Most Read
Most E-mailed
E-mail Article
Print Article
Cloud Computing for Supply Chain Solutions
The case for leveraging the Cloud to run your supply chain
Amar Singh, president and CEO of Amitive.
By Amar Singh
When has advanced supply chain management technology been available to companies of all sizes, even those with ever-shrinking budgets?
Since cloud computing has transformed how global business networks interact, delivering a flexible, collaborative model without breaking the bank.
"We didn't think we could get into a supply chain solution for a price that met our budget," says Thomas Pichler, CEO of Orthera, a startup that delivers custom orthotics through retail locations.
Orthera's ability to produce custom orthotics on a massive scale hinges on a seamless supply chain, wherein business processes are disparate and complex: orders come in from several hundred retail locations around the country, which then interface with corporate in California and manufacturing sites in South America and Southern California. But investing in traditional SCM software was simply not an option for Orthera. First of all, the company viewed traditional software as too rigid and failing to meet the needs of today's global manufacturing communities; and secondly, Orthera felt that the traditional software options were cost-prohibitive for small to midsize companies.
"Especially for a company our size, it's all about a low-cost, low-risk model that helps us serve our customers better than our competitors," says Pichler.
Orthera is not alone. Across all industries and regardless of company size, many supply chain executives are fed up with the steep prices and outdated architecture of traditional SCM software. Most companies today don't have the power and influence to dictate standardized business processes across the supply chain like, for example, Wal-Mart; nor do they have the money and resources to pay an army of people to tightly manage an agile, cost-effective, global supply chain. As a result, many companies are finally demanding a better way to create a collaborative, transparent and flexible supply chain.
Collaborative Computing — The Holy Grail of SCM
While planning a production line based on just-in-time (JIT) supplier and inventory management was a leading edge capability for SCM a decade ago, many businesses — both large and small — have embraced a new way of doing business, extending far beyond this model. But SCM software hasn't kept up, and for many organizations that operate in this new outsourced manufacturing environment of multinational, multi-enterprise community relationships, traditional SCM is no longer relevant.
The gap between business model and available software is being closed by workarounds and "management by spreadsheet," a people-intensive, expensive way to operate — and one fraught with data fragmentation and lack of visibility. The game-changer for the SCM world is "Cloud computing" and, as a subset of that, software-as-a-service (SaaS) applications.
Simply put, the "Cloud" is a metaphor for the Internet-based tools used by a multitude of diverse customers at any time from any location. Industry analyst firm Gartner defines Cloud computing as a style of computing where massively scalable IT-enabled capabilities (such as software) are delivered as a service to external customers using Internet technologies.
As a subset of Cloud computing, SaaS is defined by Gartner as software that's owned, delivered and managed remotely by one or more providers. The provider delivers an application based on a single set of common code and data definitions, which are consumed in a one-to-many model by all contracted customers on a pay-for-use basis or as a subscription based on use metrics. If the software application is written in such a way that it is "massively scalable," then SaaS is considered a form of Cloud computing.
In addition to SaaS, integration-as-a-service (offered by companies like Cast Iron, Boomi), platform-as-a-service (Amazon, SalesForce.com) and infrastructure-as-a-service (HP IaaS, Go-Grid, Box.com) are also components of Cloud computing.
When has advanced supply chain management technology been available to companies of all sizes, even those with ever-shrinking budgets?
Since cloud computing has transformed how global business networks interact, delivering a flexible, collaborative model without breaking the bank.
"We didn't think we could get into a supply chain solution for a price that met our budget," says Thomas Pichler, CEO of Orthera, a startup that delivers custom orthotics through retail locations.
Orthera's ability to produce custom orthotics on a massive scale hinges on a seamless supply chain, wherein business processes are disparate and complex: orders come in from several hundred retail locations around the country, which then interface with corporate in California and manufacturing sites in South America and Southern California. But investing in traditional SCM software was simply not an option for Orthera. First of all, the company viewed traditional software as too rigid and failing to meet the needs of today's global manufacturing communities; and secondly, Orthera felt that the traditional software options were cost-prohibitive for small to midsize companies.
"Especially for a company our size, it's all about a low-cost, low-risk model that helps us serve our customers better than our competitors," says Pichler.
Orthera is not alone. Across all industries and regardless of company size, many supply chain executives are fed up with the steep prices and outdated architecture of traditional SCM software. Most companies today don't have the power and influence to dictate standardized business processes across the supply chain like, for example, Wal-Mart; nor do they have the money and resources to pay an army of people to tightly manage an agile, cost-effective, global supply chain. As a result, many companies are finally demanding a better way to create a collaborative, transparent and flexible supply chain.
Collaborative Computing — The Holy Grail of SCM
While planning a production line based on just-in-time (JIT) supplier and inventory management was a leading edge capability for SCM a decade ago, many businesses — both large and small — have embraced a new way of doing business, extending far beyond this model. But SCM software hasn't kept up, and for many organizations that operate in this new outsourced manufacturing environment of multinational, multi-enterprise community relationships, traditional SCM is no longer relevant.
The gap between business model and available software is being closed by workarounds and "management by spreadsheet," a people-intensive, expensive way to operate — and one fraught with data fragmentation and lack of visibility. The game-changer for the SCM world is "Cloud computing" and, as a subset of that, software-as-a-service (SaaS) applications.
Simply put, the "Cloud" is a metaphor for the Internet-based tools used by a multitude of diverse customers at any time from any location. Industry analyst firm Gartner defines Cloud computing as a style of computing where massively scalable IT-enabled capabilities (such as software) are delivered as a service to external customers using Internet technologies.
As a subset of Cloud computing, SaaS is defined by Gartner as software that's owned, delivered and managed remotely by one or more providers. The provider delivers an application based on a single set of common code and data definitions, which are consumed in a one-to-many model by all contracted customers on a pay-for-use basis or as a subscription based on use metrics. If the software application is written in such a way that it is "massively scalable," then SaaS is considered a form of Cloud computing.
In addition to SaaS, integration-as-a-service (offered by companies like Cast Iron, Boomi), platform-as-a-service (Amazon, SalesForce.com) and infrastructure-as-a-service (HP IaaS, Go-Grid, Box.com) are also components of Cloud computing.
RSS Feeds
