Cloud Computing Supply Chain: How It Will Change the Business?

From this week’s reading, I learnt the importance of adopting technology in supply chain management. Especially, the supply chain cloud draws my attention, which is usually used by high tech companies or big companies having many offshore. Then, I am curious how can the cloud computing improve the supply chain in efficiency and flexibility, or some other aspects. After doing the research, I hold a whole view of the application of cloud computing in supply chain management, and I also came up with some possible problems may be brought by the cloud computing.

Definition of cloud computing.

The term “cloud computing” refers to the shared software and information that users could access via the web. Rather than storing information on their own physical servers or computer hard drives, users rely on servers that are maintained by the cloud computing software provider (like Apple’s iCloud offering). All information of users is stored and readily accessible online in a 24/7 format, and from various types of devices—desktop, laptop, tablet, and smartphone.

“Private” cloud

The concept of "private" cloud computing involves companies deploying key enabling technologies to create their own "private cloud" datacenters for specific organizations and are not available to the general public. For many enterprises the “private” approach is less threatening than a wholesale move to the public cloud, but should make it easier to hand individual services over to a third-party provider in future.

On a global scale, the worldwide cloud services market is expanding tremendously in the past 2 years, and that trend of growth will probably not stop soon. According to existed researches, supply chain management (SCM) applications have played a sizable role in the overall growth of cloud computing. Among the various supply chain software offerings, the adoption rates are highest in the areas of collaborative sourcing and procurement, demand planning, global trade management (GTM), and transportation management systems (TMS). In many cases, cloud has now become a preference for companies’ supply chain.

Apply in SCM

Since the “on-demand” concept was applied in the supply chain software sector, an increasing willingness of getting solutions, especially in logistics, which are served up via the web on a subscription basis. For most software sectors, users are willing to have faster implementation times, lower upfront investments, and less resource-intensive ways to get the programs to run their businesses. And all the reasons make the cloud computing coming into supply chain management.

Following is a video talking details about moving supply chain to the cloud. 

Pay-as-you-go supply chain

 The applications are sold on a “pay as you go” model, making cloud computing especially attractive. Like, shippers paying only for the services that they use instead of investing in a fixed-capacity IT infrastructure that can either fall short or exceed actual needs. And because they are paid for on an ongoing basis, over time, the cloud-based solutions can be budgeted as operating expenditures rather than capital investments. 

By adopting the cloud supply chain, companies also acquire a strategic advantage over those old-fashioned competitors who still rely on inefficient traditional tools like Microsoft Excel spreadsheets and e-mail to manage their trade compliance, transportation and logistics processes. With cloud computing, companies can even operate on a modest technology budget that collaborate with their suppliers to make more accurate delivery forecasts, minimize excess inventory build-ups and avoid nasty last-minute surprises for their end users.

Following, I am going to exam the advantages and disadvantages of adopting cloud computing in supply chain management.

Pros and Corns

Pros

Cost

provides a low cost way to acquire supply chain management functionality.

Works around IT resource and budget constraints.

Supports highly distributed operational processes at a low cost.

Lower upfront costs.

Speed

achieves faster time to deployment.

May recognize or demonstrate return on investment faster.

Avoids delays associated with long IT project queues.

Quicker time to market for simple to moderate requirements.

Faster release of new features, thus provides a significant edge over the heat competition.

ensures that the flexibility and adaptability of supply chain is enough meet the varied needs of organization.

enables seamless sharing of information between many partners, hence allowing them to function in sync with each other and take quick decisions to maximize profitability and efficiency of the whole supply chain.

Business value

Enables supply chain management in small and midsize businesses.

Builds competencies prior to investing.

Enables companies to try innovations at a lower cost, without any long-term commitment.

Improves agility to respond to user requirements on an ongoing basis.

Often improves usability

Corns

Cloud computing also comes with its own set of challenges. Following are three of the most pressing problems that come up when a company is assessing the cloud.

1. Implementing cloud technology might require a lot of time. Moreover, the decision to adopt the cloud computing usually involves several parts in the supply chain, which makes it vulnerable to even minor conflicts between those parties.

2. Fitting all the requirements of any supply chain or organization is not taken for granted by cloud computing.

3. Security of the data stored in cloud could be a serious problem in cloud supply chain. This security would even be more prominence when we are talking about the importance of securing one’s intellectual property.

The future of clod computing  

Noticing that the security concerns about "the cloud" is consistently top the list of adoption issues. There's still a lot of complexity and uncertainty. People are worried about the security of the data they store in the cloud. Because of this, we could expect to see more secure security applications and techniques coming up.

Mobile devices will also become more powerful and thinner. With the continued rise of mobile computing and the reliance on clouds to support mobile applications, mobile devices will have more capabilities, but the data will live in the cloud. Apple's iCloud is just one example. More cloud computing platforms will become accessible on mobile

Question.

It seems that the supply chain’s migration to cloud computing is not a “if” issue, but a “when” issue. However, in the practical world, does this application fit in all organization? Even if it fit, does everyone can accept it? Especially for the non-tech company with employers are not skillful in this kind of high-technology. So we should think more on the initial step to entering cloud.

 

[1] http://www.logisticsmgmt.com/article/supply_chain_technology_cloud_breakthrough

[2] http://www.informationweek.in/cloud_computing/12-09-26/impact_of_cloud_computing_on_supply_chain_management.aspx

[3] http://www.cloudtweaks.com/2012/09/top-5-cloud-computing-trends-of-the-future/

[4] http://www.infoworld.com/d/cloud-computing/5-key-trends-in-cloud-computings-future-178358

[5] http://slashdot.org/topic/cloud/supply-chains-the-next-killer-application-in-the-cloud/

[6] http://www.computerweekly.com/feature/Cloud-computing-The-answer-to-supply-chain-woes