Interoperability in the Supply Chain: Will FLOW Make a Difference?

In healthcare, a familiar conundrum has persisted for years: the ability for diverse entities to effectively and securely share patient data with one another to optimize care.

Although the nature of supply chain management is vastly different, a similar challenge for reliable interoperability exists.

As the authors of a recent study about digital operability in logistics and supply chain management note in an abstract of their research, “Interoperability is playing an increasing role for today’s logistics and supply chain management (LSCM) because of the trends of cooperation or coopetition. Especially, digital interoperability concerning data or information exchange becomes a key enabler for the next evolutions that will massively rely upon digitalization, artificial intelligence, and autonomous systems.”

The growing importance of interoperability in supply chain management (SCM) is demonstrated by various initiatives among supply chain players—such as standards developed by the Digital Container Shipping Association (DSCA) and the TradeLens platform, jointly developed by Maersk and IBM.

However, many data silos remain, hindering the ability for a fractured and fragile global supply chain to achieve and maintain resilience amidst a continual onslaught of woes.

Hence, the Biden-Harris Administration’s FLOW initiative that was announced in late March of this year.

Here, we’ll provide a snapshot of what it is; offer perspectives from supporters and skeptics; and see what progress has been made thus far.

What is FLOW?

According to a Whitehouse statement, FLOW—aka Freight Logistics Optimization Works—is a new initiative aimed at improving “digital infrastructure to connect the supply chain.”

Described as “an information sharing initiative to pilot key freight information exchange between parts of the goods movement supply chain,” initial participants in FLOW include 18 partners “that represent diverse perspectives across the supply chain, including private businesses, warehousing, and logistics companies, ports, and more,” according to the statement. “These key stakeholders will work together with the Administration to develop a proof-of-concept information exchange to ease supply chain congestion, speed up the movement of goods, and ultimately cut costs for American consumers.”

The initiative will be led by the U.S. Department of Transportation (DOT), which will play the role of “an honest broker and convener to bring supply chain stakeholders together to problem solve and overcome coordination challenges,” the statement noted. “This initial phase aims to produce a proof-of-concept freight information exchange by the end of the summer.”

Citing an increase in “national awareness of the need for improved information exchange,” the White House said FLOW will “test the idea that cooperation on foundational freight digital infrastructure is in the interest of both public and private parties.”

“The goods movement chain is almost entirely privately operated and spans shipping lines, ports, terminal operators, truckers, railroads, warehouses, and cargo owners such as retailers,” the statement noted. “These different actors have made great strides in digitizing their own internal operations, but they do not always exchange information with each other.

This lack of information exchange can cause delays as cargo moves from one part of the supply chain to another, driving up costs and increasing goods movement fragility.”

Initial partners in FLOW include:

According to the statement, “These first partners are committed to working with the Biden-Harris Administration to identify and operationalize a first information exchange that will support a more resilient and fluid supply chain.”

The principles of the pilot include:

In the future, the initiative will be open to additional parties.

“While starting with a limited pilot, DOT wants to hear from others who are interested in engaging as part of FLOW as a participant as the initiative grows,” the statement noted. “Within one month of the FLOW launch, DOT will launch a web page to gauge industry interest in participation and data sharing for a potential long-term FLOW effort.”

Perspectives from Supporters

Unsurprisingly, some of the most ardent supporters of the project can be found within the ranks of the first 18 partners. The DOT provides a snapshot of feedback from these companies, as well as several industry leaders—including the SCORe Coalition, the Consumer Brands Association, and the Digital Container Shipping Association (DCSA).

SCORe Coalition

“Our current suboptimal data infrastructure and lack of appropriate data sharing undermines the competitiveness of the US supply chain and US national security. The SCORe Coalition applauds the Administration for taking steps to address this urgent issue by endorsing the concept of a national freight data portal and agreeing to work closely with the private sector to bring it to fruition. By enabling greater collaboration, real time visibility, and ability to plan for supply chain actors, a portal would enhance the efficiency, agility, and resilience of the US supply chain and make the US less vulnerable to supply chain disruptions.”

– Jeff Weiss, chief counsel to the Supply Chain Optimization and Resilience (SCORe) Coalition

Consumer Brands Association

“Today’s announcement is a significant step forward in addressing what Consumer Brands has long-identified as a critical supply chain need. The potential of establishing a national freight data portal will add badly needed visibility into the supply chain. Consumer Brands applauds the administration and the Department of Transportation for acknowledging the need for data sharing and the innovative potential it creates. Establishing a national freight data portal is a big idea and we are pleased to see the administration advance toward making it a reality. The consumer packaged goods industry is eager to continue its work with the administration to help realize FLOW’s objectives and, ultimately, preserve the availability, affordability and accessibility of essential products.”

– Consumer Brands Association

Digital Container Shipping Association (DCSA)

“There are currently limited pathways for digitalised data to travel freely across the end-to-end-supply chain. As a result, ‘blind spots’ exist along the shipment journey, making supply chains less predictable, and hence, less reliable. Having an interoperable digital infrastructure will help eliminate blind spots by increasing the availability and reliability of data. DCSA and its members are committed to contributing to the Department of Transportation initiative to create a standards-based, interoperable digital infrastructure.”

– Thomas Bagge, CEO, DCSA

Perspectives from Skeptics

FLOW is still in its early days, but some are expressing skepticism about how effective it will be. Some of that doubt relates to who wasn’t included in the initial cohort of participants—namely technology companies, railroads, trucking, and dray carriers.

In an article for Supply Chain Management Review, Group News Editor Jeff Berman cited several industry leaders and their “mixed reviews” about FLOW:

In a post for SupplyChainBrain, Senior Editor Helen Atkinson also questioned the lack of supply chain technology experts among the initial 18 participants.

“The project aims to build a centralized repository of supply chain data that can be accessed by various industry stakeholders for improved collaboration and more informed decision making,” Atkinson said. “Sound familiar? It should. Dozens of companies – from software vendors to ocean carriers and hybrid entities formed by acquisition mash-ups – have been putting a bead on exactly this idea for more than two decades. They haven’t figured it out quite well enough to avoid the kind of freight bottlenecks that have put ‘supply chain’ in the mainstream news spotlight. But many supply chain technology aficionados are puzzled as to why the DOT has neglected to include these logistics tech vendors in its initiative.”

Progress so far

In late April, U.S. Sen. Roger Wicker, R-Miss., ranking member of the Senate Committee on Commerce, Science, and Transportation sent a letter to Transportation Secretary Pete Buttigieg seeking “additional information on the implementation” of the FLOW initiative.

According to a statement, “Wicker urged DOT to incorporate feedback from a broad array of stakeholders in the development of the program.”

“Since 2020, U.S. manufacturers, retailers, consumers, and workers have experienced enormous freight and supply chain congestion,” Wicker wrote. “Any work to enable greater efficiencies in the freight transportation system must be usable for the enormous number of stakeholders who work in, and rely on, the freight network. To be successful, the FLOW initiative should adopt a balanced, open-minded approach that incorporates feedback from a broad array of transportation stakeholders and shippers.”

Wicker’s letter included a list of detailed questions about FLOW. So far, a public response doesn’t appear to be available on government websites.

A Redwood Logistics post that discussed the advantages and disadvantages of FLOW also noted that gaining broader participation in the initiative could be a challenge: “…it remains unclear as to whether or not companies will move forward with this development and adopt it. The project is currently being conducted completely on a volunteer basis, although there are a number of large carriers participating in the project, including FedEx, UPS, and CH Robinson. The FLOW initiative is set to continue throughout the summer of 2022 and Sec. Pete Buttigieg has stated that he is hoping to see more participation in the months to come. However, the current administration will also need to find a means of enticing companies to take part in the initiative.”

As Corey Bertsch, vice president of solutions management at Slync.io, said in a SupplyChainBrain post, another sticking point may be the global nature of the supply chain.

“If new standards only apply to American supply chains, there will continue to be hiccups along the information-sharing process as much of the key supply chain information originates outside of the U.S.,” he wrote. “A global economy with global companies and global systems needs consistent standards.”

As far as what comes next, Bertsch said that even if the initial panel of 18 participants could produce “an incremental stopgap for the disruptions,” the result would be a “big win.”

“No one is expecting the FLOW initiative to produce a silver bullet that solves every problem, but so far it’s a broad statement that hasn’t defined an overarching strategy,” he said.

Detailing the challenges at hand, Bertsch ended on a tentatively positive note: “The findings of the first phase of this initiative will be a fascinating case study and just the latest chapter in trying to fix what has proven to be an enormously complex problem. Hopefully it is at least able to answer some important questions.”