Governance compliance drives supply chain visibility

Shippers are digging into data visibility solutions as governance standards and supply chain disruptions prompt a deeper look at sourcing and materials, industry experts say. “There really wasn’t that need for us as compliance professionals to have that deeper supply chain visibility ... it's only because of the pandemic, which highlighted how fragile our global supply chains actually have become,” Amy Morgan, head of trade compliance at artificial intelligence platform Altana AI, said Wednesday during a webinar hosted by Flexport. [caption id="attachment_57131850" align="alignright" width="467"] A visual representation of the supply chain and how AI can interpret and rebuild supply chain. Photo / Flexport[/caption] Supply chain stakeholders are finding solutions to data gaps in vertical integration, data sharing and AI-driven databases. Globalization creates new challenges In an older, more historic supply chain, businesses could source materials easily, as they had a closer connection to suppliers than they do today, Tom Gould, vice president of global customs and trade at Flexport, explained during the webinar. But globalization has made it more challenging for companies to be as intimate with their suppliers across tiers. Altana’s Morgan agreed in part, saying, “Companies might know who their direct, tier-one suppliers are because they pay them, they order products from them, but they know very little about who that supplier gets their raw materials from, or they know very little beyond that tier one.” Varying factors hinder supply chain visibility, including competition and government restrictions, as well as the complexity of sourcing materials back to their origin, she said. Data access problems create further complications, as businesses must follow paper trails through audits, questionnaires and surveys in order to collect the correct information from suppliers, Morgan explained. “It is critical to really have that seamless exchange of data between the manufacturers and airfreight providers to really have an end-to-end seamless supply chain experience,” Manouj Tahiliani, general manager of master data management and 360 applications at data management software provider Informatica, told Air Cargo World in an interview of “On Air with Air Cargo World.” See also: Data visibility the future of supply chain A shifting visibility landscape Flexport’s Gould said different factors are driving deep supply chain visibility, like governance standards. Change is now happening as “companies are using multiple different laws and rules to encourage or force more companies to dig further and further back in their supply chain, not just things like rules of origin,” Gould said. Social initiatives like labor or climate concerns can also impact government rules around supply chains, requiring companies to look further into their trade and supply chains to answer social questions, he said. Germany, for example, in 2021 passed the “Act on Corporate Due Diligence Obligations in Supply Chain,” which focuses on environmental and human rights risks from direct and indirect suppliers, along with the enterprise itself. A need for supply chain resilience is also driving data visibility as the global challenges of the past two years have shown, Tahiliani said. Increased visibility allows companies to pivot when any part of the supply chain process is disrupted. “Supply chain visibility is hard, and it’s going to be expensive, whether you apply human bodies and human effort to do the ‘man-work’ or if you employ a technology to help do it for you, you’re going to make an investment,” Altana’s Morgan said. “Now the cost is, if you don’t invest or if you don’t engage in this deeper visibility, it’s going to come back and hit you hard.” Solutions Vertical integration is one solution to naturally provide data visibility in the supply chain, because each step of the process is connected, Morgan said. Upgrading a company’s technology landscape is another solution for data gaps, Tahiliani said. “Artificial intelligence is key to help solve the problems to really accelerate the supply chain transformation to make it simple to make it productive,” Tahiliani said. AI can pull what a company does know about its supply chain and then construct the extended supply chain, Morgan added. As the amount of information required for governance standards increases, so too will a business’ database and systems to process and analyze that data, Gould said, making technological development the natural next step in visibility. Join Air Cargo World for our next webinar, “Forward Thinking: Best practices for freight forwarder success,” on Tuesday, Sept. 13, at 11 a.m. ET. Click here for more information and to register.

Governance compliance drives supply chain visibility

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