Supply Chain News Updates: March Musings on Supply Chain Advances

As we enter the third month of 2019, here are a few Supply Chain Management updates to consider.

• Defining standards. The OpenChain Project, which is designed to build trust in open source by making open source license compliance simpler and more consistent, has announced that Microsoft has joined as a platinum member. This comes on the heels of several other large companies joining OpenChain last month including Google and Facebook. A leading standard for open source compliance in the supply chain, OpenChain is meant to provide a specification as well as overarching processes, policies and training that companies need to be successful in managing open source license compliance so that it becomes more efficient, understandable and predictable for participants of the software supply chain. By joining OpenChain, Microsoft hopes to help create best practices and define standards for open source software compliance, so that shippers have even greater choice and opportunity to bridge Microsoft and other technologies together in heterogeneous environments.
  
• Ports approve. Funding for U.S. port-related programs advocated by the American Association of Port Authorities (AAPA) fared well in the Consolidated Appropriations Act. 2019 agreement announced by Congress last month. Of particularly significance to America’s deep-draft ports is the agreement includes Transportation, Housing and Urban Development, and Related Agencies (THUD) funding for a dedicated port infrastructure program in the U.S. Department of Transportation's (USDOT) Maritime Administration (MARAD), a significant allocation for USDOT's Better Utilizing Investments to Leverage Development (BUILD) program in which ports are eligible, level funding in the U.S. Department of Homeland Security's Port Security Grant Program in addition to a hefty increase in Customs and Border Protection personnel, a $12 million increase in funding for the Environmental Protection Agency's Diesel Emission Reduction Act grants program, and an increase in the National Oceanic and Atmospheric Administration's (NOAA) Navigation, Observations and Positioning program.
  
• Space story. Inmarsat, a global leader in mobile satellite communications, has joined forces with two leading start-up programs – Rainmaking's Trade and Transport Impact (T&TI) and Bluetech Accelerator – to create initiatives that directly support start-ups focused on IoT and big data innovation in the maritime, ports and logistics supply chain. The programs will fund, support and mentor start-ups developing applications that aim to harness the power of IoT and big data to enhance safety, efficiency and sustainability. Inmarsat will collaborate with those start-ups to find a route to market via its global, high-speed satellite communications infrastructure that connects over 160,000 ships, as well as ports, road and rail networks across the world. From enhancing safety to improving operational efficiency, emerging digital technologies such as machine-learning and IoT are set to become increasingly important in the day-to-day running of shipping and logistics companies and vital to improving throughput at the world's largest ports.
  
• Air cargo climbs. The International Air Transport Association (IATA) released full-year 2018 data for global air freight markets last month showing that demand, measured in freight ton grew by 3.5% compared to 2017. This was significantly lower than the extraordinary 9.7% growth recorded in 2017. Freight capacity, measured in available freight tons, rose by 5.4% in 2018, outpacing annual growth in demand. This exerted downward pressure on the load factor but yields proved resilient. Air cargo's performance in 2018 was sealed by a softening in demand in December. Year-on-year, December demand decreased by 0.5%. This was the worst performance since March 2016. Freight capacity, however, grew by 3.8%. This was the tenth month in a row that year-on-year capacity growth outstripped demand growth. Meanwhile, International e-commerce grew in 2018, which according to IATA spokesmen, “was a positive factor for the year.”
  
• Descartes deal. Descartes Systems Group, announced that it has signed a definitive agreement to acquire the businesses run by the Management Systems Resources Inc. group of companies operating under the names “Visual Compliance,” “eCustoms” and “MSR” (collectively, “Visual Compliance”). Visual Compliance provides software solutions and services to automate customs, trade and fiscal compliance processes, with a focus on denied and restricted party screening processes and export licensing. Visual Compliance is based in Canada and serves over 2,000 customers with over 67,500 subscribers operating in over 100 countries. Denied/restricted party screening is the review of people, goods, services and/or commodities against comprehensive lists published by governments and international organizations identifying people, organizations and countries with whom it is illegal or restricted to transact business. In the international trade context, compliance with these sanction lists is actively enforced by governments around the world, with consequences including large fines, revocation of export privileges and/or criminal prosecution.
  
• Circular advances. Accenture is collaborating with Mastercard, Amazon Web Services (AWS), Everledger, and Mercy Corps to launch the circular supply chain capability, a blockchain-based solution designed to improve supply chain transparency by empowering consumers to directly reward sustainable practices of small-scale growers and suppliers. With two-thirds of consumers stating a preference for sustainable brands, the ability to promote ethical and environmentally mindful practices across the supply chain has never been more important. Until now, however, consumers have had few ways to connect with small-scale suppliers at the base of the supply chain pyramid and limited opportunities to support and incentivize sustainable practices. The circular supply chain capability is designed to meet these needs by combining blockchain, digital identity and payments technologies to allow customers to identify individual producers who use sustainable methods and financially reward them with a “tip” made by direct payment.
  
• Auto transformation. A new survey conducted by IHS Markit maintains that transformative technologies are reshaping the automotive manufacturing sector. According to “Benefits and challenges of transformative technologies in automotive manufacturing, examples include industrial robots, artificial intelligence, cloud and anything-as-a-service (XaaS), virtualization and software, additive manufacturing, industrial internet of things (IIOT), and augmented reality (AR) and virtual reality (VR). “The survey results reveal a positive outlook for transformative technology adoption in automotive manufacturing, which is related to the ongoing and quick penetration of industrial robots, virtualization and software, connectivity, and physical automation,” says Wilmer Zhou, senior analyst, manufacturing technology, IHS Markit. The survey also indicated that some companies are facing challenges, when adopting transformative technology in their factories. Among all of these challenges, “insufficient employee skills/knowledge” was the major bottleneck to digital transformation in automotive manufacturing. followed by “ROI uncertainty,” “unproven technology,” and “business model.”

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