Have you ever given a thought to how data-driven insights could have helped businesses forecast and prepare for disruptions well in advance? If not then with this article, you’ll come to know about how important a role interoperability plays in the entire Supply Chain. Unpredictable events around the globe like Covid-19 can be the root cause of many disruptions in a supply chain.

The Supply Chain Industry was the worst impacted sector in the pandemic. With empty shelves and shipping delays, the pandemic has demonstrated how fragile our global networks and supply chains are. Without a doubt, it has put the world’s supply chain leaders’ innovation, robustness, and adaptability to a real test as here lives of billions of people were at stake.

Types of Disruptions in Supply Chain

Before getting into the concept of interoperability, let’s try to understand the scale of the problem it is solving. Since we started our discussion with Covid-19, we’ll analyze the disruptions that were caused due to it. One of the major concerns was demand fluctuations. On one side, we saw a heavy drop in demand for crude oil as travel restrictions were implemented throughout the world while on the other side there was a demand surge for commodities related to health care like hand sanitizer. When nationwide lockdowns were announced, people started buying commodities more than what suppliers actually planned for.

Another major problem was reduced productivity. For a company, there are a lot of bottlenecks like employees, equipment, suppliers, manufacturing partners, etc. Pandemic created an environment of stress, anxiety, fear and uncertainty among the employees impacting their physical and mental health. Also, there were a lot of restrictions imposed by the government on the operations of industry, which ultimately lead to a decline in productivity.

During COVID-19, we also realized the importance of cold storage. Globally, there was a rise in demand for temperature-sensitive drugs and to retain their functionality till they reach the beneficiary, the cold chain played a very crucial role. Failing to accurately monitor the temperature of drugs can lead to their performance degradation and wastage. As per WHO, “1 out of 4 vaccines get spoiled in the supply chain”. Lastly, almost every type of industry was adversely impacted by the disruptions caused in China. For instance, the release of new versions of the iPhone was delayed as a memory chip and iPhone case production ran into problems at Chinese companies.

How Interoperability will Minimize Disruptions in Supply Chain

With the advent of Industry 4.0, businesses are incorporating cutting-edge technologies like the Internet of Things(IoT), Artificial Intelligence, Cloud Computing and Machine Learning into their operations to enhance automation, productivity and customer satisfaction. But it is high time that we look into the greater picture. Supply chain actors are restricting their opportunities by utilizing only a part of the data generated in the entire supply chain.

With interoperability, stakeholders can achieve complete visibility of all the operations taking place in the supply chain. This will help them rightly identify the problems in the supply chain and also enhance the efficiency of the existing operations. For instance, real-time data sharing enables the manufacturers to accurately predict the demand which enables them to efficiently plan their production and maintain an optimum level of inventory.

There are many benefits of interoperability and depending upon respective objectives and priorities, companies have a different way of utilizing it. For example, if we consider the manufacturers, their primary concern would be regarding the condition in which their product is being transported, but at the same time if we consider retailers their concern would be regarding stock management in accordance with demand fluctuation.

It is also important to understand that interoperability does not serve equal value to all the entities in the supply chain. So while forming a partnership, you’ll need to make sure that the data exchange should be in the interest of both parties.

Challenges Faced in Data Sharing

Trust is one of the biggest challenges in data sharing. When we consider interoperability, one cannot avoid issues regarding data confidentiality and accessibility, accuracy and reliability of shared information, incentives and most importantly, the ability to derive actionable insights from a huge pile of data generated in the supply chain every day.

Concerns about information privacy may be one of the key obstacles to interpersonal information sharing. They’ll have to make sure that the shared data couldn’t be accessed by their competitors or unauthorized body. Hence it is important to have a reliable network where people may exchange information.

Also, it has been observed that it takes time and effort for contributors in a supply chain to learn how to use IT systems. Utilizing user-friendly tools could enhance knowledge sharing. An ineffective and non-appealing system would have a detrimental effect on information sharing.

How to Share Data While Ensuring Security

With the introduction of blockchain in the supply chain, the majority of the concerns mentioned above are resolved. Blockchain technology provides the transparency and visibility of not just immediate partner organizations but of the complete supply chain. It is the next evolutionary stage in the supply chain where the transfer of documents between trading partners would take place via digital means rather than paper-based processes. With the help of blockchain, one can track the product right from its origin to where it is currently present in the supply chain. A secure record of every transaction occurring for a product is created, providing a complete history from production through the sale.

The time delays, additional costs, and human error that are usually connected to transactions might be significantly reduced with the use of this robust technology. The risk of fraud is also minimized by fewer intermediaries and thorough records that help businesses in identifying the source of misconduct wherever it occurs. Now we know about the technology that we should be using in our supply chain to enhance interoperability but to know how we could use it to its best, visit our website

If you liked this article, you can also read our previously published article: StaTwig’s Cognitive Network

Also, have a look at what UNICEF has to say about StaTwig