Greg Johnsen, co-founder and executive vice president of marketing at GT Nexus, argues the case for streamlining supply chain communications for efficiency in the cloud

Greg Johnsen, co-founder and executive vice president of marketing at GT Nexus, argues the case for streamlining supply chain communications for efficiency in the cloud

Where would we be without standards? As retailers coping with global trade and distribution networks know only too well, when it comes to business-to-business communication, especially across country borders and time zones, standards are very scarce indeed, according to Greg Johnsen of US-based web-based logistics management data platform provider, GT Nexus.

“And yet, in a typical international supply chain, timely, clean, reliable, readable information is crucial,” Johnsen said. “That container of shoes travelling halfway across the world, from factory to retail shelf, comes with a shadow stream of information provided by multiple partners in the supply chain. No single one can deliver this information stream in its entirety. The stream is a collaboration, a campaign across partners and time zones. Getting all of this data into one common, easily interpretable form that can be put to use by any participant in that supply chain is a tall order indeed.”

Too many vested interests

Johnsen asked: “So why don’t we all just agree on a set of data standards for international trade? The trouble is precisely the size and complexity of the business – no one organisation or company has the clout to force standardisation. Look at the attempts by Wal-Mart, the biggest company in the world, to move all its suppliers to radio frequency identification (RFID) tags. It has only partially worked. Furthermore, efforts by international trade bodies such as the International Chamber of Commerce (ICC) and International Organisation for Standardisation (ISO) have resulted in several competing standards for electronic communications. Even the titanically influential Thomas Edison was only able to bully his home country into accepting his standard for electricity voltage. The truth is, standards are not going to come about by anyone imposing them, and we’re not going to be speaking the same business code any time soon.

“What we need, essentially is a global trade translator, but this was a distant dream until very recently. It took the Internet to make it possible. Global, ubiquitous, and “always on,” the internet has emerged as the de facto communication platform among businesses. Today, technology platforms in the ‘cloud’ take advantage of the ability to hold information in a common area, and distribute it in any format needed. They do the job of not only connecting partners, but of translating the data of those partners so the entire community gains a universal language through which to conduct trade more efficiently. It’s a lot like Facebook for business,” Johnsen suggested.

Hiding complexity in the cloud

“Here’s how it works: You can sign up for an online data management platform without any big financial commitment. For some basic transactions, such as simply sending and receiving booking instructions to ocean carriers, this service can be free. With the cloud-computing model, data feeds come from your company’s computers and return to them, but the aggregation of data (and crucial standardisation) is handled centrally on the platform’s servers. You pay only for as much data processing as you actually use, and you don’t have to spend a lot of time installing and maintaining a software package on your own hardware: the code is elsewhere. You simply feed the relevant data to the platform and get back the information you need, in the format you need it.

“Meanwhile, through the online platform, you’re connected to thousands of other companies involved in international trade, who are all exchanging data with the cloud platform in their own format. Partners must be able to provide information in the format they know and prefer, without worrying about standards. Data is standardised so that it’s in a form that can be matched up with other information relevant to the same transaction, packaged together, and then translated back into the form you need for compatibility with your in-house system

“It turns out that you don’t have to force a standards mandate on your trading partners to get the benefits of standardisation in global trade. Cloud computing means you simply need a data management platform that links you to your business community, and the will to use it to your advantage,” he concluded.