Tuesday, October 15, 2013

How Cloud Technology has transformed the international supply chain management?

At the age of globalization, more and more European and American manufacturers move their manufacturing plants offshore to take advantage of the much cheaper labor in Asia and Africa. This has helped them save tons of money, but one of the main disadvantages is the significantly longer and more complex supply chain necessary for moving products to the end customers in North America and Europe.

While it makes sense to expect delivery of domestic goods to doorsteps within 2 days, it is highly likely to take 3 to 4 weeks to deliver the same products from offshore to the end users. The lack of a robust transportation system and relevant logistics data in some developing countries have further compounded the challenge.   

An international shipper may connect to hundreds, or even thousands of trading partners including Manufacturers, origin draymen, consolidators, ocean carriers, customs brokers, pier draymen, stack train operators, destination draymen and freight payment companies, as is shown blow:

International supply chains involve complex relationships with multiple trading
(Source: Accenture)

The tricky part is: many trading partners are small and unsophisticated, and thus lack the abilities to get connected to the other trading partners seamlessly, which will compose a threat to the smoothness of of global supply chains.

The solution to this challenge is a cloud-based, social-media-like platform where shippers, receivers and service providers are all virtually connected to each other. Just like how it works on Facebook, manufacturers can "friend" any air carrier, truck line or ocean carrier, and service providers can "friend" its clients and customers. All the news announcements, changes, contacts, scheduling, public pricing, service options are visible to anyone in the community, and thus allow anyone in the supply chain to make a timely response. 

UPS has set a great example by introducing a cloud-based platform to improve international supply chain management. UPS Order Watch - the cloud-based platform has streamlined the management of vendors and facilitated PO-specific communication between vendor and customer. It is a good trial before getting the cloud-based system to roll out to other industries. Many jobs still need to be done, but I personally buy into the power of "clouding" in supply chain management. What do you think?


1 comment:

  1. Hi
    nice article.For good marketing cloud based technology is more reliable. And we can get the customer producer and market in one platform.So it is very easy to communicate.As a customer i like this system.
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