Supply Chains Issues Could Be Alleviated With Better Data, Experts Say
Global supply chain issues could be alleviated with better data sharing and processing, experts said during a June 29 meeting of the Advisory Committee on Supply Chain Competitiveness. But to overcome trust issues among companies reluctant to share data, some government intervention may be necessary, they said.
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Hau Lee, professor of operations, information and technology at Stanford University, advocated for the sharing and processing of trade data. Gene Soroka, executive director of the Port of Los Angeles, called for "end-to-end" supply chain data sharing, which could potentially cut down on bottlenecks and wait times as well as identify things like raw materials shortages before they occur, he said.
While some trade data is available for analysis, companies are often reluctant to share data because proprietary information could put them at a competitive disadvantage. "It would be a lot more useful if [trade data] was more granular," said Willy Shih, professor of management practice in business administration at Harvard. "The tension around microdata is that it gets very close to proprietary information." In order to overcome that trust gap, a third-party organization would need to be entrusted with that data before processing and disseminating aggregate statistics back to the industry, Lee said.
Such a system could be incorporated into the Department of Transportation or Commerce as part of President Joe Biden's focus on supply chain issues. "The U.S. is unusual in that we don't have a federal supply chain office," Secretary of Commerce Gina Raimondo said in her address to the committee. The bipartisan Innovation Act will create a national supply chain office, which could be the national hub for supply chain data, she said. "We are trying to implement a deliberate industrial policy in this country," said Brian Deese, director of the National Economic Council.
Although largely designed for small and medium-sized companies, data sharing has potential benefits even for the biggest players. Nobody has a large enough share of the market that they can internally do what we would like to do, said Lee, who has talked about the issue with Flexport, a supply chain management company. "Even Maersk, which is the largest shipper, doesn't know much about surface transport, so they could benefit," Lee said in an interview.
Small-scale examples of data sharing and processing at the industry level already exist. The American Transportation Research Institute already is handling logistics data for around 80% of American truckers, Lee said. The semiconductor industry already shares logistics and inventory data because of public pressure from the semiconductor shortage and due to the high cost of capacity building. The pharmaceutical industry also cooperated on supply chain issues in developing and rolling out COVID-19 vaccines. On a government level, the EU already coordinates shipping and trucking availability between some of its major ports.
Lee hopes that selected “critical industries” are more likely to create their own data networks out of non-profits or industry associations. If those succeed, he says, they can be used as evidence to pitch national logistics data processing to the federal government.