Why Supply Chain Management Should be Integrated With Cloud Computing

Today our business environments are evolving at a never-before-seen pace. Rapid implementation of technology into all aspects of business is making service availability and product delivery faster than ever before. Growing competition is forcing enterprises to reduce prices of their products and services and they constantly look for ways to cut down operational expenses to compensate for the lowered price. Implementing technology is among the top methods that any modern enterprise uses to streamline their business process and control the cost. Many businesses have made technology investments to automate and streamline their supply chain operations. More precisely, we are talking about how cloud computing has made its way into the Supply Chain Management strategy of a contemporary manufacturing business. As with any other business sectors, cloud computing has offered opportunities to radically change how technology is deployed and utilized across the business as well as how information and data is created and exchanged within and outside the enterprise. Almost every major manufacturing company is following  some form of supply chain management practice. Components are sourced from different partners who may be geographically distributed across the planet. The final product coming out of the plant is thus a combination of efforts from the manufacturing company as well as its several suppliers. So what difference will cloud computing make in the SCM process for a business? For any manufacturing business, just having  an effective Intra-Organisational collaboration platform is not sufficient, they need to have an Inter-Organisational collaboration platform as well. Their business partners must be constantly available via a communication platform that eliminates all technical barriers and provides a convenient interface for exchange of information. Cloud computing provides can address this need very well. Let us take a look at how cloud computing makes Supply Chain Management more efficient. Common Communication platform: As mentioned before, suppliers or partners of a firm, for example an Automobile firm, could be located at different cities, states or countries across the world. To collaborate effectively, they should have uninterrupted communication with the parent firm to ensure smooth operations; but there is a big problem: Each supplier as well as the parent firm follows a different operational standard with their own set of tools and communication interfaces. This can result in communication gaps that can adversely affect their ability to collaborate with their partners. Cloud computing allows these companies to follow a common business standard or SCM protocol by providing a communication interface for the parent firm that is accessible in the same form by any supplier at any place and at any time. The Security Angle: Exchange of goods and services between companies and their suppliers always involve a great deal of financial commitments as well. Not only that, vital information that is exchanged between a partner and the parent- for example a supplier for components to a military armour manufacturing company - should never fall into the wrong hands. Cloud computing allows the communication interface to be secured with firewalls, intrusion alarms, data security encryption techniques and much more. It provides a secure gateway for the smooth flow of critical data. Software as a Service option: Cloud computing provides business enterprises to use a Software as a Service (SaaS) model wherein they do not have to physically install hardware or deploy any  software to help them manage their SCM models but they can use the service that is installed in the data centers of the cloud service provider. Monitoring and tracking your SCM strategies does involve a lot of utility tools and if you were to buy and install each one of them, then you need to have specialised personnel to handle their installation and operation as well. Reduced Costs: Having to maintain software developers, hosting infrastructure, data centers etc on their own poses considerable financial burden on enterprises and there will not be a proper IT budget strategy in the firm since IT is not in their core competency. Cloud computing makes everything virtual and eliminates the need for a vast majority of physical infrastructure and hence reduces costs significantly. No Need of Physical Presence: Since cloud computing brings the parent company and its suppliers into a single communication framework, it reduces the need for executives from the parent firm to visit the supplier location to assess and monitor their performance and quality standards. So cloud computing is beneficial in more ways than one for the Supply Chain Management strategy of any modern day manufacturing enterprise. It can streamline information delivery across various business channels by ensuring strict compliance with a common business language and eliminating fatal communication gaps.

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Our articles are written to provide you with tools and information to meet your IT and cloud solution needs. Join us on Facebook and Twitter.   About the Guest Author: Mandira Srivastava is a fulltime freelance writer who specializes in technology, health and fitness, politics, and financial writing. Equipped with degree of mass communication and having worked for both private and corporate clients, I have experience meeting a wide range of writing requirements and styles.