What makes this possible is the notion of multi-tenancy. From a pure software application perspective, this means multiple companies share the same instance of software and the exact same line of code. This is very common with cloud technology. Salesforce.com is like this. The multi-tenant software model enables the vendor to maintain a vastly superior solution for its customers, because they are focused on one single version of their product. They can make updates and improvements several times a year.
Customers can focus on their business processes, not running or maintaining the software. This is also very much NOT the example described above, where a technology vendor hosts a custom version of its software for each specific customer.
Cloud supply chain takes the multi-tenancy concept a step further and applies it to the information network that connects partners. Here, multiple companies share the same network of integrations, data standards and information types. This is huge in supply chain because companies often have common partners, like carriers and 3PLs. Once a partner is “on” the network, they are pre-tooled to support the next companies that adopt the cloud platform. As more companies and partners get on the platform you’ll see a scenario where an entire industry is on the same information page.
Cloud supply chain relieves companies of the daunting task of building their own networks, connecting their partners, mapping the data, and then maintaining the platform on an ongoing basis. Instead, they use a platform that is maintained by a vendor and subsidized by a large community of participants. Like an electric power utility, the participants get access to a multi-billion-dollar electric grid, but only pay a few hundred dollars per month.
In supply chain, where few companies have the ability to instantly locate the status of an order or related shipment in a matter of seconds, cloud is already changing the way companies operate. Suddenly the notion of true agile operations is not a pipe dream, but a reality because now companies do have the ability to see and respond in real time to the events that take place on the other side of the world.
The math is abundantly clear. The supply chain industry is huge and won’t change overnight. And, I’m probably being a little hard on that poor guy who asked the cloud question at CSCMP. After all, he did know a little about cloud math…Cloud = Good. As the network information model part of the supply chain equation becomes clear, cloud will change forever the way supply chains are managed.
About the Author: Greg Kefer is Director, Corporate Marketing, at GT Nexus in Oakland, Calif. GT Nexus provides a cloud-based collaboration platform to automate hundreds of supply chain processes on a global scale, across entire trade communities. For information, visit www.gtnexus.com.