The Supply Chain in the Cloud

Many companies today are obviously interested in using enterprise technology that they can access via the cloud. The software-as-a-service (SaaS) delivery model avails companies, as is well known, of technology without a large fixed cost, and that is device independent, and accessible by more users, without continual upgrades to worry about. While there are the oft-mentioned concerns around security (which we will not get into here), and SaaS is not the right software delivery model for every client for every deployment, there is no denying that SaaS has much to offer in the right situation.

We have been talking with clients and others about the influence of the cloud in supply chain areas such as these:

  • Collaborative execution

  • Global trade logistics

  • Logistics

  • Sales & Operations Planning

  • Supply chain synchronization

  • Transportation management systems

  • Vendor managed inventory

  • Warehouse management systems

  • Demand planning

  • eProcurement and sourcing

In some areas, such as warehouse management, the cloud does not seem immediately intuitive, and, indeed, there are still questions being asked about how ready warehouse management is for the cloud. LogFire, for one, feels that it is time to bring the time-to-value proposition of SaaS to the warehouse management system (WMS) area. While still very few people will argue that cloud-based WMS solutions are as robust as the on-premise standard-bearers, LogFire and others are trying to pave the way.

Other areas, such as collaborative execution, as E2open calls it, is a natural area for a cloud-based solution, which would naturally explain why E2open has been doing this so well for so long. (A few months after going public, E2open announced that the E2open Business Network had surpassed 100,000 unique registered users, having grown 25 percent in the past year.)

Datalliance is a leading vendor of vendor managed inventory (VMI) solutions, delivered via the SaaS model. Datalliance recently reported, as testimony to the receptivity of the Internet-based model for VMI, that its 20 percent growth in the past year means that the vendor now manages more than 13,000 locations, and “17M+” stock-keeping units (SKUs).

In the Logistics area, it was recently reported that cloud-based vendor Trade Tech will be one of the first logistics technology vendors certified to be able to provide direct transmit and receive capability for shippers via the U.S. Customs and Border Protection’s (CBP’s) Automated Commercial Environment (ACE). This seems to us another sign of the lead that cloud-based technologies can take in the logistics industry.

Steelwedge is a very strong player in the sales & operations planning (S&OP) and integrated business planning (IBP) areas of supply chain. Steelwedge challenges us to think about “Why S&OP Belongs in the Cloud,” and, indeed, the collaborative nature of the S&OP process should mean that S&OP can derive considerable benefit from the “access anywhere” advantages of the cloud.

Transportation management systems (TMS) have been making use of SaaS for a while, and there have of late been reports of this evolving in some cases to the next stage of managed-service TMS under the right circumstances.

Demand planning is expected to be another area where the cloud will continue to make inroads, as is global trade management (GTM). The announced GT Nexus and TradeCard merger is based partly on the respective vendors’ commitment to the cloud.

There are numerous other supply chain areas as well with good stories to tell about the influence of the cloud. The few areas we have talked about here are, however, solid demonstration of the interesting advances being made by the cloud into supply chain. Here at Technology Evaluation Centers (TEC), we are talking to our clients about how the cloud will impact their software evaluations and decisions, and we certainly expect the cloud to be part of more and more conversations. We would enjoy talking with you about what the cloud means for your supply chain software.

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