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.

Modern platforms of the future are expected to create provisions for seamless and experiential integration of emerging technologies such as artificial intelligence, machine learning, and the Internet of Things (IoT).

As the supply chain ecosystems are experiencing significant impact – new patterns of needs are emerging around the greater agility in reconfiguring value chains, ability to anticipate disruptions in logistics and demand fluctuations in time, and the need for heightened visibility to support the day operational decision making. Such capabilities can equip companies to promptly respond to changing market conditions, proactively manage supply chain disruptions risks and discover and avail the new emerging opportunities in time.

“Businesses must consider breaking free from the limitations of outdated technologies and boldly step into a future defined by innovation.”

In the wake of pandemic, uncertainties and disruptions have become the new normal. Businesses are grappling with the need to continually adapt to shifting priorities which are influenced by ongoing geopolitical and economic volatility. There is stark realization that businesses cannot solve the challenges of today and tomorrow by continuing to limit themselves with technologies of the past. This situation has underscored the importance of re-imagining transformative digital information technology delivered through innovative platforms like never before.

As a result, the role of the new generation of enterprise platforms is steadily increasing. With remote work now widely adopted as the standard across the global workforce, Software as a Service (SaaS) platforms serve as a centralized and accessible hub for supply chain management. Teams can collaborate seamlessly, access critical information remotely, and maintain operational efficiency regardless of physical location. This flexibility is crucial for businesses looking to build resilience in their supply chains and navigate the complexities of the post-COVID landscape.

The dynamic nature of innovative SaaS platforms ensures that businesses can quickly adapt to evolving customer demands, market trends, and regulatory changes. Whether it’s optimizing inventory levels, predicting demand fluctuations, or enhancing digital communication with buyers, suppliers and distributors, these platforms enable a holistic approach to agile supply chain management. The ability for such platforms to provide dynamic and agile access to information, coupled with advanced analytics and collaborative features, positions them as crucial enablers of success.

Supply chains that leverage these platforms can look forward to gaining a competitive edge by fostering resilience, adaptability, and enabling timely access to insights into their supply chain operations, ultimately improving their overall business outcomes in a rapidly changing business landscape.

Instead of behaving as the isolated capability tower within the enterprise technology landscape, modern platforms of future are expected to the create provision for seamless and experiential integration of emerging technologies such as artificial intelligence, machine learning, and the Internet of Things (IoT) in SaaS platforms adding another layer of sophistication.

“We firmly believe that technology should serve as both an enabler and a game-changer, empowering businesses to operate, monitor, and act with unprecedented autonomy and agility.”

These technologies enable predictive analytics, proactive issue resolution, and the automation of routine tasks, further streamlining supply chain processes and enhancing overall efficiency.

However, in the realm of mergers and acquisitions within enterprise technologies, it’s common to witness platforms acquiring point solutions. While this expansion on paper promises enhanced features and functionalities and higher valuation multiples, these solutions often fall short when disparate technologies are patched together, leaving no assurance of seamless performance or positive customer experience.

At PartnerLinQ, we stand apart from this trend. Rooted in a tradition of solution engineering and professional consultancy in supply chain best practices, our foundation is built on decades of expertise and hands-on experience. Originally conceived by Visionet Systems, PartnerLinQ emerged as a cloud SaaS solution aimed at addressing the challenges of EDI and API supply chain connectivity. Over time, the platform has evolved to prioritize visibility enhancement and decision intelligence capabilities, catering to the evolving needs of the industry.

The resounding success of our platform has led to the establishment of PartnerLinQ as an independent entity in October 2023, extending its solutions beyond the clientele and consultancy practices of Visionet Systems. This unique blend of heritage and independence defines our approach, ensuring that PartnerLinQ continues to deliver cutting-edge solutions that drive transformative change in the supply chain landscape.

The acknowledgement of PartnerLinQ as a “Major Player” in the IDC MarketScape – Worldwide Multi-Enterprise Supply Chain Commerce Network 2023 Vendor Assessment by the International Data Corporation (IDC) represents a major milestone for our company. Playing a pivotal role in helping businesses assess and analyze the capabilities of supply chain management in this complex space, IDC’s recognition serves as a testament to our technological expertise, innovative approach, and forward-thinking vision, solidifying our position as a leading player in the industry.

At PartnerLinQ, we’ve conceived, engineered, and launched a groundbreaking platform built from the ground up. With a keen focus on the principles of organic growth and innovation, we firmly believe that technology should serve as both an enabler and a game-changer, empowering businesses to operate, monitor, and act with unprecedented autonomy and agility through seamless digitalization. As we strive to achieve continued success and sustainable value generation for our customers and prospects within the industry, the impact of analyst recognition becomes multifaceted, touching various aspects of our business trajectory. Moving forward, the PartnerLinQ team remains committed to actively engaging with IDC’s esteemed analyst team and wider analyst community, by integrating their innovative and forward-thinking ideas alongside the innovation we provide through the voice of our customers.
 

Jawad Khan, CEO & Founder, PartnerLinQ Inc.

Jawad Khan is the founder and CEO of PartnerLinQ. As the innovative force behind PartnerLinQ, Jawad guides the company in reshaping digital connectivity and collaborative intelligence within the extensive supply chain sector. His leadership philosophy is deeply rooted in ensuring that supply chains are not merely reactive but strategically positioned to respond to perpetual shifts in business demands swiftly and efficiently.

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.

Why do Most EDI Practices Struggle to Onboard New Trading Partners 

Clearly one of the biggest challenges businesses have with successfully executing an EDI integration strategy is the onboarding of new trading partners. This challenge appears regardless of network or affiliation and whether the solution is an everything-to-everyone VAN or a simple service.  

The fact is that most Electronic Data Interchange (EDI) solutions including those recommended by a partner, an ERP provider, or a marketplace are still onboarding trading partners the same way as they’ve been doing for years; and if nothing changes in the practice, then nothing changes in the process and the same issues persist. 

Why is that? 

Many initiate the painful and often disappointing cycle of partner onboarding with their legacy product driven by internal needs. EDI service providers, in many instances, possess multiple legacy products and a pressing need to market an updated product or service subscription. The initial internal conflict within the service organization makes these providers slow to respond to requests for new trading partner requests  

Additionally, they are often less inclined to deviate from established procedures, hindering much-needed changes to their practices. It is worth noting that at this stage, the practice is inundated with new and inexperienced resources. This poses challenges in adapting to evolving demands and adopting innovative approaches within the dynamic landscape of EDI.  

Moreover, change is one of those necessary ingredients for survival in an ever-changing world, which includes newer ways of doing things even with legacy products. Much like fashion, change never goes out of style, and without integrating change into legacy or even antiquated platforms or practices, businesses simply cannot respond to modern EDI integration requirements that are needed in the market today. 

Much of this change starts with the ongoing challenge of partner onboarding. The complexity of onboarding new trading partners begins with the EDI solution and how that solution has enabled change from the point where the solution team first encounters that next trading partner. Then there is the issue that companies leveraging EDI with their business partners cause based on a reluctance to provide precise directions by way of EDI specification documentation or samples in a sort of public forum.  

Maybe companies do not know what their trading partner profile looks like or how to demonstrate it or just maybe they have never gotten around to producing or updating their specification document. In any case, keeping important EDI information behind a firewall and away from public view until the point where the opportunity to connect has arrived is certainly counterintuitive to making business work. Whatever happened to giving a partner a heads up? 

Don’t Make Enabling Your Partner Hard: Two Recent War Stories

Here are two recent customer examples that demonstrate how businesses are making it harder than it should be; the first example is an internationally recognized mid-market meal-kit foodservice provider and the second, two well-known fashion and apparel dynasties.  

Pay Attention to Details  

Let us begin with the first with one, an internationally known publicly traded mid-sized foodservice provider. In this example the food service provider’s business partner contacted PartnerLinQ asking how they could connect with them via EDI. As experts in the space, we naturally understood both the transactions and the steps needed to enable the EDI connection, so we set out on the path outlined by our customer’s business partner, which according to their web site, was to contact their EDI solution provider via a posted email address. So, we did just that.  

Four weeks and dozens of emails later PartnerLinQ escalated the latency to our request to the business partner’s sales team, requesting a personal contact to get the ball rolling. During this process we also had to wait for the specification and sample documents to be forwarded to us to confirm, since there were no postings or even publicly displayed documents of any sort, not even an email address. Due to this oversight both our customer, the foodservice provider, and their business partner would not gain any benefit from using EDI for yet another month, further delaying any ROI that could be derived. 

Making it Easier to do Business 

The second example is a well-known German shoe manufacturer, who produces and sells a particular brand of sandals and custom casual shoes known the world over. The problem arose when their business partner, a global footwear company that is home to a diverse portfolio of loved and admired brands and ferocious about fit, encountered an unexpected EDI connection issue more than a year after they switched their EDI systems to a new provider. 

The business partner’s new EDI solution provider in this case was reluctant to fix the problem, even to the point of near refusal in remediating the connection issue. The reason provided was that the remedy fell outside of the classic remediation process. This same EDI solution provider doubled down on their refusal to fix the problem even after when one of the parties introduced options into conversation in an attempt to resolve the issue.  

This impacts my business…how do we fix it? 

While these examples do not necessarily represent how everyone approaches EDI onboarding, best practice stipulates that your team is always responsive to email even when text is not received as intended.  

After all, a global understanding of a ‘global standard’ is rather uncommon knowledge and EDI specifications no matter how precise they come are not proprietary. Many of the largest retailers and suppliers understand both, and make it their business to get connected, and in terms of specifications, make this information public. 

The second part of these stories and the reason for writing this blog post is to help you get over, under and around such obstacles. Keeping your eye on the goal is critical and recognizing obstacles so they can be avoided in the future comes in a close second.  

Things to Consider in selecting a business partner or EDI solution provider  

As you look into your EDI strategy for 2024, below is a list of those obstacles and what you can do to avoid them.  

1. When looking to engage with a new business partner, look at their EDI profile and where they keep their EDI specifications. If these instructions are not clear or you cannot even find them, ask the business partner for their EDI profile or EDI specifications before you start down the engagement path. For a great example of what a good EDI profile looks at Burlington or Macy’s profiles. Bottomline, if a prospective partner is giving you a hard time or is making it difficult to even get this information, you might want to consider putting another partner ahead of them. 
2. When dealing with a business partner whose point of contact is a solution provider causing delays rather than expediting integration, it is advisable to document the incident and the provider involved. This proactive measure is essential not only to address the immediate setback but also to safeguard against selecting them as your EDI solution. By doing so, you can effectively sidestep a significant obstacle on your journey toward achieving your goal. 
3. When you are talking to a new EDI solution provider, the first question they may ask you will be a good indication of what they do. So, if they ask about your volume and not your transactions or where you find issues, it is a good sign that they need to sell a subscription and are not as interested in solving your connectivity issues, or helping you grow your EDI practice as you might think. 
4. When engaging with an EDI solution provider, inquire about their methods for comprehending the unique operations of each trading partner. If their predominant responses revolve around ‘network’ or ‘history,’ it often signifies a dependence on legacy systems rather than fostering a dynamic culture of continuous improvement. For your EDI practice, which demands meticulous attention to detail at this stage of maturity, such a commitment to embracing change becomes crucial. 

Committed to Making it Easy  

These war stories represent just a glimpse into the myriad experiences we have encountered in our journey, each contributing to our ability to diagnose problems effectively and apply best practices. At PartnerLinQ, we are dedicated to simplifying complexities.  

We have been studying our EDI customers and competitors and recognize that digital agility between business partners is what most Multi Enterprise Collaboration Network customers want. Removing friction caused by multiple formats and connections is where we began. Beyond EDI, we’ve added an AS2 solution, an API Layer for Commerce Channel connections and included the ability to connect with a broad ecosystem of Commerce Platforms, Marketplaces, B2B Portals, Social Channels, Credit Cards, and Shipping Solutions  
We are committed to making it easy and if you would like to explore your options with a PartnerLinQ Expert, we are happy to help and there is no obligation. Contact us today! 

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.