Traditional business
software systems were primarily used to automate the processes within a single
enterprise. It did not have the capacity to automate processes that occur
between companies working together in a global market. A Supply Chain by
definition, is designed with the focus on inter- company collaboration which span
networks around the globe. It is the active management of activities to
maximize customer value and achieve a sustainable competitive advantage. To
achieve such goals, it is vital to have efficient business processes and implement
adequate information systems. With the supply chain networks growing globally,
it is a challenge to enable massive levels of information sharing and process
automation that these networks require. The answer to this challenge is a
technology that harnesses the power of the internet to connect and communicate
across company boundaries and provide real time data to all the parties
involved in the supply chain. Enter the Cloud
technology solutions.
How does it work?
A cloud network on a high
level can be envisioned as a community of customers and service providers.
Shippers, service providers, manufacturers all join the cloud based community
and readily connect with each other. The service provider can find its customers,
clients, carriers etc. When a provider updates his schedules, services, pricing
or any announcements, all the trading partners can see the information at the
same time. The platform intends to provide complete end to end visibility in
the network like the capacity to provide real time visibility of inventory and
shipments and logistics tracking. Cloud computing provides three types of
service: Software as a Service (SAAS), Infrastructure as a Service (IAAS) and
Platform as a Service (PAAS), which entail different services based on a client’s
needs. Software as a Service (SaaS) provides business applications that are
delivered as a service. This helps reduce software complexity and costs,
enhances accessibility to services and speeds up the time to market
A simple SCM architechture with cloud
What are the advantages?
- Better forecasting and planning:
The platforms will enable the providers/companies
to collaborate with the chain’s retailers, suppliers and distributors who play
a major role in demand forecasting. These platforms are capable of performing
analytics on data available in the internet and perform more accurate demand
forecast for all the partners in the chain. This would help manage the variability
problems due to demand providers often face with their inventory.
- Integrating Inventory management with wireless
devices
The technology to integrate the RFID and other
bar coding systems with the platform
allows a centralized data management system to deliver the
identification or tracking of any good across the entire supply chain.
- Collaborative design and product development
Collaborative product development
includes the use of product design and development
techniques
across multiple branches of same organization or between different
organizations.
The development process can be shared between
different organizations. These processes
include
specific information, marketing firm, test result and design changes as well as
customer feedback.
The long term benefits of migrating to such a
platform are to have the essential tools to drive the continuous improvement of
supply chain reliability and predictability. The main challenge for an
organization is however to port from an existing on premise information system
style to the cloud. With the technology still in its infancy, it is hard to translate
the benefits of the migration into increased revenue or cost savings for the
organization. Having said that, will the organizations realize the untapped potential
and be prepared to put in the upfront cost or will they stick to their
traditional approach?
References:
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