Eugenio Marín
United States-Mexico Foundation for Science - FUMEC
Expert Contributor

The Case of Trustworthy Data-Driven Supply Chains

By Eugenio MarÍn | Mon, 07/25/2022 - 12:00

Many industries, over the last decade, have deployed diverse methodologies and tools to increase the level of performance and integration of their supply chains; nevertheless, systems still deliver midlevel noise and poor-quality data, which are roadblocks to digitization and other key business objectives that directly impact companies’ competitiveness and performance.

Today’s challenge facing procurement areas is how to build or restore trust, first by resolving the data quality problem and then by providing trustworthy supplier data to decision-makers. For instance, the aerospace and defense (A&D) industry is at an early stage of digitization compared to other industries. Barriers to entry remain extremely high in a concentrated market with stringent certification requirements. Its traditional long-cycle companies are used, to a certain extent, to linear or progressive innovation and have difficulty implementing radically innovative products and processes.

However, historical A&D players have come to understand that digitalization will affect the entire life cycle of aerospace products (development, production series, aftermarket, and operations), as well as the entire supply chain (from raw material suppliers, tier 3/2/1 to end customers). The multiple technologies of the digital world and Industry 4.0 are relevant to this industry. There are valuable examples like the BoostAeroSpace initiative in Europe whose goal is to increase the competitiveness of the A&D industry by strengthening collaboration and communication between suppliers and customers supported by solutions provided by companies like Supply On. Another example is the American unicorn Palantir Technologies that has joined Canadian companies ThinkData Works and Martinrea in developing a supply chain resilience platform.[1]

Mature digital solutions make it much easier to determine if suppliers meet expected needs and keep track of this information for later use. Systems can be used to correlate basic company data with the specific details that relate to your industry and your contracts. This information might include NAICs self-validation, supplier capabilities, asset readiness, order management, inventory fulfillment, third-party validation, cybersecurity and trade compliance. Common thinking is that by turning to the cloud, they will instantly gain access to quality supplier data. Unfortunately, that’s not the case. Systems should enable supplier-data cloud with information that has already been cleansed, enriched and validated and can be accessed by many companies, becoming even more trustworthy each time it’s leveraged by new data. It’s the only direction the industry can go.

In our experience at the US-Mexico Foundation for Science (FUMEC), we know that digitalization shifts the companies’ mindset but, in a pragmatic way, facilitates data gathering, accelerates the onboarding process for both the supplier and the buyer and reduces costs of supplier approval and certification. In the last two decades, FUMEC has supported and accelerated many SMEs in diverse sectors and value chains. A good example is the Mexican company Macrolynk, which provides cleansed data and upper trustworthy platforms, applying its processes in North American value chains, from initial purchase order through to final payment, providing customers and its suppliers unparalleled access to critical, real-time information.

Currently, FUMEC is developing a continuing phase of the iCluster project, which supports and reutilizes industry mapping efforts developed by the US, Mexico, and Canada, offering a complementary proprietary methodology that reuses cluster mapping datasets and other economic datasets proven to identify regional specializations and value chains across binational industrial corridors based on strategic economic activities and industry sectors.

iCluster responds to strategic initiatives put forth by the 2021 updates of the High-Level Economic Dialogue (HLED) pillars: Building Back Together, Securing the Tools for Future Prosperity, and Investing in Our People. iCluster focuses on innovation and virtualization of clusters and value chains, identifying local specializations, nearshoring and reshoring traceability opportunities to foster economic development and resilient supply chains with impacts on local entrepreneurs, SMEs, industry organizations, and government policy.

The iCluster Value Network Mapping Methodology provides clear guidance to target highly productive sectors of economic regions, identifying their economic weight, dynamics, degree of specialization and regional competitiveness, under an integrated approach to define the binational value networks using trusted datasets and geospatial statistical algorithms. Results can be reused for web publishing and further processing through AI and data analytics tools (strategic classification of economic activities from binational clusters and regions run through the SCIAN 2018 system used by INEGI in Mexico to publish the DENUE registry — and the NAICS 2022 system used by the US Census Bureau to publish the US establishment registry).

Knowing where and when to go for supplier data and having a high level of trust in that data increases the overall understanding among procurement departments, suppliers, investors, economic development agencies, governments, and other stakeholders. Not only does this ensure that the operation keeps moving but it also increases the level of confidence associated with supplier data-driven decisions and investment allocations geared to close gaps in a particular supply chain.



Photo by:   Eugenio Marín