Documents in the Supply Chain

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Documents in the Supply Chain

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The bottom line is that the global supply chain is crying out for document automation, and recent advances in AI, particularly IDP, are a perfect fit here, but nobody has heard their cries.

Last week, I had the pleasure of speaking on AI readiness and digitization at a CSCMP supply chain event in Ohio; I love supply chain stuff and have long waved the flag for the sector here at Deep Analysis. That said, it’s not a topic of interest to our clients until recently. The consensus seems to be that the supply chain industry was the most overlooked and misunderstood of sectors until the tragedy of COVID-19 hit, and supply chain discussions dominated the news cycles. Interest in the supply chain, outside of the supply chain itself, is pretty recent.

To give it some perspective, the supply chain industry in the US alone is estimated at around $30B. Though our first thoughts go to the containers, cranes, and ships, one of the biggest costs and overall burdens of running the supply chain is good old paperwork. One illustration of the scale of the problem I would like to give goes as follows. The world’s largest container ships have a capacity of over 24,000 TEUs (containers). An educated and conservative guestimate of the paperwork associated with each container is 100 documents (bills of lading – certifications – import/export documents, etc.). That’s an enormous number of documents. Yet, the document management and automation sector has seldom given the supply chain a second glance; instead, it prefers to focus on the same old sectors, such as financial services, legal, and pharma. Or, to put it another way, it’s an enormous lost opportunity for technology vendors.

That’s not to say the opportunity is simple to grasp. The problem with the supply chain as a target market is that it’s a chain; multiple parties exchange documentation along the path from an original manufacturer through 3PLs to the end location. Over the years, many start-ups have tried and failed to enter the supply chain sector, with good ideas and technology falling flat as one link or another in the chain refuses to engage. At Deep Analysis, we have done several projects focused on the supply chain, but I think we will be doing many more over the next few years as our clients frequently ask about and explore possibilities. That’s a good thing for all concerned; we all depend on an efficient supply chain, and it’s bigger, growing faster, and ironically more fragile than ever before. Think about trade issues with China, the Panama Canal’s drought, or the recent tragedy at the Port of Baltimore.

Step inside a modern warehouse, and you will see AI and robotics as scale; step on board a container ship and see the most up-to-date IoT sensors and, in some places, augmented reality being used to aid maintenance and repairs. The modern supply chain is at the cutting edge of technology. Yet, it still depends largely on paper documents, and the digitization of documents often consists of little more than a bundle of scanned images on a shared USB. Reconciling complex and detailed documents is largely manual and incredibly costly. Though I suspect it’s an exaggeration, one shipping company executive told me that paperwork makes up over half the cost of their business. What is certainly not an exaggeration is that reconciling and managing documents is a huge burden. The bottom line is that the global supply chain is crying out for document automation, and recent advances in AI, particularly IDP, are a perfect fit here, but nobody has heard their cries. It’s a complex, difficult, and dynamic industry to understand, let alone sell to, but the sheer scale of the opportunity should be well worth the effort. Oh, and if you are interested in figuring out how to design solutions and get a foothold into navigating the supply chain sector, then naturally, you should be speaking to Deep Analysis 🙂

Finally, a big thank you to CSCMP members Dave Teeple and Tierra Hayes for inviting me to Ohio to speak at their event. It turned out, unexpectedly, to be very timely after my time earlier in the week in Silicon Valley discussing supply chain opportunities with technology vendors; hopefully, we can get both sides engaged more often and make some much-needed progress.

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