The supply chain industry is a massively fragmented market crying out for consolidation and digitalization. It is a multi-billion-dollar market that is still today extremely manually oriented and in desperate need of automation and seamless data connections across countless applications and stakeholders. Replacing old systems, which is the root cause of problems, is out of the question for the majority, so therefore data aggregation and single entry platforms (which I will elaborate further at the end) are the most logical solution to update the industry to the 21st century.
In our earlier blog - “Automate port and terminal data pipelines using Youredi iPaaS”, we discussed data connectivity challenges that are troubling the maritime industry. In this week's blog, we will elaborate the issue but with a focus on data aggregation – what it actually means, what are the benefits and possibilities and also on why data aggregation can be extremely difficult to implement.
In general, Data aggregation means that data is gathered and then expressed in a summary form. Data aggregators typically provide services for collecting, processing and presenting aggregate data which can be used to support business strategy decisions and optimizing operations by automating processes. As a modern integrator company specialized in bridging the gap between legacy and modern systems, we will take the concept of data aggregation a step further and explain how it can be aligned with the supply chain industry.
A supply chain is a gigantic puzzle consisting of various stakeholders and applications. The data is typically siloed and has to be gathered from multiple sources for aggregation. For example, within port communities there are hundreds of applications operating independently and not interconnected to the Terminal Operating Systems and Port Community Systems. Let’s look at the positives first. The digitization efforts that have already taken place have exponentially increased the amount of operational data and many companies are already leveraging this data on many fronts, at least to some extent. On the negative side, the data is not available and accessible to everyone who would benefit from it, which would obviously improve the efficacy of the entire supply chain ecosystem, especially the logistics part of it.
This problem is not going to be solved by one solution provider, because there is just so much data and so many stakeholders, but rather by a joint effort of the community and a push from shippers to demand better quality services such as ETA predictability and real-time visibility to the shipments in transit. Industry newcomers are utilizing modern technologies and the established players are stuck to their legacy technologies. The data that these stakeholders generate through their operations has not only increased exponentially but has also become a commodity – something that can give the stakeholder a competitive edge towards its competitors. Understandably everyone is very watchful with whom they share their data with, and the data ownership concept plays a big part in the industry’s connectivity woes.
For shippers, carriers, forwarders, warehouses, ports and terminals and everyone who touches the shipment in the supply chain, data aggregation, enrichment and harmonization are by far the most cost efficient and realistic way to addressing the data credibility and connectivity problems. The introduction of new standards will certainly alleviate the problem but don’t be fooled to thinking that any of the standards will reach wide adoption levels anytime soon as such transformation would require significant investment with no guaranteed ROI.
A single window (SW) concept and a single-entry platform is an interesting topic aligning well with data aggregation, so it is well worth mentioning in this blog. If you don’t already know, “a single window is a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfill all import, export, and transit-related regulatory requirements.” The SW concept was originally intended for streamlining business-to-government (B2G) messaging and automating procedures such as obtaining permits and licenses, certificates and necessary approvals, customs clearance, and port exit but in a similar fashion the concept can be implemented in a business-to-business environment.
If implemented effectively, a Single Window B2G project can achieve the following benefits.
- For the government as a whole: an increase in government revenue, enhanced compliance with rules, improved efficiency in resource allocation, better trade statistics
- For economic operators, such as traders: faster clearance times, a more transparent and predictable process and less bureaucracy
- For an administration such as Customs: improved staff productivity through the upgraded infrastructure, increase in customs revenue, a more structured and controlled working environment, and enhanced professionalism
- For the national economy as a whole: improved transparency and governance and reduced corruption due to fewer opportunities for physical interaction.
Unfortunately, the data validity issue that constraints the supply chain industry remains unanswered with the single window concept introduced a decade ago. One of the reasons for very slow adoption is certainly the fact that parties involved would have to be able to generate standardized information and documents to match the requirements of an SW.
Adapting to different stakeholders’ technologies in order to communicate with them doesn’t happen overnight and apparently not even in a decade. The obvious solution would be a transformation tool that can quickly and cost-efficiently transform any information and documents to match those standard requirements. A modern integration platform could easily be utilized to run alongside a SW and harmonize data from multiple different sources. This, in turn, would quickly increase the number of parties within port communities and other similar ecosystems to start utilizing a single window and help create a much more efficient trade environment that it is today.
The more data-driven rules and standard requirements there are in place, the slower the community will reap the benefits. Data aggregation is proven to be among the top priority initiatives within port communities but still the results are very vague, as exchanging standardized information alone is an impossible task for most stakeholders.
A modern cloud-based integration platform will enable any stakeholder to connect to a SW, regardless of what technologies they are using. Even if the data is scattered across multiple applications and customized systems, an iPaaS can be used to extract, aggregate, enrich, validate and transform it and enable seamless connectivity with any system in B2B or like in the original SW concept, B2G.
If you have any question regarding connection to a single window or the benefits your company can enjoy using modern iPaaS solutions, do not hesitate to contact our integration experts.