In this article, we’ll answer all of these questions and then some. We will also share with you some tips on how to make the most of supply chain digitization. So, let’s dive in!
What Is an API?
Before we get down to discussing the benefits of APIs, let’s first clarify what APIs actually are.
In layman’s terms, an API (an acronym that stands for Application Programming Interfaces) is a piece of code that allows different software applications and computers to “talk” (so to say) to each other silently behind the scenes. It defines the protocols, methods, and tools for building software components and enables seamless integration between various systems.
With regard to sourcing and supply chain management, it does the same thing, providing visibility across different systems and applications, including:
Supplier databases,
Inventory,
Procurement platforms,
Shipments,
Orders.
With this integration, businesses gain real-time access to critical information without the need for manual entry, helping them reduce errors and increase the overall efficiency of all processes.
In other words, APIs act as intermediaries, taking requests from one system and delivering responses to the other in a format that they are programmed to understand and process.
To give you an example of how it works, let’s say a customer is searching for a particular product – yellow sunglasses. When he or she initiates the search, the website’s application sends a request to the product inventory API. What happens next is, the API processes this request and retrieves the relevant product info from the inventory database.
Once the product is found, it sends back a response to the website, containing the details of the available yellow sunglasses. Now the website’s application can display the search results to the customer, including product images, descriptions, pricing, and availability.
This seemingly simple interaction allows businesses to leverage the functionalities of different databases and come up with better decisions as to how they manage their supply chain processes.
Starting from 2017, when APIs were already used by 24% of businesses on the web and 15% on mobile, they only gained more popularity, now being widely adopted by nearly 65% of organizations around the world.
Benefits of APIs in Supply Chain Management
Surely enough, digital transformation isn’t a completely new thing in the supply chain industry. In fact, according to CoinDataFlow Price Prediction, for the last 50 years at least, businesses have been heavily relying on Electronic Data Interchange (EDI) to exchange data and streamline communication between different entities in the supply chain.
And yet, APIs are taking over. Let’s see what benefits APIs offer when it comes to supply chain management and why, if you’ve not started using them yet, it’s time to do so already.
1. Real-Time Visibility
Where APIs beat the traditional supply chains is in providing real-time visibility.
The old-school methods applied in traditional supply chain methods often relied on manual data entry, updates, and batch processing, which resulted in delays and outdated information.
APIs, on the other hand, offer real-time data exchange and instant access to the information needed, enabling business executives to:
Proactively address any issues that may arise,
Monitor inventory levels at any given moment,
Respond to customer inquiries quickly,
Accurately estimate delivery times,
Ensure timely order fulfillment.
2. Enhanced Collaboration
While you might not think about it straight off, APIs also help facilitate collaboration among supply chain partners, including suppliers, manufacturers, distributors, and logistic providers. By integrating their systems through APIs, businesses can share data, exchange information, and coordinate their activities more effectively.
This enables faster response times, better coordination, and improved overall performance across the supply chain.
3. Better and Faster Order Management
Not less important is the fact that APIs automate the order management process. This means that businesses don’t need to be directly involved to order processing. Once the order is placed, APIs can automatically update inventory levels, trigger purchase orders, and initiate shipment tracking.
As a result, they can save the money that would otherwise be spent to do this job manually, improve accuracy, and significantly speed up order fulfillment.
4. Improved Inventory Management
One of the other advantages that using APIs offers businesses is improved inventory management.
For example, a retail business that sells electronic gadgets and integrates APIs with its suppliers’ systems, can monitor more closely the demand for different gadgets. If they find that one particular smartphone is particularly popular with consumers, they’ll make sure they have it in the inventory.
And vice versa. If some of the inventory is slow-moving, they can reduce prices, offer discounts, or offer bundle products to minimize holding costs and stimulate sales. This way, they can prevent the accumulation of obsolete inventory and free up their shelves for gadgets that are more likely to sell.
Aside from that, vendors using API-connected systems can benefit from higher turnover rates. By recognizing demand patterns and inventory popularity, they can ensure their stocks are replenished in a timely manner, minimizing customer frustration and increasing sales.
5. Better Forecasting and Growth
With APIs, organizations gain access to valuable supply chain data that can be leveraged for data analytics. By integrating data from different sources and channels through APIs, they can determine their key performance metrics, recognize patterns and trends, and make confident decisions about their future stock replenishments.
For example, if you find out that most of the shipments happen around Christmas Eve or during the summer, you’ll be able to tweak your purchasing and production schedules to ensure that you have the needed resources during peak seasons. You will also be able to optimize their use during off-peak times.
Moreover, with the integration of artificial intelligence in supply chain management, companies gain access to valuable supply chain data that can be used for data analytics.
By understanding supply chains and fine-tuning them, it’s easier to adapt chain operations, handle more orders, and enter new markets, ensuring business growth.
6. Accessibility
Last but not least, the advantage of API-connected systems is that they don’t require any special technical background to access data and understand it. Even if you know nothing about how back-end systems work, API integration won’t cause any difficulty.
APIs are designed to be user-friendly and accessible to all users no matter their technical expertise. You can see all information on a dashboard or mobile app that is simple to understand like any other app.
The dashboard or app may display the shipment’s current location on a map, estimated time of arrival, and any relevant updates such as delays. Customers can also view a detailed history of their shipments, including pickup and delivery timestamps, and even proof of delivery signatures.
Similarly, businesses that integrate APIs can assess a simplified interface for tracking stock levels, viewing product details, and generating reports. The interface can include filters, interactive charts, and graphs to provide an overview of inventory status, sales trends, and forecast data that can be easily navigated by anyone, regardless of their technical expertise.
Choosing the Right API
It’s worth noting that while all APIs are essentially designed to do the same thing, the approaches offered by different APIs can vary. Therefore, it’s important to choose the one that best suits the specific supply chain management needs of the business. To do this, consider the following:
Features and processes provided. There’s a wide variety of APIs, and they all process requests in slightly different ways. So, the first thing to do is identify the features that are crucial to your business and start your search from there.
Documentation. Then check out the documentation offered by the API provider. Good documentation will help your developers understand functionalities and integrate an API smoothly into your systems.
A number of API calls. Compare the number of API calls that different API providers offer per month. It goes without saying that most of them would have limits, but these limits can be very different, making them less or more suitable for your needs.
Security. Data security is of utmost importance in sourcing and supply chain management. To secure sensitive information, the API should be well protected and give you the ability to manage access controls.
Supported data format. Depending on the tools your organization uses across the board, opt for an API that offers a suitable format. As of today, most providers have switched to JSON, but you can also find those still working with XML.
Development support. It’s best to stick with APIs offering either SDKs or example scripts. This will help provide additional support for developers in integrating the API into their systems and save a lot of time when debugging.
Customer support. Responsive support can be crucial in resolving any issues. Read the reviews to find out how quickly providers respond to tickets (or write to them directly) and whether they have any communities or forums to provide additional support.
Some of the Best APIs for the Supply Chain Industry
To make it a tad bit easier for you, we’ve compiled a list of the best APIs that supply chain organizations can benefit from. Make sure to investigate their features and functionalities to choose the one that best suits your specific business needs.
Twilio API. Twilio allows organizations to integrate messaging, voice, and video communication capabilities into their supply chain processes, as well as enable real-time notifications, alerts, and customer engagement.
Travelport Galileo API. This API offers a wide range of travel content and can be used by travel providers to integrate various services, from car rentals to room reservations, in one place.
Humanity API. The platform works with JSON format and provides information on jobs, employees, locations, and businesses. Some of the features that make this API unique are forecasting, mobile accessibility, compliance, and scheduling.
Stripe API. This API offers a wide range of benefits for businesses aiming to optimize their payment processes.
DataSpark. By integrating this API, organizations can gain access to information such as pricing trends, best-selling products, most popular categories, account details, and so on.
Google Maps API. With this API, businesses can leverage powerful mapping and geolocation services. It enables routine optimization, tracking of shipments, geofencing, and location-based analytics, providing insights for supply chain management.
FedEx API. The FedEx API provides access to a range of shipping and logistics services, including real-time tracking, rate calculation, label generation, and address validation.
Why Choose APIs and Not EDIs?
Did you know that the main reason that more than 52% of companies that were quite successful and were even on the Forbes 500 have gone bankrupt since 2000 is that they simply have not been able to master the new emerging technologies? These alarming statistics indicate the importance of making the right shift at the right time.
An API is one such technology that businesses need to embrace in order to function in the competitive landscape brought about by digitalization. This can include implementing APIs for improving connectivity and collaboration across various systems or simply replacing some parts of the stack. Whatever the case, the urge for change has never been as acute as it is today.
Since business success goes hand in hand with a strong social media presence, APIs are not the only thing that provides a competitive advantage. AI-powered tools are a real game-changer in online marketing strategies. So bots, auto DMs, post schedulers, and more are also good options to consider.
Final Thoughts
In the end, adapting to changes can be challenging, but also highly rewarding for organizations in the supply chain industry. And the integration of APIs is one such change that’s taking the world by storm.
Embracing APIs and leveraging their capabilities can open up new opportunities for innovation, efficiency, and growth. In addition, companies can gain valuable insights into their analytics, allowing them to understand where they stand, how their processes can be improved, and ultimately expand into new markets.
It’s also worth adding that embracing APIs isn’t just about winning the game called digital transformation. It’s the necessary measure that companies need to take to survive and thrive in the fast-paced and interconnected world of supply chain.
Choose the right APIs and unlock the potential to revolutionize your supply chain operations. Now is the right time!
