Data connectivity is at the heart of any good logistics network. Because logistics needs to work with multiple organizations to store, manage, transfer and transport goods, excellent data communication is essential. This information is reviewed and shared to ensure the efficient flow of goods through the supply chain.
There are many ways to connect and share information across and between logistics functions and third parties, including API, EDI, TMS, IoT, chatbots, RPA and email. We’ll explore what the main data transfer methods are used for and the benefits and challenges of each.
1. Application Program Interface (API)
An application program interface (API) is a customized way for a logistics application to send, receive and transfer information with other supply chain applications with no human involvement. APIs are specially coded to allow different applications to communicate logistics data so that both applications can understand and use that information. APIs are used extensively in the supply chain to transfer many different types of data between different supply chain software platforms.
Benefits of Using an API
- APIs are fast with supply chain data transfers ranging from sub-second to a couple of seconds.
- APIs use customized data communication that can be used by other logistics applications, resulting in structured, predictable and actionable information transfer.
- APIs are generally reliable and avoid issues with duplication or human error.
- APIs integrate with many supply chain platforms.
Challenges of Using an API
- APIs need to be specially coded for applications, which can be a significant development overhead and cost.
- APIs only work if all the supply chain applications involved in sending, receiving or transferring data allow APIs to be used.
- Unregulated or badly-managed changes to an API can break data communications with other applications.
2. Electronic Data Interchange (EDI)
Electronic data interchange (EDI) uses similar principles to API, with one important difference—APIs are customized ways to send and receive data, whereas EDI uses an agreed-upon standard to transfer information between supply chain businesses and logistics applications. Like APIs, EDI is used for many different types of logistics data and use cases.
Benefits of Using EDI
- EDIs are fast with logistics information being transferred in moments.
- EDIs use a standardized data communication and format that can be used by any other logistics application that also uses that format.
- EDIs are reliable and avoid issues with human error or duplication.
- EDIs integrate with many supply chain platforms.
Challenges of Using EDI
- Both applications transferring data through EDIs need to use the same EDI format.
- Developers must ensure that supply chain applications are using the right EDI transfer protocols and versions.
- EDIs only work between applications specifically setup to use this type of data transfer.
3. Transportation Management Systems (TMS)
A transportation management system (TMS) is a type of logistics platform that is used to plan, manage and optimize logistics operations and the physical movement of goods. A TMS can be part of a larger supply chain platform and they are ideally used to schedule, track and streamline the flow of goods in the supply chain.
Benefits of Using TMS
- TMS platforms work off of a common, central data and application framework, meaning that data updates are almost instantaneous.
- TMS platforms are often integrated with other supply chain platforms and applications through EDI or APIs.
- They are specially designed for logistics purposes including order management, warehouse management and fleet operations.
- TMS platforms can also parse data from IoT devices.
- They can be upgraded by the vendor behind the scenes, with users getting new features and benefits immediately.
Challenges of Using TMS
- All users of a TMS need to be on the same platform or an integrated application.
- A TMS is specialized to specific logistics and supply chain needs, so it’s important to understand the feature set.
4. Internet of Things (IoT) Devices
Internet of Things (IoT) devices provide useful data to track the position and storage conditions of goods throughout the supply chain. They are typically used as GPS locators and monitoring tools.
Benefits of Using IoT Devices
- IoT data allows the location and condition of goods to be tracked throughout the supply chain.
- IoT data can be automatically uploaded into supply chain platforms for real-time updates.
- IoT data can be reviewed and optimized to streamline logistics operations.
- IoT devices can help with troubleshooting and locating delayed or lost shipments.
Challenges of Using IoT Devices
- IoT devices depend on good remote network connectivity to function well.
- They may not work in areas with lots of electrical or radio frequency interference.
- IoT devices must be installed and handled properly.
Chatbots are an effective way to gather information that needs to be provided by humans. They use a combination of guided interviews, natural language processing and machine learning to gather information that’s not easily accessible by other means.
Benefits of Using Chatbots
- Chatbots provide a natural and intuitive interface to collect supply chain data from users in a manageable, easy way.
- Chatbots can work across different countries and cultures, using automatic translation to remove language barriers.
- Supply chain information from chatbots can be parsed for important information and fed into other applications for further processing.
Challenges of Using Chatbots
- Some users will need to be trained to use chatbots, especially if they’ve previously been providing information in a more structured way.
- Chatbots often need to be trained or customized to particular use cases which requires a detailed understanding of how to gather specific supply chain information from the user
6. Robotic Process Automation (RPA)
Robotic process automation (RPA) lets an organization create and deploy software bots to automate and optimize the flow of information within and between supply chain organizations. These bots use artificial intelligence and machine learning to copy human tasks and then carry out those tasks automatically, without intervention.
Benefits of Using RPA
- RPA can reduce or eliminate many administrative data tasks including the manual input and processing of purchase orders, inventory control or bills of lading.
- RPA can work with other supply chain data to automatically provide responses to expected questions including proposals, quotes and updates.
- RPA integrates with other supply chain organizations and systems for seamless, end-to-end automation, reducing human error.
Challenges of Using RPA
- RPA operations and data need to be carefully recorded and structured for optimal processing.
- RPA agents must be implemented carefully and tested rigorously to avoid erroneous outputs.
- Effective change control is essential, as alterations to upstream or downstream processes or data can cause issues for RPA bots.
It’s no secret that logistics communication is still largely paper-based, especially for the first and last miles of shipments. Email has helped to solve some of the issues with paper-based communication, and is now the most common form of online communication that there is. It’s also one of the most basic ways to transfer data, and although it’s easy to use and accessible, it does suffer from several issues when it comes to logistics and supply chains. Emails can be used to query shipment locations, raise purchase orders, share reports and for any other written logistics communications.
Benefits of Using Email
- Everyone has an email address and email software.
- There’s no specialized training or development needed.
Challenges of Using Email
- Manual querying and input of email information creates duplication.
- Entering data is subject to distraction and human error.
- Delays are caused by people not checking and responding to email immediately.
- Changes in data formats for various requests make emails difficult to parse.
The Bottom Line
There are many ways to manage and transfer data within and between logistics organizations, supply chain managers and other stakeholders. The optimal way to transfer logistics data ultimately will depend on your unique supply chain and organizational needs.
These information and communication technologies have one thing in common—they free up human resources, so employees can spend more time on adding value to the supply chain. Whether that’s a better customer experience, streamlining supply chain operations or developing new supply chain services, using technology for low-value tasks makes good business sense.
As AI, machine learning and other technologies evolve, transmitting, understanding and using data for supply chain management will become much easier. This will streamline supply chains, optimize operations and result in less human error and fewer wasted resources.
Learn how Blume Visibility enables air, ocean, rail and motor carrier connectivity (API, EDI, IoT, TMS, etc.) for comprehensive tracking of assets, shipments and inventory at rest and in-motion.