Tuesday, September 30, 2014

Supply Chain Management and the Cloud Technology

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?


1 comment:

  1. This post is really nice and informative. The explanation given is really comprehensive and informative..

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