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Why Hand-Coded Integration Is A Disaster For The Supply Chain

Data integration for logistics is more than a 'one off' process

1Nov

Having a multitude of partners is a fact of life for the supply chain. Manufacturers, retailers, and suppliers are all tracked in disparate systems including Warehouse Management Systems, Transportation Management Systems, and Enterprise Resource Planning (ERP) platforms.

The free flow of data between systems enables companies to achieve faster order fulfilment, reduced costs and increased customer satisfaction. This is especially true as the volume of orders increase and companies are forced to meet shorter deadlines to compete.

There is also a negative impact that is often overlooked whenever an integration is broken and incomplete. Searches take too long and productivity slows down. Employees in sales, marketing, and administration are forced to work around the system, finding their own solutions when the data is unavailable or unreliable.

Hand Coding Is The Short-Term Solution

When a project involves integrating only two systems, hand coding can be the least expensive solution. No new tools are required and the project can be completed using in-house staff. Since IT departments typically measure return on investment over the short term, hand coding is still the most common approach today.

As integration requirements grow over the lifetime of the system, costs for maintaining the system increase. Custom code that is created for an initial business objective is inflexible and requires more work to respond to changes in workflows or business needs. Making changes to the software requires going back into the code, which is time-consuming and complicated, and may cause other areas of the integration to break. Often the original developer moves on to a new opportunity and is no longer available to do the work.

In addition, there is a snowball effect on the costs for new integrations. Each time there is a requirement to connect with a new partner, another hand-coded solution is required. Every new connection has to be developed, implemented, and maintained in order to share data with all the other devices, components, and systems in the network.

Hand Coding Can’t Keep Pace

In the hybrid, hyper-connected world, operating at the speed of business is a priority.

Hand coding slows down delivery times, which can limit IT’s ability to respond to business changes. This creates the danger that IT can be perceived as slowing down a company’s progress by becoming a bottleneck, using valuable resources for integration projects instead of investing in more important digital transformation work that could result in creating a competitive advantage.

In addition, hand coding can be unresponsive to regulatory changes. For example, with the General Data Protection Regulation (GDPR), there is a need to comply with standard mechanisms for data management. Hand coding requires that developers go back to the drawing board and handle the new requirement for every piece of custom code.

If companies are unable to comply with guidelines such as GDPR, the consequences can be significant, resulting in up to €20m, or 4% of a company’s annual turnover - which when calculated at the group level for multinationals could add up to huge penalties.

Integration platforms can be a better alternative to hand-coded integration, because they provide a more flexible environment that matches the challenges of digital transformation. They are optimized to deal with different vendors’ technology stacks and to optimize between stacks. Fault-tolerance, resilience and elasticity, monitoring and performance management capabilities are built-in so that all data can be managed in a standard way across systems.

The initial investment can have a fast ROI due to significant financial benefits. For example, one pharmaceutical company used an integration platform to trace chemical quantities and lot numbers at each step of the manufacturing process to accelerate compliance with regulations. Integrating specialized equipment with back office equipment also reduced inventories due to better demand forecasting.

Data integration for logistics is more than a 'one off' process. It is a mission-critical business strategy that considers operational, economic, and strategic risks. Integration requires a long-term approach beyond hand coding so that the supply chain can run more efficiently to help companies create and maintain a competitive advantage.

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