INFORMATIONSFLOW
From Stovepipes to Exchanges
it possible to re-engineer the processes, taking away unnecessary
ground handlers, trucking companies and so on. We simply can not
steps, putting activities in parallel instead of sequential, and making all
keep on connecting in a peer-to-peer fashion because the number of
participants much more pro-active.
needed connections is growing exponentially and we are already behind. We need a new technology that integrates and collaborates around
Improvements for all parties
data and we believe the suitable technology is the internet. In the SCM
The impact of digitization goes far beyond the logistics departments
information flow of the future, integration will be a similar experience as
and the logistics service providers. In all the companies we visit, we find
browsing on the internet where URL’s give access to data, systems or
small and large examples of value that can be created with digitized
people. A kind of internet for logistics. Using internet based technology
supply chains. The factory manager does not have to stop production,
will allow us to connect to an infinite number of partners and data sour-
because wrong deliveries were prioritized, the freight handler can be
ces instantly at low costs.
ready with a special crane, when a truck arrives etc. If you ship with an integrator you get door-to-door much faster than
The new SCM can be implemented stepwise
traditional forwarding services (mainly when using air-cargo). So the
In a well-functioning SCM information flow, information does not need
question is why does it take double the time with a freight forwarder?
to be re-entered into computer systems and built-in logic checks will
The answer is quite simple. The parcel service providers or integrators
support getting input right the first time. In a first phase companies
own or control the assets used, and the forwarders generally does not.
tend to digitize the existing (paper based) internal processes. Often
The integrators have a better control over the information end to end. It
already a good business case, a road to quick wins. Then processes are
is a more expensive solution that is sold as a premium, generally using
being re-engineered across the organization and maybe also across the
air cargo and used for small parcels. With a better information flow, end
full supply chain with partners. Logical steps with increasing complexity
to end through the supply chain, the forwarding industry could drasti-
and increasing benefits to be gained. In a digitized integrated SCM
cally narrow down the service gap to the integrators while maintaining a
world there is no need to wait for a document to be completely ready
more diversified offering.
to exchange some of its information. A forwarder can start the planning process, having a destination address and a rough idea about what
From EDI connections to the Internet
will be transported, making the planning process more pro-active and
We believe that the SCM information flow in the future will be open,
interactive.
distributed, easy to integrate with, and providing information in near
we noticed that many documents existed in many shapes and forms
economically viable already today. In a way very similar to Ericsson’s
but most of the information was repeated across the documents. We
core business market, mobile telecom and Internet. Thanks to global
also saw that the differences between the modes of transport were
standards and cooperation it is possible to use (mobile) devices all over
much less than most had anticipated. When the information is available
the world and exchange information with anyone in the world without
digitally, documents can be created and printed on demand, and when
integration efforts or the need to have a prior established relation with
adapting to a digital world, you rather display the information where
each other.
needed than print it on paper.
The information flow of the future should be open to all players in
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Looking through the documentation, used in our own supply chain,
real-time. We see such an information flow is technically possible and
At Ericsson, working with telecommunication, we see technologies
supply chains like internet is accessible for anyone today. Information
such as Bluetooth, Narrowband, Low Power Radio and future 5G com-
will flow instantaneously to relevant partners and IT systems in a
bined with IoT enabling totally new ways of working in many industries.
controlled way. Internet based technologies will be used for information
People and many vehicles in the supply chains are already today con-
exchange rather than EDI connections. Today Ericsson maintains around
nected to the internet, as well as some of the freight also. This is only
500 EDI connections and data integrations with partners. To effectively
the beginning of a trend towards every item shipped being directly or
exchange information with all our supply chain partners we calculated
indirectly connected
that we would need at least 10,000 connections. We also realized that
In a digitized SCM, information from different sources will be corre-
most current connections have a limited scope and that we would like
lated and made available for relevant parties. Information on the journey
to hook on new partners faster, than we are technically capable to
of a box can be enriched for example with temperature information
build EDI connections. In addition we see a need to connect new data
from the truck’s, GPS information from an IoT device on the pallet and
sources, such as Internet of Things (IoT), 3rd party fleet and work force
scanning events from any of the handlers on its journey. Information will
management systems. This situation is not unique for Ericsson. To be
be exchanged between parties who have no contractual relation with
able to communicate and to improve our supply chains the key word is
each-other and who even does not know each other. Current vertical
collaboration with at least two modes of transport involved each time.
information stovepipes will be migrated to horizontal information ex-
We also need to collaborate with many more players once you add in
changes across all players in the supply chain. EFFEKTIVITET NR. 3 2017