Wednesday, October 2, 2013

Will the "Cloud" mitigate risk and create more resilient supply chains?

I was excited to explore and write about this week's topic of the role of technology and the web on global supply chains. Technology has transformed many industries by decreasing variability and increasing efficiency. While many companies are taking initiatives to fix their own individual supply chains, I was intrigued by the article "Cloudy with a chance of change for supply chains." Sean Kilcarr writes in his blog, Trucks at Work, about how the integration of the cloud technologies has the ability to change the way supply chains are managed.

Kilcarr talks about how transportation ultimately is the link between vast supply chains, especially trucks in the United States. He explains how supply chain management draws information from data to make the supply chain "faster, more efficient, and less expensive." Kilcarr stresses that cloud computing will change how supply chains work and are managed.

Cloud computing can be a very attractive solution to the current state supply chain management. There are three major reasons why cloud computing is a revolutionary technology. First, it allows businesses access services without actually owning or running them. Second, it allows the services to be turned up or down based on the company's needs. This feature is very attractive because it allows for flexibility in the application of services. Thirdly, the cloud can complement additional solutions or technologies that businesses may already have in place.

As we have studied in class, visibility in the supply chain is crucial to keeping costs down and inventory managed. I would strongly agree with the Kilcarr's point that the cloud could drastically increase supply chain visibility. Not only would the cloud integrate every player in the supply chain but it would mitigate the risk that each link feels when their own fractured view of the supply chain backfires. Most importantly, cloud computing will allow different members of a supply chain to access the data from each and every link. This not only will make forecasts more pristine but will make inventory management more efficient. This will also greatly affect the amount of money spent in transporting to goods along the supply chain.

One of the only negative arguments about cloud computing was the lack of potential security for businesses who plan on utilizing cloud computing for their supply chain. I would argue that while this may be an issue now that it will not become an issue if this technology has a high demand in the business sector. I truly believe that if this technology is implemented that it has the ability to change the entire way that supply chains are managed. Hey, look at Dropbox and Apple they have revolutionized the way that people share and save individual information. Imagine the opportunities that cloud computing hold for the supply chain!

If companies begin to implement cloud computing, will prices increase for this technology as demand increase? Will security be a derailer for implementation along the supply chain? Are some supply chains so vast that this technology would not be relevant?


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