News / Amazon's 'data lake' for supply chain visibility: smart move, but it's early days

© Daniel Constante

Amazon’s web services unit, AWS, has unveiled a cloud-based application aimed at increasing supply chain visibility through the integration of data.

AWS Supply Chain will pool data from diverse systems into a ‘data lake’ to give companies enhanced visibility of their supply chain, generate forecasts and offer ‘risk solution strategies’ though the use of predictive analytics.

Companies can use the app on a pay-as-you-go basis and it is available in preview in Virginia and Oregon, in the US, and in Frankfurt, Germany, with additional availability “coming soon”. Among early adopters are Whole Foods and Lifetime Brands.

The application automatically synchronises with external systems and applications and, according to Amazon, users don’t have to move data from existing systems.

In addition to unifying supply chain data, the system can reveal risks like stock-outs, generate more accurate demand forecasts and allow users to review recommended actions to mitigate risks.

Data can be displayed on a map, from which users can drill down to check inventory at individual locations and see how to eliminate issues.

Amazon has stressed that the system uses real-time data, so forecasts and corrective actions are based on current situations rather than yesterday’s information.

The concept of creating data lakes to pool information from multiple sources has gained traction during the past couple of years, but actual progress has been slow. Adoption has been confined to the top tier of enterprises, said Brian Glick, CEO of Chain.io, a cloud-based supply chain integration platform.

“Whether they get value out of that today may be debatable,” he added.

Large global enterprises will likely go it alone, which makes companies at the lower end of the large enterprise spectrum and players from the upper echelons of the mid-sized bracket the main targets from Amazon’s new offering, he reckons.

Cathy Morrow-Roberson, founder and head analyst of Logistics Trends & Insights, thinks SME shippers are more likely to turn to smaller platform providers, but she also has questions about some large players.

“Do retailers really want to partner with Amazon?” she asked. “What are the privacy measures?”

She added that Amazon is not alone in this space: Microsoft is working on its solution; and Google will likely come up with something too.

At this point, all three have only given broad indications of where they are headed in this arena, Mr Glick noted. The text on the AWS site on the new venture is a mere eight paragraphs long. Looking at the company’s established offerings, he noted that these have hundreds of papers and documentation, which indicates it is early days still for AWS Supply Chain.

“There’s going to be a lot of confusion in the market about what Microsoft, Google and Amazon are doing. All use the term ‘supply chain’, but a supply chain has a lot of pieces. Companies that think ‘they are going to solve my supply chain’, are going to be disappointed,” he warned.

Many beneficial cargo owners have turned to their logistics providers for visibility and data about their supply chains, as well as for elements like warehouse management, but Mr Glick doubts they are going to play a role in this for some time.

“Most transport companies are not at that level of sophistication. I’m not aware of any 3PL or 4PL that is aggressively doing this,” he said.

He added that leveraging data pools and using artificial intelligence to make use of these was a long-term project that likely required assistance from the likes of Deloitte or Accenture for implementation.

“It’s not something you sign up for with a credit card, and the next day the data flows,” he said, but added: “Which does not mean that beneficial cargo owners can ignore this for the time being.

“If it’s not a high priority now, it will be. I think for many companies, it really is,” Mr Glick said.

And Ms Roberson views this as a necessity for firms.

“The smart ones are taking advantage of data analytics, data lakes. They are going to be the winners. The others will be losing out by having more inefficient supply chains,” she predicted.