Reducing the vulnerability of global supply chains
Supply chains are vulnerable to all kinds of disruption, which can cause major economic losses. An EU-funded project provides technologies that companies can use for spotting in real time issues that disrupt their supply chains.
Inconsistencies in key details and information held on products across supply chains cost an estimated 1 % of sales revenue, causing the EU some EUR 30 bn of losses each year, according to the EU-funded CORE project. Undetected product quality problems can also lead to considerable logistical costs. In addition, supply chains can be disrupted by natural disasters like floods or extreme weather, and man-made events, including terrorism and political instability.
To mitigate disruptions and increase supply chain efficiency, CORE has created a platform to digitalise the documents, information and data associated with commercial transactions along the global supply chain. The secure, online platform, along with associated hardware and software technologies, provides all actors involved in a transaction with instant access to a single source of supply chain information and the ability to exchange details of shipment events in real time.
The platform also allows the secure submission and approval of digital documentation to customs, other authorities, buyers, sellers and shippers for imports and exports, thus facilitating paperless trade and cutting administrative costs.
The system aims to strengthen connections between business partners, enhance supply chain visibility and improve responses to unforeseen events for the transport of goods by sea, air and road.
‘In the demonstrations, CORE integrated system cuts error rates and inconsistencies in product details and descriptions by over 90 %,’ explains project coordinator Nik Delmeire of the European Shippers’ Council in Brussels. ‘If replicated at EU level, these results would pay for the whole of the CORE investment in less than a day. Also, supply chain costs decreased by up to 30 % in the trials. This indicates that if CORE’s solutions were fully implemented across Europe, billions of euros of losses which EU supply chains currently incur would be saved every year.’
The system developed by CORE include tracking and monitoring systems, risk management tools and methodologies, scheduling and analytical tools, connectivity infrastructure and a supply chain simulator.
Demonstrations of the solutions were tested for shipments along key international trade routes throughout Europe and the US and show the potential to bring about significant gains, says Delmeire.
For example, the technology and information exchange systems were tested using import declarations for food products being cleared through customs at the UK port of Felixstowe.
About 60 % of the information required by UK import authorities is available at the point of loading a container but border agencies do not receive it until the goods arrive. Supplying it ahead of time electronically would help port authorities improve security, and speed up the clearance of imports.
The results were evaluated by UK border agencies who concluded that the data was more quickly transferred, of a better quality, and more accurate than previously.
‘The systems developed in CORE bring visibility to supply chains, which comes from interoperability, standardisation and harmonisation of the various links within those chains, and the capability to react in real time,’ says Delmeire. ‘Supply chain systems are very complex and require the wide availability of accurate data to function effectively and this is exactly what has been delivered by the CORE project.’