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Steve Dowse, CTO of International Asset Systems (IAS) looks into why Cloud Computing can vastly simplify your supply chain.

Article by Steve Dowse, CTO of International Asset Systems (IAS)

Current economic circumstances drive the demand for a more effective model of delivering applications and computing services. Today’s cost- and resources-constrained business world requires executives and IT managers to constantly find new ways to innovate, and the potential that cloud services offer continues to be attractive. A recent study from the research firm IDC predicts that of the projected $27 billion in net new IT revenue in 2013, 27% will come from IT cloud services. The supply chain industry is prime for the cloud because of the sheer number of partners and suppliers that must collaborate to make products.

The supply chains of today are highly fragmented with silos of information that make it impossible to share information with trading partners. Businesses need technology platforms that empower them to visualize a product in every stage of its lifecycle, in real time, from raw materials through delivery to end customer. Management must be able to make quick decisions to re-route shipments, locate containers, and collaborate with suppliers to meet customer demand.

Businesses need to communicate and share data with their entire trade network. To do this, you need solutions that go beyond the four walls of your business, allow you to track and trace products, shipments, orders, etc., and share massive amounts of information across an entire global trade network. You need the cloud!

Cloud Computing vs. Software as a Service (SaaS)

Often people interchange the term cloud computing with SaaS, however these terms mean different things. If you use a SaaS-based application, you don’t have to worry about building an infrastructure for the software. Instead, the software is available via a web browser and the hosting company in exchange for your subscription fee, handles all the heavy lifting on the back end.

Cloud computing is a broad term that refers to building and running applications on the Internet. The Cloud delivers computing as a utility, SaaS delivers an application (such as CRM) as a utility. The true power of cloud computing lies in the way it changes the economics of computing, that is that it creates a marketplace with service providers and consumers.

Utilizing a cloud-based service has an extremely rapid deployment time because it requires no hardware purchases and no on-premises software deployments. Core integration capabilities (e.g., data and message transformation, flow management, routing, data aggregation, data quality, security, community management) and the governance features are performed in the provider's cloud data center. IT operations, monitoring, management, maintenance and upgrade of the platform are performed by the cloud provider, so the user organization must take care of only the monitoring, management and maintenance of its own integration flows, but not of the underlying platform.

Bottomline, a SaaS application is provided as a scalable service over the Internet and users do not need to have knowledge of, expertise in, or control over the technology infrastructure that supports them.

Legacy Apps vs. The Cloud

There are many supply chain software solutions available today - either legacy applications or Saas-based solutions. Enterprise legacy applications are difficult to maintain and keep pace with business demand, typically requiring custom programming to make them do what you want and need to run your business. The older the system, the more susceptible it is to disruption when modified. Poor documentation from a slew of previous systems managers and a lack of disciplined software development methods can result in unstable source code, which when modified can unexpectedly disrupt the entire system.

Studies show that solutions built with modern SaaS technology and interoperable modules can be quickly modified for less than 20% of the cost to modify a legacy application. SaaS applications are architected to be highly configurable and easily self-serviced, mitigating the need for system administration and maintenance. Users can facilitate on-demand changes in customer business rules, readily introduce new transport event messages with trading partners, enable rich reporting and data visualization, and other important capabilities that constrain legacy systems.

Value of SaaS in the Supply Chain

Commercially available, SaaS-based applications such as drayage dispatch, transportation management, and equipment maintenance and repair exist on the market today. For example, automated dispatch management systems link ocean carriers and third party logistics providers (3PLs), providing critical pick-up and delivery information that reduces transportation spend by shifting business to the most efficient vendors, increases equipment utilization by combining moves, and automates time-consuming manual tasks. Costly billing errors are eliminated, processes are streamlined, and all parties involved have access to key information to make more informed decisions.

Direct connectivity with trading partners enables shipment track and trace, streamlines routine transactional workflow, and optimizes the flow of equipment to maximize asset utilization.

Connect with a large network of equipment maintenance and repair providers on the web to manage container equipment and chassis repair estimates and service requests. Achieve real-time equipment visibility to track equipment as it moves through the supply chain.

In place of a manually driven supply chain, use SaaS solutions to transform your supply chain into an automated, dynamic demand-supply network, offering visibility, control, and collaboration across all trading partners.

Final Words

In today’s fast-paced, highly competitive global environment, companies need supply chains that are agile, savvy, and adaptive. Customers, suppliers, and trading partners are demanding, want information now, and require the right products arrive at the right location at the right time. This can best be accomplished in the cloud environment.

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