The Challenges and Solutions of Data Interoperability and Integrity in Smart Supply Chain Infrastructures

With the rise of smart supply chain infrastructures, there is a growing need for seamless data interoperability and data integrity to ensure efficient and secure supply chain operations.  

“Smart supply chains,” an umbrella term for the integration of advanced technologies into operations, have the potential to greatly energize and streamline logistics, transportation, and distribution. By leveraging modern technologies such as the internet of things (IoT) and artificial intelligence (AI), organizations can create more efficient supply chains that can adapt to the ever-changing needs of businesses and consumers.  

However, this transformation comes with a set of challenges that need to be addressed to fully realize the benefits. It’s not enough for supply chains to be more efficient — they must also be more secure and resilient, as the proliferation of technology has been accompanied by an equally powerful proliferation of bad actors. In this post, we will explore some of the most pressing challenges facing smart supply chain infrastructures, along with the technologies that must be leveraged to address them. 

Challenge 1: Lack of Data Interoperability 

In smart supply chain infrastructures, there are multiple stakeholders involved in the movement of goods, including manufacturers, distributors, retailers, and consumers. Smart supply chains require a robust ability for each of these entities to freely exchange information — all stakeholders must have access to the same real-time data.  

However, each stakeholder may use different data formats, protocols, and platforms, all of which can hinder data interoperability. This lack of supply chain visibility, which has been noted by the Brookings Institute as well as numerous researchers, can lead to data silos, duplication of efforts, and delays in information sharing. Smart supply chains are only as smart as the data they have access to. If that data is inconsistent or suffers from time delays, any gains in efficiency will be greatly diminished.  

Solution: Data Virtualization 

Virtualization is a vast and complex topic, but at its core it involves using software to create a “virtual layer” of simplification over very complex data architecture. We encounter this principle at work every time we turn on our Mac, PC or Smartphone and effortlessly begin to navigate applications which speak different languages, and are hosted in different locations.  

Data virtualization technology can help solve the problem of data interoperability by creating a unified view of an organization’s supply chain data across disparate sources without physically integrating the data. This layer of simplification allows stakeholders to access and analyze the same data in real time, regardless of its format or location. By providing a single source of truth, data virtualization ensures that all stakeholders are on the same page and can make informed decisions based on accurate and up-to-date information. 

Challenge 2: Lack of Data Integrity 

Data integrity is another critical challenge in smart supply chain infrastructures. With the large volume of data being generated and processed, there is a risk of data being tampered with, lost, or stolen. This can lead to supply chain disruptions, loss of revenue, and damage to brand reputation. 

Solution: Blockchain Technology 

Blockchain technology, which can provide a secure and transparent way to track and verify transactions, has gained notoriety largely in relation to Bitcoin. But the ability to create a means of recording information that is nearly impossible to hack or manipulate has applications in a wide range of industries. Notably, as pointed out by Harvard Business Review, Blockchain can play a significant role in building smart, transparent smart supply chain infrastructures. By creating a de-centralized and tamper-proof ledger, blockchain ensures data integrity and enables stakeholders to track the movement of goods in real-time. This can help prevent fraud, reduce errors, and increase trust between supply chain partners. 

Challenge 3: Lack of Data Governance 

With the increasing amount of data being generated in smart supply chain infrastructures, companies face higher risk of fines and lawsuits. as much of this data is private or otherwise subject to strict regulation. There is a need for proper data governance to ensure that data is being collected, processed and shared ethically and in compliance with regulations. 

Solution: Data Consent Management 

Data consent management solutions can help address the challenge of data governance by providing a way for stakeholders to manage data privacy and consent. These emerging technologies give consumers the ability to control their data and decide who can access it. Solutions built on these technologies offer built-in safeguards that automatically prevent problematic use of data, allowing organizations to ensure that they are collecting and using data in a compliant and ethical manner. 

Challenge 4: IoT Protection 

IoT plays an increasingly significant role in supply chains, ranging from connected vehicles that provide real-time tracking of shipments, to improved forecasting based on both real-time events and historical data, and even reduction of paperwork by drivers. The rapid proliferation of IoT devices, however, also accentuates the growing need to ensure that these devices are authenticated and authorized to access data and systems. This development, in fact, is the driving force behind recent expansion of regulation such as the EU Data Act of 2022, which extends some of the data privacy requirements of GDPR to the IoT.  

Solution: IoT Authentication 

IoT authentication ensures that only authorized devices can access data and systems, preventing unauthorized access, data breaches, and cyber-attacks. Some authentication technologies use digital certificates to authenticate IoT devices, while others use biometric authentication methods such as fingerprint or facial recognition. Still other solutions use two-factor authentication methods, such as password and token-based authentication, to ensure that only authorized devices can access data and systems. All of these authentication technologies should play a key role in securing supply chains by ensuring that only authorized devices are transmitting data into supply chain systems.  

Technology Makes it Smart 

Smart supply chain infrastructures have the potential to transform the way we do business, but to realize their full potential, we need to ensure seamless data interoperability and data integrity. With data virtualization, IoT authentication, blockchain technology, and data consent management, we can address the pressing challenges of data interoperability, data integrity, and data governance in smart supply chain infrastructures. 

David Maher is CTO at Intertrust