The definition of supply chain involves a network of trading partners engaging in the exchange of information and goods. People and organizations within a supply chain are often spread out over the globe and across various organizations, so it makes sense that cloud computing is the resource of choice when establishing a well-networked supply chain.
Support for this theory is evidenced from a study recently authorized by SCM World entitled “Supply Chain and the Future of Applications“. Claims made within the study notably includes that 46% of participants in the study claim that more collaboration within a supply chain means that problems will be solved in half the time. Further to this, the report claims that the larger supply chains are becoming more dependent on platforms within the cloud in order to achieve faster and more accurate problem solving by harnessing the enhanced capability for collaboration.
The main benefits of using cloud computing to enhance the capability of the supply chain include a higher visibility of items as they move through it, faster and more consistent sharing of information with global partners and more capacity for the automation of components within the supply chain.
Higher visibility of goods as they travel through the supply chain is achieved via hosting in the cloud as their status can be distributed throughout the supply network. For example, the exact time goods will arrive can be revealed in order to ease the organization of delivery processes. There are many working parts to a logistical system, these include suppliers, manufacturers, distribution centers, retailers and finally customers. With so many components, greater visibility within the supply chain of goods as they pass through is essential in order to inform the interested parties about the whereabouts of specific products, potential re-networking and other specific needs to ease the passage of goods.
The capacity the cloud provides for information sharing in real time between interested parties means that supply chains now have more in common with social media networks than the former platforms for enterprise communications, due to the currency and speed of information. By harnessing the potential of the cloud, partners within the supply chain have the capacity to give up to date reports on shipments, products and factory and logistical challenges for example. All of this information is available in real time via one update from the holder of specific information. This is an astounding progression in the capability for the sharing of information provided by the ascension and availability of cloud computing.
Automation of the supply chain within the cloud means an increase in reliability, responsiveness and efficiency. The former cumbersome method of using paper documentation to chart payments and the status of products and deliveries is done away with. As a further advantage, less hands in the supply chain process means that margins for error are all but eliminated. As interactions are increasingly handled electronically the potential causes for consternation of the former labor intensive and error prone supply chain processes are eliminated.
A report by Gartner predicts that the value of the supply chain market will reach $3.8 billion some time in 2016. The main challenge to this predicted growth is the growing complexity of the technology involved. Many of these complexities will be solved by cloud computing’s capacity to provide greater visibility of goods in transit, the ability to share information instantaneously throughout the supply chain network and greater facilities for automation among other potential benefits. These three factors combined with the potential for more development provided by the cloud mean that the challenges posed by supply chain communications and logistics are more easily remedied, leading to more efficient operations.
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