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Supply chain visibility technology has benefits for SMEs

GS1 Australia says new technologies can help improve operational efficiencies in logistics


GS1 Australia is confident that end-to-end supply visibility in supply chain can bring operational efficiencies across small to medium enterprises (SME) in the transport and logistics sector.

GS1 tested its new technology based on GS1 global data standards (GDS) through pilot programs at Toll Group, Arrium OneSteel and Nestlé.

The results of the study formed an Australian Logistic Council-backed study, Investigating the potential benefits of enhanced end to end supply chain visibility, which was released in the presence of GS1 Australia senior manager – trade, transport & heavy industry Bonnie Ryan at the ALC Forum last week.

The report examined the challenges associated with implementing a common standard across SMEs that operate different information management systems with varying degrees of complexity with their supply chain partners.

The study reveals while larger companies are expected to gain immediate benefits from the application of these technologies, SMEs will see cost and efficiency benefits in the longer term.

Using GS1 Australia’s supply chain visibility technology, SMEs can “standardise operations in an easy and cost-effective way”, Ryan tells ATN.

“We understand that small operators deal with many bigger operators and the jobs can be streamlines using digital technologies, which means SMEs will spend less time doing administrative tasks, less time reconciling, and reduce their payment times as a result.”

Ryan says one of the key criteria during the development of this technology was to consider the needs of small businesses.

The steering committee was “mindful of SME concerns” and realised that the technology will not have the desired benefits to the industry if the small operators were left out, she says.

Small businesses “dominate” the Australia T&L sector but many of these businesses have limited capabilities to deliver supply chain visibility in a cost effective way, as a result they are more vulnerable to be excluded from contracts that requires these capabilities, the report notes.

“Participation in digital business will be stymied if smaller logistics service providers are not capable of providing visibility of supply chain events in a cost-effective way,” the report states.

“SMEs require a specific demonstration of business value and suitable generic solutions to be available.”

Due to the inability to integrate incompatible formats across their businesses, SMEs in transport and logistics see combined productivity ‘penalty’ of over $1 billion each year, she says.

The cost to integrate these businesses to a common standard is estimated to be just over a quarter of that amount.

Austroads reports highlights that industry adoption of data standards will be “best achieved” through a dedicated supply chain visibility strategy led by customers and logistics providers and not mandatory introduction through government regulation.

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