May 2008 | Commentary | Supply Chain Security

Technology Standards Hold the Key to Security

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Since the advent of globalization, logisticians have sought a technology that provides real-time tracking of goods, documents, and information across supply chains.

Considered a luxury for many years, the development of a Supply Chain Technology Standard (SCTS) has become an operational mandate to meet the need for heightened security.

Unfortunately, no single technology creates real-time, end-to-end visibility of the international movement of goods.

Today's global supply chains are often physically fragmented and technologically disconnected. Deploying a global standard to monitor cargo flows via Radio Frequency Identification (RFID) and adopting a barcode to flag corresponding documentation will create the visibility necessary to enhance supply chain security.

Creating and implementing this solution requires a cooperative effort among government, business, and academia.

Big Plans

Admittedly, the technological, financial, and infrastructure requirements of such an endeavor are daunting. From a commercial perspective, however, it becomes clear that the investment will not only reap security benefits, but also increase supply chain productivity.

Greater visibility allows for forecasting, planning, and execution improvements, all of which drive down inventory levels, carrying costs, theft, product obsolescence, and lost sales opportunities.

Also, an SCTS will eliminate the need for supply chain participants to manually update proprietary and redundant tracking systems, creating efficiency enhancements not seen since desktop computers were introduced. Port, airport, truck, and rail facilities would enjoy cargo velocity increases through more efficient asset use and bottleneck reduction.

Despite the security and productivity benefits of adopting a global standard, companies will need further enticement to forego existing technologies and invest in an SCTS.

First and foremost, economies of scale have to be reached to make the use of RFID financially possible. Governments can accelerate implementation by offering tax credits on investments in related software, hardware, and training; giving preferential duty treatment to participating countries; and reducing processing fees to importers that adopt the technology.

The good news about this endeavor is that a lot of work has already been invested in creating a global technology platform. Next, that knowledge - found in universities, government agencies, non-profits, and international organizations - must be brought to the project.

This resource-sharing requires forming a coalition with technological and organizational representation from all areas of the global supply chain infrastructure. With a multi-country steering committee in place, this coalition would be charged with selecting, deploying, and managing the SCTS.

The Internet Model

It would serve the consortium well to model its development efforts after the approach taken by the founders of the Internet.

A matter of historical record, the Internet's success can be attributed to the selection of a packet-switching technology known as Transmission Control Protocol/Internet Protocol (TCP/IP). Universal acceptance of this standard was born of a collaborative effort among government, business, and, especially, academia.

The technology is in place, the talent exists, and the playbook is available to bring the SCTS to fruition. What remains to be done is assemble the team and establish the rules of the game.

If that can be achieved, the social and commercial impact of such an effort will be surpassed only by the birth of the Internet.

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