Global supply chains face efficiency crunch

The automation of supply chains in many major industries around the world has led to a dilemma - the move is seen by most organisations as unavoidable but it is commonly plagued by inefficiencies.

Users have said that various technologies and standards have come to hinder progress.

Research was carried out by Quocirca who did 400 interviews in France, Germany, the UK and the US.

Eighty per cent of respondents said they have electronic data interchange (EDI) or internet-based systems for automated transactions but claimed complexities have limited their actual use.

Clive Longbottom, senior director at Quocirca, said: "Even when organisations have agreed they will use a certain standard, it's often the case of which dialect they will use."

With EDI there are standards such as Accredited Standards Committee (ASC) X12 and the United Nations (UN) Edifact, with each moving towards using eXtensible Markup Language (XML), leading to ebXML and xCBL.

There are then vertical variations on EDI, including Hedna, Mismo and IFX, as well as other popular mechanisms in place - well-known data protocols such as FTP, SMTP and X400/X500.

Even with that, Longbottom said companies rarely fear automation but can suffer from a lack of familiarity with what's needed.

One fear is that supply chain automation problems could lead to poor accountability and a dearth of information - or accurate information - in the face of more stringent governance and compliance.

Another issue is the degree to which customers or suppliers mandate certain supply chain automation. In the US, retailer WalMart famously exercised its muscle and called on its suppliers to start using RFID tagging technology. Quocirca found a degree of 'the customer is always right' in its research, with 40 per cent of respondents saying a supplier mandate would make no difference to their approach to electronic trading.

Interviews were carried out across retail, automotive, financial services, manufacturing and high-tech but Longbottom said "feelings were overall pretty similar" in each vertical sector.

The research was commissioned by GXS.