Home' MHD Supply Chain Solutions : MHD Mar-Apl 2017 Contents THE APEC STUDY ON THE
ADOPTION OF GLOBAL
SUPPLY CHAINS HAS
he evolving economic integration in the
Asia-Pacific region requires the continual
exchange of information between trading
partners, supply chain improvements and the
strengthening of connectivity. Supply chain
visibility and connectivity are needed to ensure
the integrity of the product is maintained across
borders and logistics costs are minimised.
Background of study
The Asia-Pacific Economic Cooperation (APEC), a
forum for 21 Pacific Rim member economies that
promotes free trade throughout the Asia-Pacific
region, recognised this need and instructed
officials to explore the potential of leveraging
Global Data Standards (GDS) to enhance supply
chain performance by developing pilot projects
to improve efficiency, security and visibility. GDS
provide a common language to identify, capture
and share supply chain data.
In collaboration with GS1 organisations in Hong
Kong and the US, and major Australian producers
from the wine and beef sectors, GS1 Australia
agreed to take responsibility for facilitating the
implementation of two pilot projects – the ‘Wine
Pilot’ and the ‘Beef Pilot’. To do this, GS1 Australia
initiated the Export Supply Chain Visibility Project,
within the auspices of APEC, to demonstrate the
value of using GDS to increase visibility, security
and transparency across international supply
chains and cross-border government procedures.
Aim and objectives
The aim of the Study on the Application of
Global Standards for APEC Supply Chain
Connectivity (Phase 1) was to assess the benefits
and associated costs of the implementation of
GDS in the GDS pilot supply chains.
The major objectives of the pilots were to:
1. Track the progress and conduct a proof of
concept and cost-benefit analysis on the
application of particular GDS at product level.
2. Propose recommendations on possible future
actions to enhance supply chain performance
through the application of GDS.
3. Illustrate the current implementation of
certain GDS by APEC member economies
used for the trans-boundary movement of
goods and address the related chokepoints
The methodology - GDS pilots
The two pilot studies in Australia covered cross-
border shipments and were implemented across
the following supply chains:
• ‘Wine Pilot’ – Wine exported from Australia to
Hong Kong, China.
• ‘Beef Pilot’ – Boxed beef exported from
Australia via New Zealand to the USA.
Before the GDS pilots commenced, it was
apparent that there was limited visibility
in the supply chains, either through email
communication or through electronic data
interchange (EDI) interfaces that transmit
messages to activate business processes.
The event reporting for both pilots used GS1
EPCIS standards and both trials used GS1
numbering and barcoding on the cases of wine
and cartons of beef.
Benefits of GDS in the pilots
For the Wine Pilot, quantifiable benefits
achieved through utilising GDS for traceability
were associated with eliminating the 5 per
cent of delivery in full on time (DIFOT) failures
from the baseline survey. These failures were
estimated as 0.54 percent of the value of this
supply chain. The annual shipments are low
volume and the trading relationship is mature,
with well established ‘workarounds’ for shipment
failures. However, in the high-volume domestic
trade for this product, higher visibility would
deliver more substantial business value.
For the Beef Pilot, benefits quantified
were associated with savings in manual data
entry, container demurrage and detention
and amelioration of the impact of missing or
damaged port shipping marks. The benefits
derived from adopting and applying GDS
account for 0.67 percent of the value of this
supply chain. The shipments are high volume
and high value, so the benefits are significant
for this trade and can be extrapolated to a high
benefit for the Australian meat export industry.
Summary of key insights and key
messages from the APEC GDS pilots
• The researchers were surprised at the
lack of automation and the reliance on
manual processing in messaging across
these supply chains, often despite having
quite sophisticated internal ERP systems in
• Visibility increased dramatically once the data
was standardised and able to be shared,
enabling new processes (e.g . advanced
notice of shipping arrivals) and verification
of compliance (meat messaging portal and
missing port shipping marks).
• These processes deliver significant
benefits beyond the cost savings
identified through removing human error
in messaging. They impact the dynamic
capabilities of the businesses.
• Customer assurance can be enhanced with
very little effort on the part of suppliers in
the value chain. It was common to hear “we
didn’t think they would need this” or “if we
had known, we could have provided this
information”. This highlights the fundamental
role of collaboration in supply chains and the
value discovered during the pilots.
• We can see great potential for use of data from
visibility platforms to be used for verification of
compliance by border control and food safety
agencies, enabled by automated, standardised
data being captured by supply chain
participants. There will be a need for authorities
to work with industry to protect commercial
data and to evaluate how this would reduce the
compliance burden in cross-border trade.
• The pilots certainly demonstrated savings
and benefits are available. The reality of a
highly-fragmented logistics and transport
industry makes the need for standardisation
of data more pressing in the environment of
APEC regional trade facilitation.
For more information contact Bonnie Ryan,
Senior Manager – Trade, Transport &
Heavy Industry, GS1 Australia at bonnie.
“The reality of a highly-fragmented logistics and
transport industry makes the need for standardisation
of data more pressing in the environment of APEC
regional trade facilitation.”
MHD SUPPLY CHAIN SOLUTIONS — MARCH / APRIL 2017
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