The data-driven supply chain raises new governance and security issues

This is an excerpt of the original article. It was written for the September-October 2023 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2023

Best of the best. Best in class. The elite. Whatever terminology you use to describe the top performers in industry, they all have one thing in common: Companies try to emulate them. That is not easy, of course, but honors such as the annual Gartner Supply Chain Top 25 provide a roadmap for firms hoping to reach the upper echelon. As we do each year here at Supply Chain Management Review, our September/October issue dedicates significant real estate to the Gartner Supply Chain Top 25. Why do we do this? Because our mission is to help inform you, the supply chain practitioner, in all the best ways to make your own supply chains more efficient and…

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Accelerating this need is the move from the traditional supply and sales channel to business processes that extend beyond enterprise boundaries toward so-called “supply chain constellations.” Instead of adhering to the rigid, linear supply chains of the past, individual enterprises can have a role in numerous “constellations” based on varying activities to better serve the needs of others in the supply chain and, ultimately, consumers. The ubiquitous sharing of data makes these constellations powerful tools that touch every enterprise process and beyond.

Considering this fast-evolving digital landscape, how do companies share data in a supply chain constellation? How do they determine what data can be shared, with whom, and identify, implement, and manage applicable use restrictions? How do enterprises develop robust data-sharing governance policies?

Businesses should think about data stewardship through three lenses which we have labeled below as Category I–III for ease of discussion:

Category I. Confidential or proprietary data that provides a business with competitive advantage such as unit cost, product design information or projected sales volumes.

Category II. Personally identifiable information (PII) about customers, employees, and suppliers that is increasingly subject to statutory and regulatory requirements.

Category III. Specific-use data that can be shared for business optimization without fear of competitive exposure; for example, available space within a container to optimize shipping cost. Generally, this data is shared amongst a closed cohort that may include partners and even competitors with aligned interests.

Each of these categories requires different data governance and protection. Of course, data travels in both directions—thus, an enterprise is both an owner of data and a user of others’ data. Governance and security policies must consider both.

Engaging in this analysis will help businesses move away from traditional supply and sales channels toward supply chain constellations. This article aims to provide guidance by identifying actions enterprises should take and offers practical guidance for implementing comprehensive data-sharing policies to become a good data steward. We chart a course for process evolution enabling every data business—and as such, every business—to bolster its data-sharing policies and security standards.

Considerations for good data practices

1. Why is data being shared?

This is the fundamental question. Information can be shared across a supply chain constellation for several reasons, including sensing and stimulating demand, predicting arrival time of product at a distribution center, or managing ESG (environment, social, and governance) objectives.

Category I data that provides a competitive advantage should be tightly controlled and reviewed at senior levels within a company before it is made available to trusted suppliers. Technology must be implemented that controls access and provides an audit trail. Ownership of the data must be clearly maintained and use restrictions identified and made legally binding. If you are an athletic apparel manufacturer, you do not want your supplier sharing your shoe design with your competitor who may also be a customer of that supplier.

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