Logistics in the Cloud:The future of supply chain management

Prof. Dr. J. Rod Franklin, P.E.Vice President, Product Development

Kuehne + Nagel Management AGAdjunct Professor of Logistics

The Kuehne Logistics University

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Agenda

• The Current State• Collaboration issues• Key requirements• How?

• Cloud Logistics• Cloud Computing – a quick overview• Logistics in the Cloud

• The FInest Project• FInest and Cloud Logistics• Project Motivation• The FInest Consortium• Core Modules• Envisioned Service• Supply Chain Management in the Cloud – An example

• Summary and Questions

Collaboration Issues

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Pressing problems

Limited visibility of T&L processes and critical events hampers business network efficiency and effectiveness

Closed logistic supply chains hinder agile inter-organizational information exchange and collaboration and access

Highly manual processes are employed to address a lack of standards, legal and governmental regulations, contract management and poor integration between partners

Key Requirements

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Efficient support for inter-organizational collaboration and contracting in cooperative business networks

Requirement 1

Requirement 2

Seamless integration of information and data along with real-world data acquisition

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But how?

Project Motivation• Existing ICT solutions insufficient to dynamically establish

collaborative T&L networks, leading to closed supply chains• Closed supply chains disadvantages SMEs in participating in large

collaborative T&L networks• Limited visibility on T&L processes and critical events, as well as lack

of global standards for information exchange hampers business network efficiency and effectiveness

• Project Aims• Build Collaboration & Integration Platform for international T&L

networks, by exploiting generic enablers of the Future Internet Core Platform

• Preparing for the demonstration and evaluation in large-scale trials with real-world use case scenarios

Domain-specific Capabilities for• Efficient inter-organizational collaboration in cooperative business

networks that operate in agile and dynamic environments and involve a multitude of stakeholders

• Seamless integration of information and data in heterogeneous IT landscapes along with embedded facilities for real-world data acquisition and integration

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Future Internet + Generic Enablers

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Cloud Logistics

• To understand what cloud logistics is you need to understand cloud based computing

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Cloud Logistics

• Cloud computing can be defined as follows:• An approach to computing that provides

computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services. Parallels to this concept can be drawn with the electricity grid, wherein end-users consume power without needing to understand the component devices or infrastructure required to provide the service.Source: Wikipedia

• The benefits of this approach are:• Scalability• Flexibility• Cost• Maintenance• Integration• Virtualization (device location

independence)

Infrastructure as a Service: hosted hardware and management services for the physical components needed to run applicationsPlatform as a Service: facilities for developing and deploying cloud based applicationsSoftware as a Service: cloud based business applications

Cloud Computing Explained

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Cloud Logistics

• Cloud logistics is simply the use of cloud based logistics applications and information management services to manage supply chains

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The FInest Project

• FInest is a cloud logistics project based on the use of Future Internet services

• FInest addresses current transport and logistics issues associated with:• Collaboration• Integration• Visibility• Planning• Contracting• Sense and respond (proactive event management)

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Consortium

11 partners, 6 countries, 2 SMEs, 1 public body

FInest Core Modules

Business Collaboration

eContracting

Proactive Event Monitoring

Transport (Re-)Planning

•Global view & coordination of logistics processes •Service-oriented inter-organizational collaboration manager, targeted to different T&L stakeholders

•Semi-automated e-contract selection and management•Creation of more dynamic marketplaces to seamless support e-contracting (e.g., spot contracting)

•Event-driven monitoring, across domains & modality, providing end-to-end visibility of logistic processes•Proactive event processing driven by contract management and transport planning & triggering transport re-planning

•Dynamic transport (re-)planning facilities, automatically exploiting real-world data

Web Mobile EmailFront-End

T&LCollaboration & Integration

Platform

FI PPP Core Platform

Proactive Event Monitoring

Business Collaboration

Transport (Re-)Planning

eContracting

Back-End

Legacy systems and 3rd party servicesSmart Items

SaaS Integration Layer

Envisioned Service

Domain-specific

capabilities

GenericEnablers

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Service-based Communication Layer

Illustrative Example

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Authorities NCLInvo

lved

St

akeh

olde

rs

Port of Ålesund T&F• Each CO represents a certain part of the log. process • Stakeholders can only access particular data

Real

-wor

ld

logi

stics

pro

cess BCM provides global view on overall process

BCMTPM

EPMFIne

st P

latfo

rm

transport plan

events to monitor

events

2 3

1 4

…2 3

1 4

…

internal representation

create

up-date

• Based on the real situation, the TPM plans the transport and creates a plan • BCM imports this plan and converts it to the internal representation, based on Collaboration Objects• Based on the plan, BCM registers events to monitor (e.g., ship arrival in Ålesund

• EPM events are used to update the internal model (e.g., ship arrived)• Stakeholders access this information to get up-to-date view on the logistics process• Encapsulation in Collaboration Objects ensures non-disclosure of confidential data

ECMcontract status

contract info.

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Summary and Questions

• Cloud computing offers significant advantages for “on demand” distributed collaboration

• Cloud based logistics provides a means to rapidly assemble and manage logistics services

• Collaboration “in the cloud” levels the playing field for customers, service providers and regulatory agencies The Future of Supply Chain Management is

in the Clouds

THANK YOU!

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