Digital Supply Chain Trends Impacting 2021 and Beyond

Even in the context of COVID-19, the global supply chain management market is set to grow 11.2% by 2027.¹ Currently, 79% of companies with high-performing supply chains are achieving revenue growth greater than the average within their industries.² As a result, beyond 2021 businesses will need to realise the benefits of modern digital supply chain management in order to remain competitive.

Supply chains have seen the emergence of new and diverse trends in recent times, driven largely by a combination of globalisation and technological advancements. Above all else, supply chain management will need to develop processes that are safeguarded against future supply chain shocks.

At Data Interchange, we’ve spent nearly five decades driving EDI and supply chain innovation. Here, we want to address how supply chains are changing and how next-level EDI solutions are helping set new benchmarks for flexibility and innovation in supply chain management. Let’s get started.

Suggested reading: If you’re interested in learning more about how EDI delivers transformational outcomes for businesses, take a look at our eBook — The Supply Chain Centred Business

Trend 1: EDI-as-a-Service 

EDI (Electronic Data Interchange) has historically provided the technical framework for automated supply chain communication, performance and visibility. However, EDI itself is still evolving — and this will impact supply chain management best practices, both current and future. 

The benefits of EDI to supply chain management are many, but it really delivers on:

• Efficiency: Automating supply chain communication and management, reducing overall costs.
• Visibility: The information surfaced by EDI throughout a supply chain provides unparalleled insight into performance
• Control: The standards-based transfer of data to who you want, when you want.

But the drawbacks to EDI have hindered its progress so far. These have included:

• Standards complexity: Many standards exist for the same message types.
• Supplier or customer capability: Not all trading partners can technically implement EDI.
• The slowness of onboarding: Testing and parallel running takes time.

EDI-as-a-Service addresses these shortcomings head-on. It is a 21st-century EDI overhaul that goes beyond hybrid EDI approaches to deliver digital supply chain transformations. It brings with it increased agility, simplicity, and simplified integrations.

This approach marries the best parts of a wide range of EDI solutions within one single system, such as:

• WebEDI tools
• Managed EDI services
• EDI via VAN
• Point-to-point EDI

This approach will underpin the other supply chain trends we will cover here. There’s never been a better time to take advantage of it.

Suggested reading: If you want to learn more about the history and future of EDI, check out our blog — What is EDI: The History and Future of Electronic Data Interchange

Trend 2: The emergence of the Industrial Internet of Things (IIoT)

The premise behind the Internet of Things (IoT) is to create a vast network of low-cost interconnected sensors. In the supply chain, these devices can track and authenticate products and shipments as they progress. They can also monitor the storage conditions of products to enhance quality management.

The Industrial Internet of Things (IIoT) refers to IoT’s extension and use within industrial sectors and applications. IIoT econmpasses applications like robotics and medical devices, facilitating increased efficiency and reliability across operations.

Benefits of IIoT within supply chain management include:

• Reduced errors
• An increase in efficiency
• Predictive Maintenance
• Reduced costs
• Improve safety

As most companies are still coping with outdated systems, new technology, and connected and unconnected assets, it will take a while for the IoT and IIoT to take full effect. Many developments are being driven by the impending arrival of 5G networks, which will offer higher data processing, lower latencies and more reliable connectivity. This, in turn, will require vast amounts of data to be processed rapidly.

A modern EDI solution like EDI-as-a-Service is well equipped to facilitate the effective utilisation of the IIoT within modern supply chains. EDI can support the translation and standardisation of messages and documentation, as well as supporting transfers between IIoT and Material Requirements Planning (MRP) and Enterprise Resource Planning (ERP) systems. The result is previously unattainable supply chain connectivity with manufacturing line data.

Trend 3: The need for agility

In the last year, we’ve seen businesses win and lose based on their ability to respond to changing market, business, and partner requirements. Sudden upheavals in the supply chain are now to be expected, including:

• The emergence of different suppliers
• A requirement for alternative sources
• New lines of business being pursued

Slick supplier integration will be required to respond to unforeseen circumstances effectively. Systems and tools supporting the smooth running of the supply chain, such as EDI, have to step up to ease such quick process changes.

The Achilles heel of EDI has always been that trading partner onboarding has been painful for many companies, especially those looking to connect with thousands of suppliers.

Agility will require a more flexible approach. EDI-as-a-Service is inherently more adaptable than traditional approaches to EDI. By tailoring the service to meet specific requirements, EDI-as-a-Service can deliver agility while minimising the cost of production downtime and an adverse impact on the existing supply chain.

Trend 4: The growth of automation

Supply chain automation is being adopted to combat the many challenges of operating in today’s markets. Supply chain automation is leveraging technologies such as:

• Artificial Intelligence (AI)
• Machine Learning (ML)
• Robotic Process Automation (RPA) 
• Optical Character Recognition (OCR)
• Robotics

Automation is also finding application in all elements of the modern supply chain, such as:

• Payments and invoicing
• Inventory updates/management
• Customer service
• Picking/packing
• Setting and tracking revenue goals

Making such automation work seamlessly requires EDI, and as a result, increasing adoption rates is critical. By incorporating EDI-as-a-Service into automation strategies, you can achieve:

• Sharing of all information directly and automatically.
• Insight into the end-to-end system for all participants.
• Seamless communication for issues to be resolved rapidly.

Trend 5: The growth of cyber-threats

Supply chain cyber-threats affect all supply chain processes and can touch every element of production and delivery. They can include the theft of intellectual property, goods or malicious disruption — ranging from animal rights to working conditions to political motivation.

It’s hard to keep data secure if you’re still relying on phone, paper, fax and email for your business transactions. Digitisation of manual processes will be essential. EDI-as-a-Service facilitates the switch from any manual, paper-based processes and brings security, reliability and increased levels of governance to all business transactions.

Areas that will come into focus to counter cyber threats include:

• Data protection: Having assurances that the party you are interacting with is who they say they are will be essential.
• Data locality: Critical data exists at every level of the supply chain, and must be classified, located, and protected no matter where it is — especially in highly regulated industries.
• Data visibility and governance: Participating supply chain trading partners will need more control over their data. They have to decide who to share it with and what a permissioned party can see.
• Identity and access management: Services such as EDI Value Added Networks (VAN) are a simple and cost-effective way to securely store and control access to data across a broad ecosystem.
• Data identification and encryption: Data, both in motion and at rest, will need more protection. As supply chains modernise, look for the implementation of:
  • Digital signatures, multi-factor authentication
  • Tokenisation, replacing original data with an unrelated value
  • Data loss prevention tools
  • File access monitoring and alerting processes

The best of times – the worst of times

The harsh reality is that supply chain complexities will continue, and shipping expectations will become more demanding and more stringent. To rise above the competition and grow as a company, organisations must leverage these influential trends to pave the way to a brighter future.

Digital transformation in the supply chain now stands at the forefront of long-overdue improvements. EDI will be critical to this transformation in 2021 and beyond. Modern EDI solutions, such as EDI-as-a-Service pioneered by Data Interchange, will enable businesses to benefit from these exciting trends and thrive in the future. To learn about how we can help your business simplify EDI, get in touch today.

---

^1.97 Supply Chain Statistics You Must Know: 2020/2021 Market Share Analysis and Data

^2.The State of Supply Chain Management — Statistics and Trends