Picture this: Your CEO asks for the total landed cost of your best-selling product. Simple question, right? Yet your team scrambles through spreadsheets, shipping records, and financial systems only to piece together a rough estimate weeks later. This scenario plays out daily across global supply chains, not because companies lack data, but because their data lives in both isolation and ambiguity. The good news? There’s a less painful way to unlock these insights, and it starts with fixing how your supply chain data talks to each other.

In this article, I’ll use the example of Total Landed Cost to highlight the significant disconnects in supply chain data and the missed opportunities. Specifically, we have broken data links between products, shipments, cost types, and unplanned events. Also, this unfortunate issue not only affects costs but also service performance, initiative, and overall competitiveness. Next, I’ll detail how disjointed data impacts all supply chain stakeholders, including operations, finance, and planning. Surprisingly, this is not just a visibility issue but also a major gap in understandability. Finally, I’ll offer a solution, a data-centric framework, to help you link supply chain silos and financial data together. Ultimately, this will provide a clearer, more informed view for all stakeholders.

1. Total Landed Cost Visibility Is Just One of Many Missed Opportunities Due to Disconnected Supply Chain Data.

First, let’s consider a hypothetical scenario at TechGear Manufacturing. Their procurement team saved $2 million by switching to a lower-cost supplier in Asia. Six months later, they discovered these savings were negated by higher freight costs, longer lead times, and increased inventory holding costs. Moreover, they only uncovered these issues by manually compiling data from various systems. Indeed, this example highlights how supply chains lack data access as well as limited understanding of how to accurately estimate the Total Landed Cost (TLC) and associated risks. So, let’s look in more detail at this problem of disconnected supply chain data and missed opportunities.

a. Disconnected Supply Chain Data: Take Total Landed Cost (TLC) For Example.

For most supply chain professionals, unintended consequences are the norm. However, what may not be as clear is the main cause of these adverse outcomes. Namely, most supply chain decision-makers are locked in isolated, standalone systems, lacking both end-to-end visibility and contextual understanding. Moreover, this does not just happen with calculating Total Landed Cost. Indeed, these isolated perspectives degrade service performance, stifle initiative, and hamper overall competitiveness of today’s supply chains. So to further understand this data disconnect problem, below I’ll first describe the function of major supply chain systems and the key data each use.

Data Element Breakout of Total Landed Cost By Enterprise System

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• Enterprise Resource Planning (ERP): purchase orders, supplier invoices, inventory carrying costs, and other financial transactions. ERP systems focus on tracking business resources such as cash, raw materials, production capacity, and status of business commitments.
• Accounting System: financial transactions, accounts payable and receivable, payroll data, tax information, currency rates, and the general ledger. This system is focused on financial transactions and can share data or modules with an ERP.
• Order Management System (OMS): customer purchase orders, customer information, inventory data, shipping information, payment details, promised date, and order status. OMS focuses on fulfilling orders. 
• Warehouse Management System (WMS):  inventory levels, safety stock storage costs, picking / packing expenses, labor costs, and handling fees to name a few. WMS software focuses on products.
• Transportation Management System (TMS): load tenders, Bill of Lading (BL), freight costs, fuel surcharges, carrier accessorial charges, demurrage fees,delivery times, carrier invoices, and carrier payments. TMS platforms focus on shipments. 
• Global Trade Management (GTM) System and Services: customs duties, tariffs, import/export fees, HTS codes, country of origin, commercial invoices, terminal handling fees, insurance and compliance fees to name a few. Some GTM systems and modules focus on shipments while other software functionality has a product-centric or customs-centric view. Moreover, Total Landed Cost data can exist in many of these systems to include 3rd party systems.

So, you can see that there are many enterprise systems in the supply chain that serve a useful purpose, but they are complex and challenged to share data. In fact from a supply chain analytics perspective, we have a data integration nightmare that undermines insights and stifles informed decision-making.

b. The Opportunities Lost Due to Disconnected Supply Chain Data.

Now, this article uses Total Landed Cost as an example to highlight just how disconnected supply chain data is. However, this data disconnect also affects many other supply chain analytics use cases. This includes supplier sourcing, supply chain planning, on-time in-full (OTIF) visibility, and transportation procurement to name a few. To list, below are the opportunities lost due to disconnect supply chain data.

Lost Opportunities Due to Supply Chain Data Silos

• Optimize Product Pricing: Without integrated data, it is difficult to precisely price products due to hidden costs.
• Improve Profitability: Disconnected data obscures true cost insights. Hence, this makes it hard to identify areas for cost reduction and margin improvement.
• Picking Best International Supplier: Incomplete data often leads to businesses choosing suppliers with higher hidden costs. Thus, this affects overall supply chain efficiency.
• Making the Best Shipping Decisions: Lack of up-to-date data on shipping cost and lead times results in inefficient routing and higher transportation expenses.
• More Confidence Negotiating Contracts Knowing Overall Price and Lead Times: Without a holistic view, procurement officers are not confident in their negotiating position. As a result, they will overpay or agree to unfavorable terms due to incomplete information.
• Able to Collaborate with Partners to Reduce Costs, Improve Service: Disconnected data hinders effective collaboration. As a result, this prevents joint cost-saving initiatives and service improvements.
• Determining Optimal Inventory Levels: Inaccurate or incomplete data leads to overstocking or stockouts.
• Forecasting Cash Flow Requirements: Disconnected data results in inaccurate cash flow forecasts. Hence, this leads to financial strain and missed opportunities.
• Managing Customs Compliance Costs: Without integrated data, managing and predicting customs compliance costs becomes challenging. Also, these data disconnects increase the risk of penalties.
• Able to Enter New Markets, Confident in Expected Costs: Incomplete data leads businesses to underestimating or overestimating costs. As a result, market entry decisions are riskier.
• Executives Able to Make Informed Decisions Across the Supply Chain: Disconnected data limits the ability of executives to make informed decisions. Consequently, this has a direct effect on overall business performance.

c. More References: Total Landed Costs

For an excellent primer on Total Landed Cost, see Drip Capital’s article, Landed Cost | Definition, Calculation, Formula & Price. Additionally, for a more detailed discussion on the disconnects with Total Landed Cost, see Grant Sernick’s postings, What Supply Chains really need. Also, for more on the challenges with compiling Total Landed Cost, see Qad’s article, What is Landed Cost and Its Importance?. Lastly, see Gelston Howell’s article, Total Landed Cost Analysis: Identifying Hidden Costs in Global Supply Chains.

2. How Disjointed Supply Chain Data Adversely Affects Operations, Finance, and Planning: Total Landed Cost Example.

When your data lives in separate systems, it’s like trying to solve a puzzle with pieces from different boxes. For example, a global manufacturer loses a million-dollar contract because their staff took weeks to provide a competitive price for their product. On the other hand, their competitor won the business by responding the same day. Worse, the global manufacturer had little confidence that their price quote was even profitable. This painfully, but common, scenario shows why disjointed data isn’t just an IT problem – it’s a business killer. So, let’s look at this disconnected Total Landed Cost data problem from three different stakeholder perspectives. Namely, operationally, financially, and from the supply chain planner’s viewpoint.

a. Operations Struggle with Tracking Indirect Total Landed Cost.

Here’s a typical scenario: A mid-sized electronics manufacturer tracks shipping costs in a TMS, customs fees in a compliance system, and supplier costs in their ERP. When the CEO asked for the true cost impact of recent port congestion, it took three weeks and five team members to compile the data. Again, this highlights that supply chain data is many times incomplete, inaccurate, and definitely not timely. Further, it is often duplicated and not linked for easy analysis. Additionally, in international trade, the final product is often priced and sold before all indirect costs are incurred. As a result, it is a challenge to compile accurate Total Landed Costs for a single purchase, shipment, activity, or event like port congestion.

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b. Finance Challenged Allocating Indirect Charges to Total Landed Cost Within a Dynamic Supply Chain Environment.

Within supply chains, finance and accounting teams face the challenge of allocating indirect charges to Total Landed Cost (TLC). Specifically, indirect charges are often attributed to multiple products, services, and activities. Moreover, analysts must extract these charges from various systems. Further, these costs, both budgeted and actual, are difficult to track because they are invoiced and paid at different times. Indeed, this happens sometimes weeks after the finished product is delivered and paid for by the end customer. In this financial chaos, analysts must allocate these indirect costs to TLC. As shown below, there are various methods for allocating costs, some effective and others less so.

The Many Accounting Methods to Allocate Indirect Costs

• Purchase Amount Using Product Data. This is the easiest method as each product is then allocated indirect costs by its purchase amount.
• Actual Weight or Volume Using Shipment Characteristics. In this case, the allocation method is only for indirect costs related to a shipment. This is a preferred method if finance has access to the data containing shipment characteristics. 
• Customs Duty Amount. This allocation method is only for indirect costs related to import / export shipment loads. Again for analysts to properly allocate costs, they would need the data details on the customs charges.
• Purchase Quantity. This is also an easy method, but only used when no other parameter data is available. Regrettably, this allocation method is fairly arbitrary unless all products have the same characteristics. 
• Internal Coefficient for Each Item. Here, a company may internally allocate costs by a pre-arranged coefficient related to the product and indirect cost. This has many advantages if the business has a good handle on their costs and they keep the coefficient update as things change.

So supply chains, especially with data not well linked between systems, have a serious challenge budgeting and allocating indirect costs to compile Total Landed Cost. For more discussion, see Grant Sernick’s postings, What Supply Chains really need.

c. Planners Are Digitally Challenged to Minimize the Gap Between Projected and Actual Costs.

Supply chain planners have the toughest challenge. This is because their responsibility is to develop accurate estimates. More specifically, their goal is to minimize the gap between what they projected and actual Total Landed Cost. Indeed, without a comprehensive view that includes indirect charges such as tariffs, customs duties, and handling fees, planners cannot accurately forecast Total Landed Cost adequately. For example, if a planner lacks up-to-date data on customs compliance costs, they will likely underestimate the Total Landed Cost. As a result, this leads to budget overruns and financial discrepancies. The gap between projected and actual costs isn’t just a reporting headache; it’s a strategic blindspot that results in missed opportunities, subpar cost optimization and service level failures.

d. Due to Disjointed Data, Supply Chains Lack Both Visibility and Contextual Understandability to Make Informed Decisions.

To sum it up, disconnected supply chain data leads to a lack of total visibility and contextual understandability. As a result, decision-makers are many times oblivious to their decisions’ impact on total costs and service performance. Specifically, they lack understanding about the relationships between products, shipments, cost types, and unplanned events. Moreover, these broken digital links impact global supply chains more because of significant lags between service delivery, invoice receipt, and payment, affecting cash flow. Lastly, different stakeholders—business, carriers, operations, and finance—each have unique concerns, but disjointed data means they all lack the necessary information to make informed decisions. To summarize, below are the key information gaps that supply chain stakeholders lack. 

Information Supply Chain Stakeholders Lack

• Products and Containers. Stakeholders lack understanding and visibility over how weight, volume, and dimensional weights affect costs. 
• Shipments. Further, stakeholders lack understanding of products in a shipment. Also, they lack visibility of products in shipments and their associated costs. 
• Total Landed Cost. Additionally, stakeholders lack both understanding and visibility of different cost types associated with a product, shipment, event, or activity.
• Unplanned Costs and Delays (Exceptions). Lastly, stakeholders lack understanding and visibility of the impact of supply chain disruptions and exceptions. So, they end up not trusting their plans, and thus, do not know what to expect day-to-day or in the near future.

So, the end result is that supply chain stakeholders lack both visibility and contextual understanding to make informed decisions. Moreover, this is most evident when estimating and compiling actual charges for Total Landed Cost. For a more detailed discussion on this subject, see Grant Sernick’s postings: What Supply Chains Really Need (Part 2), The Lowdown on Total Landed Cost, & (Part 2).

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3. Data-Centric Framework to Link Your Supply Chain and Financial Data Together

To overcome the digital challenges in managing Total Landed Cost, organizations need a data-centric framework that links supply chain functional silos and financial data together. Specifically, this data-centric supply chain framework links products to containers to shipments to costs to planned and unplanned events. This will enable stakeholders to draw their insights from a common data-centric framework. Thus, the entire supply chain can make informed decisions and close the gap between planned and what is actually happening. To stop the pain and disconnected insights, below are three recommendations for adopting a data-centric framework for supply chains.

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Below are three actions that I recommend you take to establish a data-centric framework in your supply chain. These actions include: 1) start using Transport Load IDs to link your supply chain data; 2) adopt a Data-Centric Business Strategy; 3) leverage Data-Centric Business Technologies versus remaining application-centric. 

a. Start Using Load IDs that Links Shipping Data.  

Better Shipping Data Analytics Results: Use Of Load IDs To Achieve The Best Efficiency, Visibility, And Financials

Indeed, shipping data has always had a missing link. As a result, it’s extremely challenging to connect products, shipments, costs, planned events, and unplanned events. While supply chain analysts have used IDs like purchase orders, tracking numbers, and invoice numbers to link their data, a better alternative is a Transport Load ID. This ID is generated by the shipper (or their representative) when they identify their intentions to transport goods (a load). Similar to a shipment reference ID, this Load ID can link all shipping and supply chain data, providing a simpler way to achieve total visibility and contextual understanding.

For details, see my article, Better Shipping Data Analytics Results: Use Of Load IDs To Achieve The Best Efficiency, Visibility, And Financials.

b. Implement a Data-Centric Business Strategy for Your Supply Chain.

Most supply chain decision-makers are overwhelmed by data. Worse, the data yields few insights. This is because supply chain data is often disjointed, duplicated, ambiguous, inaccurate, and incomplete. Moreover, a major contributor to digital mess is that most supply chains are application-centric, not data-centric. Indeed for decades, supply chains have prioritized applications first, treating data as a by-product rather than a strategic asset. Moreover, these enterprise applications become outdated quickly. locking their precious data in functional silos. Without a doubt, isn’t it time to shift to a data-centric approach? To do this, I recommend that senior executives take the lead by implement a data-centric business strategy.

To get started, see my article, A Data-Centric Business Strategy Checklist: The Way To Energize A Digital Enterprise To Be More Agile, Bold, And Simplified.

c. Leverage Data-Centric Tech, Making Data First Over Software and Automation. 

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Also, the rapid advancement in data analytics and AI is already driving a shift toward data-centricity in business technology. Traditionally, supply chains have focused on implementing complex enterprise software and automating manual tasks. As a result, businesses have achieved efficiencies, but also this has led to rigid, complex systems where data is treated as a by-product. 

Now with the emergence of data-intensive technologies such as AI and Internet of Things (IoT), the tech industry is starting to offer solutions that prioritize data over software. For example, instead of just automating workflows, companies are using AI to analyze vast datasets for predictive insights, improving decision-making and to enable operational agility. Moreover, this data-centric approach is gaining traction across various tech disciplines, including data management, AI development, enterprise architecture, and semantic knowledge graph tech. For more information on leveraging this new tech, see my article, Data-Centric Business Tech: New And Better Ways To Shatter Our Obsession With Software And Automation.

Conclusion.

So, in this article, I used Total Landed Cost as an example to help reveal just how massive the disconnects are in our supply chain data. Along with that I identified the many missed opportunities and consequences that affect all supply chain stakeholders. This includes not only the visibility challenges that operations, finance and planning have, but also this huge gap in contextual understanding. Specifically, the lack of digital linkage between products, shipments, costs, planned events and unplanned events (exceptions). Lastly, I offered a data-centric framework solution for linking supply chain data. This includes the use of Transport Load ID, adopting a Data-Centric Business Strategy, and leveraging Data-Centric Business Tech. 

Lastly, do you need help with an innovative solution to make your supply chain systems work together? I’m Randy McClure, and I’ve spent many years solving data interoperability and visibility problems. As a supply chain tech advisor, I’ve implemented hundreds of successful projects across all transportation modes, working with the data of thousands of shippers, carriers, and 3rd party logistics (3PL) providers. I specialize in proof-of-concept and operational pilot projects for emerging technologies. If you’re ready to modernize your data infrastructure or if you are a solution provider, let’s talk. To reach me, click here to access my contact form or you can find me on LinkedIn.

A Data-Centric Business Strategy Checklist: The Way To Energize A Digital Enterprise To Be More Agile, Bold, And Simplified

For more from SC Tech Insights, see the latest articles on Interoperability, Data Analytics, Finance, and Supply Chains.