Cloud in Supply Chain

This week’s article talking about cloud computing in supply chain triggers my interest research on this topic. And I found both supportive and opponent opinion on the application of cloud computing in supply chain management.

Generally speaking, cloud computing enables the sharing of computing resources, enterprises can complete their computing in remote server, rather than store and run the software and data on a local server or PC. The most direct aspect is that enterprises do not have to own the physical infrastructures of server and even software. Then it can avoid capital expenditure and save a lot of expense on it, especially when high quality and performance are required. Small and medium companies like cloud computing even more, because by using cloud computing services, they just need to pay for the computing resources they have used, which is the so-called on-demand services.

 When it comes to supply chain software, some people think the cloud computing fits for logistics and supply chain very well because it’s a global distributed system and connected a lot of participants. In the cloud computing, data from different resources are collected and can be presented in dashboards. Tracking the logistics data in real time will become easier if using cloud. As a result, leaders can make wise decision based on the real-time information. Cloud is a more extensible and flexible tool than previous ones. A research show that in 2012 there was a 40 percent increase in the use of the cloud by supply chains, and it’s already half of the transportation supply chains is using the cloud.  [1]  Some people also think in the previous time, companies in different regions and time zones cannot keep up with changes immediately. Cloud computing technology enables companies to get the real-time, and boost the collaborative supply chain system. For another thing, applying cloud computing technology into supply chain management will make companies more responsive. They can add or reduce suppliers and even switch between suppliers.

On the other hand, some people hold the completely opposite opinion that supply-chain software is the killer of cloud. The reason is more from the economy perspective. Because most companies have already established their supply chain information system, most of them must be reluctant to move that to cloud. At the meanwhile, some companies more prefer not to share the IT infrastructure with others.

From my point of view, cloud is almost the hottest topic these days. Applying it into supply chain management can do reduce cost of buying software and IT infrastructures. It can also make the companies more agile to the every change in supply chains. To maximize the advantages of supply chains by using cloud computing, I think the most important thing is the cooperation between companies. If companies and its suppliers are willing to post their true information which is more specific into the database, then they can share very important data together and make the right decision. This is also good way to reduce waste and operate effectively. For example, if the downward suppliers can get the right number of how much products or raw material is need from its upper suppliers. It can get an idea and prepare for the changes. This is a good way to prevent bull whip effect.

Questions:

As the development of e-business brings a lot of both challenges and opportunities to companies, the logistics of supply chain becomes distributed and decentralized. Does is a good thing or not? Does it improve efficiency?

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[1] http://www.formtek.com/blog/?p=3583

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