The advancement and proliferation of technology in the business world have created an era where immediacy is valued and expected. This makes real-time visibility integral to modern logistics and supply chain management solutions.
Companies need the ability to track and monitor the movement of goods and information across the entire supply chain instantly to enhance operational efficiency, customer satisfaction, and informed decision-making processes. However, the path to achieving seamless real-time visibility has its challenges. This article delves into these obstacles, providing insights into overcoming them effectively.
Challenge #1: Navigating the maze of data integration in real-time logistics
Integrating data from diverse sources is one of the most daunting challenges in implementing real-time logistics and supply chain visibility. This complexity is magnified when dealing with multiple systems and platforms, from in-house legacy to vendor-specific platforms and providers. Each source may use different data formats and exhibit varying levels of data quality, posing significant standardization issues and serious inefficiencies in workflows.
Moreover, the real-time processing of this data brings its own challenges. Companies often face latency issues due to network delays and the time required to process large volumes of data. Additionally, synchronization issues arise from inconsistent update frequencies, different dashboard needs, and the need for precise clock synchronization across different systems. And having a global organization exacerbates these challenges.
In a 2023 McKinsey survey, 37% of respondents cited a limited use of advanced planning and scheduling systems (APS), making decision-making and determining success metrics a challenge. Part of the issue is that too few companies handle master data. For example, a global shipping company might struggle to integrate real-time data from its fleet's GPS systems with the varying formats of customs data from different countries. This can cause a bottleneck in updating shipment statuses, affecting overall supply chain efficiency. As such, mastering data integration is crucial for companies aiming to achieve accurate real-time logistics visibility.
Furthermore, compliance challenges arise when data is transmitted between countries with different levels of privacy or data handling legislation. For example, the locations from where data is transmitted may not have the level of security requirements as the location where the data is processed and stored. This can lead to even more global supply chain compliance and logistics headaches, not to mention delays due to the latency issues mentioned above.
Challenge #2: Overcoming technology compatibility hurdles in logistics
A study conducted at the beginning of 2022 showed that most manufacturing and engineering companies still relied on outmoded legacy systems and manual processes. Without strategic intervention, the pileups would only get worse two years later. A critical obstacle in achieving real-time logistics visibility is overcoming technology compatibility issues. This challenge is twofold:
Firstly, integrating legacy systems that often operate on outdated technology
Secondly, ensuring interoperability between diverse systems, including mobile apps used by both customers and team members
Legacy systems, crucial in many logistics operations, may use outmoded communication protocols and have limited support for modern APIs. Retrofitting these systems often requires middleware solutions or significant hardware upgrades. For example, a logistics firm may need to integrate its decades-old warehouse management or enterprise resource planning (ERP) systems with new, cloud-based transportation management systems. This scenario demands substantial technological revamping and a strategic approach to maintain operational continuity during the transition.
Interoperability is another aspect that demands attention. Seamless communication across various systems, including cross-border compatibility, is essential for efficient logistics and supply chain operations. Adopting standardized communication protocols, like electronic data interchange (EDI) standards and API standardization, is crucial.
A real-world instance can be seen in multinational companies operating across different regions with varying standards and regulations. The challenge lies in creating a unified system that can efficiently communicate and exchange data across these diverse environments.
Addressing these technology compatibility challenges is vital for organizations seeking to leverage the full potential of real-time logistics visibility. It involves technological upgrades and strategically aligning various systems and protocols to ensure smooth and efficient logistics operations.
Challenge #3: Mastering scalability in real-time logistics operations
Scalability is a pivotal yet challenging aspect of real-time visibility in logistics solutions. The primary concern is handling increased data volumes during peak periods, such as holiday seasons for retail or e-commerce companies, which can overload systems and lead to tracking inaccuracies or delays.
Balancing speed and accuracy in system performance becomes crucial with rising data volumes. For instance, a logistics firm might struggle with its current infrastructure's inability to process information quickly and accurately during high-demand periods, impacting shipment updates or inventory levels to where they’re less than the “real-time” required for end users. In a time when real-time tracking is a “must-have” instead of a “nice-to-have,” this could seriously hinder profitability.
To tackle these scalability challenges, businesses must adopt a proactive strategy. This involves regular system evaluations, investing in scalable infrastructure, and implementing efficient data and inventory management tactics during peak times. Such measures ensure that logistics systems can support business growth and maintain operational efficiency, ultimately positively effecting the customer experience.
Challenge #4: Strengthening digital security in logistics networks
Real-world incidents, like the Colonial Pipeline breach, highlight the importance of security and privacy in real-time logistics systems. This event, where a major fuel pipeline operator fell victim to a cyberattack causing widespread fuel supply disruptions, emphasizes the need for stringent security measures. It underscores the necessity for encryption, secure data transmission, and robust access control to prevent unauthorized system access.
Such incidents demonstrate the critical role of security protocols in logistics. Ensuring data protection is not just about technology but also involves cultivating a culture of security awareness within organizations. This includes implementing strong user authentication and authorization procedures, especially when dealing with third-party vendors.
Learning from such breaches, logistics companies must balance advanced technological safeguards, like granularized access control, with employee training and awareness programs. These steps are vital to maintain the integrity of logistics networks and protect them against similar cyber threats.
Challenge #5: Supply instability due to geopolitical complications
For all of the benefits realized from international commerce, there are also several challenges that have rippling (and chilling) effects on trade and supply chains and have been the cause of several recent supply chain disruptions.
Due to ongoing factors such as geopolitical instability and the economic shock of a global pandemic, more attention has been given to supply chain resiliency, a concept that, while not a new one, has leaped onto the immediate agendas of both governing bodies and organizations of all sizes.
Supply Chain Resiliency is defined as the capacity of a supply chain to persist, adapt, or transform in the face of change. In other words, it’s not just about an organization’s ability to bounce back from negative events but also its ability to adapt, transform, move forward, and find success.
One key facet of supply chain resilience is real-time visibility. It enables teams to see and take action quickly to proactively manage any potential disruptions or shortages, regardless of the cause. So, in addition to diversifying vendors like shippers and raw material suppliers, organizations are looking for ways to achieve end-to-end supply visibility as part of their business continuity plans.
Charting the course ahead with PubNub
Navigating the complexities of real-time visibility in the logistics industry requires addressing key challenges such as data analytics and integration, technology compatibility, scalability, security, and privacy. Each of these areas presents unique obstacles and opportunities for growth and improvement. PubNub stands at the forefront of this journey, offering cost-effective building blocks to enable teams to add real-time features to supply chain and logistics visibility solutions.
Let us help you transform your supply chain management tool into a real-time supply chain visibility or logistics solution. Contact PubNub or start with a free PubNub trial today.
