In today’s competitive landscape, companies large and small are attempting to leverage their supply chain data to streamline operations. Unfortunately, the difference between systems integration and a solution that integrates data is the most misunderstood concept in the market today. Companies sometimes think that systems integration is the same as data integration.

However, simply integrating your TMS with another provider’s track & trace system does not provide visibility to the shipments. Also, having your TMS integrated with another provider’s freight invoice doesn’t provide you with financial visibility.

Track & trace integration typically allows the freight invoice integration to trigger a payment to a carrier. In a systems integration scenario, the only action that has been performed is matching. The track & trace record and the freight invoice are matched to a shipment.

Supply Chain Data Integration Offers More Value than Systems Integration

Data integration merges all these records together and goes a step further by transforming it into actionable data. Actionable supply chain data allows the user to see only what they want to see. It makes the data useful by showing only what’s relevant to them. Data integration is also less rigid than systems integration and doesn’t rely on one transaction to successfully occur before moving onto the next transaction. Instead, data integration pulls all the data sets together into one view, standardizing and normalizing the results so the user will see the whole picture. Therefore, data integration is much more valuable than systems integration.

Data Integration vs. Data Aggregation

Similar to the confusion that exists around Data Integration vs. System Integration, a data integrator and a data aggregator are very different entities. There are many data aggregators in the market today that boast hundreds, or even thousands of connections. Data integrators, on the other hand, are focused on the datasets or different types of data that are being integrated together. Every company I’ve ever met already qualifies as a data aggregator. They’ve been aggregating supply chain data from all their providers for years. Integrated data is a different story.

Data is only valuable if it provides three things:
1) Information,
2) Insight, and ultimately
3) Intelligence.

Integrated data delivers on these three elements by combining the datasets and transforming them into actionable data. The transforming process is what normalizes and cleanses the data to ensure the picture you are viewing is complete and accurate. Integrated data also allows you to make better decisions by warning you about the unintended consequences of your actions before you do something.

Data Aggregation Alone Produces Inaccurate Insights

Imagine a scenario where a shipper runs an analysis on their shipment history. The analysis shows the shipper a large savings opportunity. The shipper makes the recommended change only to save nothing. What happened?

After months of hard work and analysis, they realize that the dataset they used was missing a key element such as order type or customer. After they manually integrate the complete information, they see that all the projected savings were coming from a particular order type or a customer where they couldn’t make the required change. In other words, the lack of true data integration in their analysis model gave them insights that were not accurate.

Selecting a Solution that Offers True Data Integration

Here are three specific questions you should ask (and answers to look for) when assessing a logistics management solution that promises true supply chain data integration.

  1. What master data does the system require? A data integrator will have an answer; an aggregator will need little to none.
  2. Will you help us fix any data issues? A data integrator will simply say yes; a data aggregator may say no, or assure you that there are no data issues.
  3. Ask a carrier, ‘What it’s like to work with this provider’? A true data integrator will solve long-standing problems the shipper and carrier have had, helping the carrier be successful and earning their respect.

Integrated data is all about pulling multiple sources of data together and transforming it into relevant information. For logistics, this means integrating the order, shipment, track & trace, and freight invoice data together and standardizing and cleansing to provide actionable intelligence, so you the shipper can turn your freight into a strategic asset.

Note: This article was originally published on the DC Velocity Blog Logistics Problem Solving on April 5, 2018.