not enough to tackle the disruptive supply chain industry. Increasing customer interactions is also an essential element that is needed and requires businesses to create unique and flexible customer experiences.

Such solutions can be implemented by creative services like Headless Commerce, backed by PartnerLinQ. A scalable solution that leverages API-driven integrations and enables personalized user interactions, increasing the speed of value delivery to customers across the value chain — Meeting your business where it needs business functionality.

Realize the true disruptive supply chain solutions with the right partner.

Turning industry challenges into opportunities is the key to success for any business. This is where turning to a reliable supply chain management ecosystem partner such as PartnerLinQ comes in. While “BIG VAN” will glorify their network, the truth is that it’s all about your network and your trading partner ecosystem. 

How smoothly you onboard trading partners translates into how resilient your trading partner ecosystem is.

PartnerLinQ’s cloud-native platform ensures a smooth transition for you, working exceedingly well with custom ERP integrations while our Common Processing Workflow reduces the friction to support smooth partner onboarding. Also, easy trading partner onboarding can facilitate you turning to the new trading partners and making up for the inventory gap.

Our end-to-end supply chain visibility comes at no additional cost, whereas ‘Black Box’ EDI solutions are typically time-efficient, helping your team to spend more time on other industry dimensions. Also, with built-in analytics and a home screen monitor, we help supply chain companies proactively determine inventory shortages before they occur. Additionally, we offer Transaction and Error Analytics, a well-defined set of business rules that reduce friction, and built-in alerting, which is configurable to any supply chain condition you want to know more about.

Bottom Line

A trailblazer in digitized supply chain solutions, PartnerLinQ leverages multi-channel integrations to deliver customers and partners with enhanced experiences, helping them realize the above goals and reimagine their connected commerce. Get in touch with one of our experts to learn how to achieve digitization and transparency across your supply chain.

The last few decades were marked by widespread adoption of computers quickly followed by automation; in fact, Industry has not stopped advancing since the Industrial Revolution began in Great Britain (Industry 1.0 1760-1840) more than 200 years ago. Now the way we produce, buy, sell, and trade things is undergoing yet another series of changes, perhaps even somewhat of an upheaval.

Modern manufacturers are today enhancing their processes with intelligent autonomous systems powered by digital innovations like Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML). The once far off dream of smart factories is a reality; we have surpassed the targeted robotic processes and connected systems we once dreamed of and are enabling decisions without human intervention.

Our systems today, with access to more and more data, are growing smarter by the day, ensuring that our world produces more and wastes less. Industry 4.0 is no longer a buzzword, it’s a reality that suppliers and manufacturers across the globe are struggling with, each playing catch-up in a world undergoing a seismic shift.

Connecting to Deliver Experiences

Harnessing the potential of Industry 4.0 means emerging from the operational mindset. Customers today spend less time ‘gathering’ the goods and services they require as they once did and more time enjoying them. The market today is filled with choice and with choices just a few clicks away, they can spend more time on experiences that engage them personally.

Today’s consumer is all about convenience, shopping availability over price. A recent article cites 75% of millennials value experience over things and expect additional utility from the brands they patronize. The experience is derived from the utility offered by access to goods and services. It becomes business-critical for brands to understand evolving customer desires and deliver experiences that delight.

For manufacturers, factors like on-time delivery, responsiveness to demand, and seamless partner connectivity all add up to a memorable brand experience; as a result, organizations need to augment their digital supply chains across here-to-fore traditionally siloed business areas like manufacturing, planning, logistics, R&D, after-sales services, and maintenance.

The digital supply chain seamlessly connects partners along the value chain and enables organizations to fully realize their Industry 4.0 vision by accommodating design, manufacturing, logistics, inventories, and even asset management.  Industry 4.0 means connectivity and it involves wide areas of your business.

Building a Connected Digital Supply Network

Nearly everyone I talk to these days is on a path to building a connected digital supply network; while they are on the same path, the journey towards Supply Chain 4.0 is different for every business. What has become critical is an understanding of the components that make a digital supply chain reliable, flexible, and efficient.

• Customer-Centric Design

The customer needs to be the front and center of all supply chain planning. Organizations with an in-depth connection with the end-client can monitor their behavior and analyze trends and innovate accordingly. Smart solutions and intelligent interfaces capture real-time data on customer behavior from the live environment and help design customer-centric supply chain and manufacturing processes.

The product development process needs to be deeply integrated with this design concept. In fact, the entire demand chain needs to be understood, documented, retained, and related; only then can you have a deep understanding of your Order to Cash, PO to Payment business processes and realize how and where to make improvements.

• Real-Time Visibility

Siloed functional processes affect an organization’s flexibility, leading to long and cumbersome planning cycles. All too often one process ends and another begins, without bringing about an abrupt end to progress between business units.  Seamless communication and synchronized units provide a unified, real-time view of both supply and demand chains. These processes enable optimization of workflows and include inventory and other services once thought to the outside of the ‘norm’. 

Tracking these data, and further still these transactions, helps increase supply chain visibility and productivity, assisting managers and planners to make informed decisions that are based on reliable insight.

• Timely Delivery

Reliable and timely deliveries top the list of priorities for today’s customers and factors in the convenience of today’s consumer demands. Timeliness is a critical supply chain component that can make or break the customer experience; when the customer reaches for your product and it’s not where they expect it, they can very easily reach for another. Whether they’re reaching for a substitute product or another retailer, the outcome is the same; there’s an opportunity cost for your business and the consumer.

Companies that prepare to leverage Industry 4.0 capabilities can streamline logistics, guarantee better delivery experiences, and reduce out of stock conditions with seamless communication. Warehouses can monitor storage conditions, optimize delivery schedules, and quantify inventories and reorder points, which are often tragically overlooked.

By simply looking ahead to real-time weather and traffic updates with connected vehicles, we can adapt to the best routes based on supply and demand activities and ensure our products and services reach their intended targets on time, every time.

A Digital Supply Chain for Your Next-Gen Intelligent Enterprise

While the ‘chain’ metaphor explains the underlying utility of a supply or demand chain – connected and sequential – it simultaneously depicts a sense of flexibility and strength. The ‘chain’ implies a connection from one point to the next. The business environment today also requires responsiveness and agility which cannot be ignored.

Today’s digital supply network needs real-time insights that drive supply chain visibility, supply chain planning, communication, analysis, and execution – an orchestration of interactions across all critical business units, which is no longer a chain but more of a continuous strap. While the chain metaphor persists, the links previously used to identify business units fades into the background emerging as one continuous loop through which a truly flexible organization enables work and data to flow seamlessly across functional areas. This allows quicker issue detection and resolution, effectively reducing operational and financial risks.

Intelligent technologies power intelligent enterprises; when these are combined as a synchronous whole as they exist in Industry 4.0, they dramatically improve an organization’s ability to navigate the digital economy of today and deliver an experience that exceeds customer expectation.