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Cloud Computing and Supply chain

Making Sense

Cloud computing presents a discernable alternative for the supply chain

paradigm that is already grappling for coming to terms with the ERP

implementation proliferation in the past couple of years.

Purported to be the panacea that can drive value systemically across supplychain, this cusp-of-transition from ERP to Cloud is more than a mere pass of 

baton from the singularly internal focus of ERP to a wholesome integration

across using distributed architecture/web. While contemporary ERP is still

relevant to organizations that have capital resources and can ill-afford

downtime, the whole of the chain simply does not possess the wherewithal to

operate on ERP. The Cloud, wherein the business model of providing leased

services for use of ERP (ERP-on-Demand), is therefore, a better operating

model which saves from protracted ERP implementation and the risksassociated.

Of the three successive layers of supply chain viz., operations, logistics and

strategy, cloud can particularly drive value to logistics and strategy. While

ERP has proved to be efficient in the management of internal supply chain, the

whole chain needs integration which can be driven through the hybrid model

presented in the figure below. The interfaces between them can berationalized with available solution adapters.

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Driving Value to Different Stakeholders 

Supply Chain

Operations y  Standardized modules

y  Better for SMEs to be on

cloud rather than go for a

full-fledged traditional ERP

implementation

y  Lower licensing

cost/Pay-as-you-

use model

Logistics y  Pare costs through

intelligent routing and

optimization

y  Better milk-runs, partial-

y  Greater co-

ordination with

smaller logistics

vendors

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loading etc.

Strategy y  Increased CPFR

y  Integrated POS data

y  Visibility across chain

y  Integrated-chain

y  Easier to pursue

smaller

participants inchain to move to

low cost on-

Demand ERP

Conclusion

Two words make a good business case: Profits and Risks

Profit 

Lower capital investment and implementation costs for ERP which erode the

bottom-line can be dealt away with. Also, as strategy, logistics and operations

pare costs, bottom-line is positively impacted.

Theres burgeoning SME base at the bottom of corporate pyramid. Cloud is a

very relevant and cost-effective solution offered to this segment. There surely

is fortune at the bottom of this pyramid for Cloud vendors.

Risk 

In summation, its about owning the right risks and divesting others that are

too big, protracted or irrelevant to companys vision and strategy. Cloud can

avoid the risk of huge capital investment and the ERP implementation

wrangle.