Predictions for removing frictions in 2018
It’s that time of year when the Internet comes alive with recaps of the past year and prognostications for the coming one, and while there will be challenges, by all accounts the forecast is looking bright in the ongoing fight against P2P friction. From e-invoicing to purchase order services, from analytics to invoice financing and beyond, AP and AR departments who have made the commitment to fighting friction will be well equipped to streamline their processes in the coming year.
For the rest of the supply chain, advances are in the works as well, although there are challenges, too. Michael Gravier, in a recent 3-part forecast for Supply Chain Management Review, touches on a few issues with implications for supply chain friction in the coming months.
Gravier cites the reduction of uncertainty as a likely area of focus in 2018, because of the ongoing importance of information in global supply chains, and perhaps incidentally, because of recent corporate scandals regarding data fabrication. Tracking shipments is one area where uncertainty creates friction, similar to the friction caused by uncertainty in manual invoicing processes. These areas are particularly subject to the benefits of online automation as users of Tungsten Network’s ISS (Invoice Status Service) can attest. By providing trading partners with better intelligence around their shared activities, whether those involve shipping, invoicing or procurement, it’s clear that digital transformation will continue to evolve the way supply chains monitor the flow of goods and capital.
The need for certainty goes hand in hand with an increasing demand for transparency. Pressures to implement technologies such as ELS (electronic logging devices) to enable better visibility will continue to mount in the coming year, in spite of the expense: “Companies may balk at the short-term costs, yet multiple benefits to security, environment and the bottom line argue that failing to act may be the greatest risk of all.”
Moreover such technologies, Gravier argues, allow businesses to take the lead in regulating their supply chains: “It is also a powerful way for industry to integrate and coordinate with companies which make the most sense for them, instead of depending on volatile political processes to develop global trade treaties.” Regardless of where uncertainty is reduced and visibility increased, the effect for supply chain relationships is the same: increased trust between trading partners, governments and the public.
Just as paperwork is being removed from the invoicing process thanks to digitization, it’s also disappearing from shipping, with that trend poised to accelerate, thanks in part to the exemplary path blazed by Amazon. The Internet giant is now applying its expertise in automation to freight forwarding and trucking, and making a convincing case for the power of automation to take the friction out of shipments. One result is its app, Relay, which enables truckers to get in and out of warehouses faster using QR code check-ins instead of badging through security.
Businesses’ increasing need for speed has been balanced by a culture around compliance, driven by intransigence, which has tended to act as a drag on forward progress, argues Gravier. The indubitable benefits of digitisation, however, mean that industry will need to take a more active role in helping to shape standards that determine how businesses interact with other businesses as well as with governments.
Regardless of the paths taken to friction removal in the coming months, time will be the differentiator within most industries, with those businesses that act faster to digitize their technologies in a much better position to succeed in the long run.