Supply chains that mostly rely on legacy EDI (electronic data interchange) systems, a technology introduced over half a century ago to support communication with business partners, will eventually lead to mass disruptions. This is because the rise of concepts such as Omnichannel 2.0 and on-demand delivery puts pressure on all channels in any kind of business that operates online.
The solution? As with many problems, APIs are the answer.
A good number of supply chain executives prefer avoiding the technical intricacies of back-end technology. However, it is always worth it to make an exception for the expansive and pervasive application programmable interface (API). Why? Because this modest software innovation doesn’t just improve supply chain connectivity and visibility on a global scale, but it also creates incredible strategic value.
APIs And the Supply Chain
APIs allow the digital supply chain where everything from inventory details to the location of a particular shipment on a truck to the status of payment can be accessed in real-time. Enterprise stakeholders use APIs to make sure that supply chain data and actions are available, whenever required to the systems and people who need them. This allows employees to make the best possible business decisions as well as decreasing manual data handling across the entire supply chain.
Businesses looking for greater supply chain efficiency can use APIs to their advantage. APIs can be used to link their ERP system with those of their suppliers, carriers, third-party partners, and other data sources, combining inventory and location data with weather, transportation status, and expected fulfillment necessities to support streamlining transportation logistics. This kind of effort could utilize several APIs, connecting several different applications, objects, programs, and systems.
It is ideal to deploy mainly four different types of proprietary APIs on behalf of clients:
- Order management APIs, that facilitate processes by connecting trading partners, exchanging orders, notices, invoices, and other automatic business transactions.
- Control Tower APIs designed around status-related principles such as road shipment visibility, shipment aberrations, and invoice payment status.
- Master data APIs, which support building and managing central data for the causes of co-innovation across functions and organizations.
- Specification APIs that enable transferring data and integrating services.
Almost countless APIs fall into each of these categories and support several data connections to help improve efficiency and boost visibility at each step of the supply chain across a wide range of suppliers, clients, stakeholders, and partners.
Delivering Value Via APIs
APIs enable a way to connect digital ecosystems and technologies that exceed simplifying communication—they also improve business performance in various ways. They allow upper management to implement business strategies more seamlessly, speedily, efficiently, and more affordably. Through the sharing of digital services with external organizations whenever needed, growth rates are accelerated, scalability is achieved and technical infrastructure costs are dramatically reduced. From a business and finance perceptive, strategically implementing APIs can enable your business to:
- Develop and scale quickly
- Optimize allocation of investment and capital
- Lower selling, administrative, and overall expenses
- Streamline growth and management
- Avoid particular technical liabilities
It is important to remember that APIs need to be maintained and managed responsibly just like any other tool. This means constructing management infrastructure that secure, control, and manage the programs in a systematic and planned way. From conception to delivery to keeping up with changing security demands, various aspects of each API need to be updated frequently. But these updates are a small price for such an effective and versatile method for delivering strategy and better meet customer demands.
The APIs Time to Shine
So why are APIs such a big deal at the moment? The contemporary interest in APIs stems from several factors meeting to create perfect conditions for API-utilized supply chain optimization. These factors include the maturing and circulation of several complementary technologies like artificial intelligence and machine learning, wide-ranging global application development, increased financial pressure, continuity directions, improved understanding of API optimization, and the era of digital transformation that has a greater need for improved connectivity.
It is impossible to argue that the API’s time has come. At the moment, supply chains everywhere need them more than ever as businesses are on the lookout for speed, flexibility, and scalability. Businesses that use API-enabled supply chains will have a competitive edge over the ones that don’t. As a result, more and more enterprises are reaping the benefits of API-led integration, as well as the microservices that platforms like MuleSoft provides.