Three Reasons Why Supply Chain Transactions Demand Data Integrity Assurance

by Chuck Preiss
Director, Solutions Enablement
Axway

Marco Polo operated a global supply chain in the 13th century, and he did it successfully, centuries before there was any data, period—let alone data whose integrity needed assuring. So why is assuring data integrity so important now?

Marco Polo operated a global supply chain in the 13th century, and he did it successfully, centuries before there was any data, period—let alone data whose integrity needed assuring. So why is assuring data integrity so important now?

The importance of data integrity in the supply chain is a mystery to some folks. After all, Marco Polo operated a global supply chain in the 13th century, and he did it successfully, centuries before there was any data, period—let alone data whose integrity needed assuring.

So why is assuring data integrity so important now?

There are several reasons.

The first one is cost. There are folks out there who waste a lot of time in the supply chain with invoicing and ordering problems due to data issues. For instance, I’m Company A and I send out an invoice to Company B, and I’m missing ship-to or bill-to information or I have wrong pricing. Company B’s system is going to kick the invoice back and I’m not going to get paid. And I’m not going to know that kickback happened until my accounts receivable people come to me and say, “Hey, this invoice is past due. Why didn’t Company B pay it?” Then my people have to perform some serious research to find out what happened—a real cost issue. Cost, of course, runs just about everything in the supply chain, but sometimes, it actually creates panic (i.e., “I need to have this inventory here at a certain date and time. If I don’t, I’m going to have a stock-out situation that could cost me money or customers.”)

The second reason is relationship management. Manufacturers, retailers, transportation, logistics folks—they’re all trying to have a kind of win-win relationship, to have everything run smoothly. The only way they can do that is to hold supply chain folks accountable. If I’m a retailer, I want my manufacturer to send me his shipments on time and I want that to happen to the five nines level; the only way I can measure that is to track all of his shipments and create trending information. That way, I can rest assured that he’s satisfying his service level agreements with me. (Not that I want to necessarily charge him for late shipments, but the point is this: the more we can both become more efficient—the more my manufacturer can meet my demands and I can hold him to it—the better.)

The third reason is visibility. Companies often don’t even know that they’re having these problems. They send out invoices. They’re hoping they’re getting to the other end, hoping they’re right, hoping their customer will pay them. But the only time that they know that something’s amiss is when their accounts receivable department says, “Hey, we’ve got a problem. So-and-so hasn’t sent us payments on the last hundred invoices.” Once again, the company has to figure out what the problem is. However, if you add the visibility piece to it—say, a technology like business activity monitoring—a company can proactively, before the shipment leaves the enterprise, check the invoice file and ensure the information is accurate. If they’ve found a problem previously, they can set up a rule to catch that problem before it happens again.

That’s the true strength of these technologies. It’s not about dashboards. It’s not about “here’s what my business is doing right at this very moment.” It’s about cleaning up information and allowing the whole process to run better. Marco Polo didn’t have it, but if he was doing business today, he almost certainly wouldn’t allow his supply chain to run without it. Why should you?

(Image in the public domain: http://en.wikipedia.org/wiki/File:Marco_Polo_portrait.jpg)

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