Software APIs Play a Key Role in Digitizing Operations

For little kids, playing “telephone” is a fun game, because as one child whispers the message to the next child in line, it often changes substantially, so it’s anyone’s guess what the last child will hear. In supply‑chain operations, however, there’s no room for garbled communications or a lack of transparency, which is why software APIs play such an essential role in digitizing operations.

An API, or application programming interface, is a set of rules and protocols that enable one software application to share information and collaborate with another. The API specifies how and in what format data will be shared between applications, promoting the seamless exchange of information in real time.

Dan Barrera, head of warehouse automation for MHI member Bosch Rexroth, said APIs “are the connectors” between different information technology systems and the operational technology on the floor of warehouses and manufacturing plants. Through APIs, operational data from multiple sources are collected and displayed on digital dashboards, allowing supervisors to track production, address potential issues and prevent downtime.

APIs are the software tools that keep data flowing into enterprise resource planning, warehouse execution and warehouse management systems, Barrera said. Without APIs serving as translators between multiple systems, warehouses and manufacturing plants would not be able to harness the efficiencies of digitized operations, he said.

APIs serve as the backbone for systems integration and data flow, driving efficiency, speed and accuracy in supply‑chain operations. They allow automated equipment such as conveyors, automated storage and retrieval systems and automated guided vehicles to connect to the warehouse management system (WMS). They also enable real‑time inventory tracking, condition monitoring of equipment and preventative maintenance.

“APIs allow the OT side and the IT side to merge,” Barrera said. “Having all that information displayed allows management to understand how their systems are running and to make informed decisions. If you see a drop in order fulfillment during certain hours of the day, for example, you can explore that problem. But in order to make those decisions, you need to grab that data from different systems, and APIs allow you to do that.”

To see how APIs play their essential role, consider the following simplified supply chain. An ERP system sends a purchase order to the WMS for inbound receipt, prompting the transportation management system to notify the WMS of the shipment’s carrier and estimated time of arrival. The WMS schedules receiving, assigns dock space and eventually updates the ERP with the actual quantities and locations of the products received.

Subsequently, an e‑commerce order is received through the order management system, which instructs the WMS to pick, pack and ship the order. Through integration with the APIs of UPS, the U.S. Postal Service, FedEx or another package carrier, a shipping label is created. Finally, the WMS sends status updates to all the connected systems, including the Transportation Management System (TMS).

Each step along that journey required information to be “extracted and shared” between different software applications through APIs, according to Ashley Rhodes, project manager for supply chain execution systems at MHI member St. Onge. API integration “has been revolutionary for the supply chain and logistics industry because it’s a way to connect diverse systems for real‑time visibility and automation,” said Rhodes, chair of the Solutions Community’s software committee.

“APIs allow for the syncing of warehouse operations and inventory management to improve efficiency and customer satisfaction by streamlining order‑fulfillment processes,” she said. “An API is an important component of any software that end users buy because it allows that application to interact with the next system. For example, we have many clients that use an API to generate their shipping labels through their WMS.”