Saturday, October 12, 2013
Cloud based Supply Chain Management
In our Week 6 class, we could not stop admiring the magic of cloud computing when we learnt that this technology can help in minimizing the supply chain risk and maximizing business performance. The discussion in the class motivated me to find more information about cloud based supply chain network. I came across few articles that gives indepth analysis of how cloud computing can actually mitigate some of the supply chain risks. One of these articles is How Cloud Computing can mitigate supply chain risks by Frost and Sullivan.
Greater flexibility, scalability and lower IT costs are some of the key benefits that incentivizes businesses to adopt cloud computing. The lesser known but very significant benefit is the resilience it provides to the businesses that are vulnerable to natural disasters and face disruption to its operation in the event of such disasters. The development of lean manufacturing and increasing complexity in global supply chain has rendered many business in Asia Pacific region increasingly vulnerable to natural disasters. Some of the examples are Chrischurch earthquake in New Zealand in 2011, the Japanese tsunami in March 2011 and major flood in Thailand and Australia in 2010 and 2011 respectively. These disasters disrupted various business operations, impacted their factories, warehouses and their IT systems. 65% of the affected organizations strongly feels that if they had accessed IT application via cloud, the impact of these disruptions would have been low.
40% of the organizations that were impacted by these disasters believe that cloud based solutions helps in settling the multiple subsidiaries in different location that have different currencies. Another one third believes that cloud based solution make decentralized business possible thus maximizing its outreach to multiple locations.
Cloud computing provides a resilience to the business to the risk of disruption to their operations resulting from natural disasters. This especially critical in the manufacturing, logistics and distribution industries where IT solutions such as ERP are critical for business operation.
Source: Frost and Sullivan, “How Cloud Computing can Reduce Supply Chain Risks:The Factors that are Driving Uptake of Cloud Solutions in the Manufacturing and Logistics Sectors