Recently, Supply Chain Brain (SCB) published, “A Forecast for the Cloud in Supply Chain and Logistics.” Tom Boike, VP of supplier management with UPS, offered his perspective regarding the impact of cloud technology on the supply chain and logistics industry.
We can all agree cloud technology is affecting today’s supply chain. Web-based supply chain software allows for real-time collaboration among supply partners, greatly trumping static MRP and ERP forecasts. Like Boike, my team and I at Ultriva often wonder why companies have yet to fully embrace the cloud. Boike maintains that many remain unconvinced that cloud-based software is secure and reliable. That cautionary hesitancy seems peculiar when so many people, supply chain professional included, think nothing of using the internet for online banking or rely on the phones to conduct business emails.
The SBC article states that “change” is the biggest barrier to adoption of supply chain cloud technology. A secondary concern is getting “all partners in the chain to participate.”
Change resistance is a powerful force even in large manufacturing corporations, even when faced with severe supply chain pains. Without evaluating the nuances of corporate culture, organizations get caught up in status quo thinking justifying such archaic practice fearing that any change to current business practices will cause a disruption, resulting in lost time and money. This fear-based approach is totally antithetical to lean best practices and counter-intuitive, since cloud-based software can be implemented quickly, without needing physical plant changes. Since Ultriva’s supply chain execution software easily integrates with existing ERP solutions, disruptions are minimized. Elements of Ultriva’s closed-loop system can be added gradually, lessening the reliance on MRP forecasts.
Secondly, getting outside suppliers to adopt cloud-based technologies. The very nature of Ultriva’s web-based software does not require that all suppliers buy new hardware or install any new programs. In fact, the IT department does not have to get involved. Suppliers simply need a computer with an internet connection. As they log into the Supplier Portal and acknowledge purchase orders or shipment of goods, all parties can see the data in real time via the web. Ultriva software also allows printing of shipping labels with standard existing printers (further optimizing supply chain processes without investing in hardware.) With these cloud-based solutions, improved buyer and supplier visibility is achieved, and processes can be automated. Managing the supply chain through email, spreadsheets, and faxes is thing of the past.
Boike stresses that organizations adopting cloud-based technologies realize substantial benefits. Many of today’s supply chains are global; almost all manufacturing companies are extending beyond the four walls of the factory. This added complexity to the supply chain is well-suited to cloud technology which provides “a higher level of connectivity and visibility” – essential qualities for complex global operations. Disciples of lean manufacturing and continuous process improvement practices use real-time data to further advance these best practice principles.
Cloud-based supply chain software main benefit is real time visibility; the result is a reduction in bloated inventory while ensuring inventories do not create a stock-out. Real time visibility with the ability to act on the data ensures companies are well on the way to using cloud-based technologies beneficially.
To read more, get our free whitepaper “The Case for Cloud-based Supply Chain Management Today.”