June 27, 2016
Column | outbound

The other infrastructure problem

Most everyone is aware of the threat posed by our nation's decaying highway infrastructure to economic growth. But there's another infrastructure problem that shouldn't be ignored either.

By Mitch Mac Donald

The deteriorating condition of the U.S. highway infrastructure is decidedly not "breaking news." Quite the opposite. It is a decades-old problem that simply won't go away. Despite repeated calls for action—there have been over 20 commentaries on the problem on this page alone in the past decade—the nation's roads and bridges continue to crumble. Even the "wake-up call" that was the I-35 bridge collapse in Minneapolis on Aug. 1, 2007, wasn't enough. Nearly nine years later, the phone is still ringing and no one has picked up. One cannot help but wonder whether anyone ever will.

For roughly the same period that we've used this page to sound the alarm on infrastructure, we have also visited on multiple occasions the topic of technology and how it is changing the rules of the logistics game.

We all know that successful logistics execution in the 21st century is not just about the efficient flow of goods through DCs and over the roads, rails, and seas. It's also about the efficient flow of information. To function properly, a logistics enterprise also requires a swift and reliable infrastructure for moving data.

Based on a new report from two well-regarded academics, the IT infrastructure that supports that parallel information flow isn't in particularly good shape either. In a white paper titled "The Road to Profitability Is a Web Service Connection," Dr. Mary Holcomb of the University of Tennessee and Dr. Karl Manrodt of Georgia College & State University argue that fulfilling modern delivery expectations will require an overhaul of the freight transportation industry's communication infrastructure.

To swap freight information, shippers and carriers have traditionally relied on EDI (electronic data interchange), a communication system that dates back to the end of World War II. Though it has undergone refinements during its nearly seven-decade history, EDI is now showing its age, the authors argue. Because it relies on batch processing, EDI creates hours of delay and significant gaps in information availability, rendering it basically unsuitable for today's high-velocity logistics operations.

Not only is it slow, it's difficult to implement and expensive to maintain. Before two companies can start to exchange data via EDI, they must first agree on one of the many standards and versions. Then there's the question of the infrastructure needed to support the process: the EDI software, communications software, mapping and translation software, and more.

It's a sign of a good researcher that he or she doesn't just identify the problem, but also offers a solution. And the report's authors do just that. Their solution? Ditch EDI in favor of application programming interfaces, widely known as APIs. Similar to the technology that powers consumer smartphone apps, the API messaging format allows data to flow from one computer platform to another in nanoseconds. That might sound esoteric, but it's not. You're already using APIs pretty much anytime you launch an app on your mobile phone or tablet.

To drive home their point, the authors invite us to consider what our daily digital lives would be like if we had to rely on EDI for communication. "Imagine having to set up EDI accounts for all the apps you currently use," they write. "Expedia, Kayak, or Travelocity would all need to set up specific links with each individual or company user in order to book travel. Social networks such as Facebook would have very few active users without the accessibility and wide-ranging functionality delivered by their API integrations with other platforms. Once you have the software and hardware in place, imagine having to update all of your accounts every time you update your phone."

In the transportation sector of logistics, that is exactly what's happening with the current data infrastructure. Fortunately, it should be much easier—and quicker—to fix than the problems with our roads and bridges.

Read our report on the University of Tennessee study.

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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