| When it comes to the latest developments in | | | | brings this capability - without capital expenditure and |
| software technology, logistics and transport | | | | with costs directly related to the level of business |
| managers are usually at the end of the queue. There | | | | you are conducting. |
| are many reasons for this - and a common one is | | | | Manufacturing processes do not benefit to the same |
| that manufacturing and ERP applications take | | | | extent as supply chain processes. The ability to share |
| precedent - and when those wishes were fulfilled, | | | | real time event information with partners, while being |
| there was relatively little budget left over for the | | | | critical in supply chains, is not usually essential in |
| logisticians who were looking to make operations | | | | manufacturing. Also, manufacturing processes are |
| more efficient | | | | often unique to product ranges, and frequently to |
| However, this is now changing. The current hot | | | | individual companies. |
| technology is Internet 'Cloud Computing'. Not only is | | | | Supply chain, and in particular logistics, processes are |
| this set to change the way we all use computer | | | | shared across many sectors and most product |
| technology, at work and at home, but supply chain | | | | ranges. They follow the same basic principles and |
| operations are amongst the earliest beneficiaries. | | | | goals and use similar resources. While there are |
| What is Cloud Computing and how is it revolutionising | | | | differences, they are not as radical as in |
| our business operations? And how new is it really? | | | | manufacturing. |
| The concept of the Cloud has its roots in the early | | | | So where has Cloud Computing or Software as a |
| days of the Internet as a business tool - and we | | | | Service (SaaS), been finding willing users? The first |
| sometimes forget that those days are not so long | | | | break through was with SalesForce, and the success |
| ago. | | | | was rapid when this sales and lead management |
| It was in the late 90s that IBM introduced the | | | | application was moved from the desktop to the |
| concept of e.business - bringing the Internet to | | | | Internet. Since then CRM, Human Resource |
| businesses and not just as a gaming and surfing tool | | | | Management and email services have rapidly |
| for young people. There was a time when | | | | emigrated from the desktop to the Cloud. |
| presentations, articles and learned papers on the | | | | What about supply chain applications? These are |
| subject of the Internet were not complete without a | | | | being developed rapidly and it is good to see that |
| diagram of a Cloud - representing the ether where | | | | British companies are amongst world leaders. A |
| information exchange took place. During my time with | | | | leading example of this is Feltham UK based Deltion, - |
| IBM EMEA's Global Services Management Consulting | | | | providers of CarrierNetOnline (CNO) Software as a |
| Group - dating back a decade - all of my | | | | Service. |
| presentations had at least one 'Cloud' appearance. | | | | CNO is a logistics and transport management system |
| Over the last decade the Internet cloud concept has | | | | - available only over the Internet. Users pay on a |
| seen several developments - and finally come full | | | | transaction basis and only for the features they |
| circle and returned as 'Cloud Computing'. In the interim | | | | need. Transaction costs grow as the business grows; |
| it has seen life as web enabled technology; web | | | | users who find that current market conditions mean |
| enabled applications; on-Demand computing; web | | | | less freight carried pay less until the business turns |
| services; and utility computing. | | | | round. |
| The concept has developed and with the introduction | | | | CNO users include industry giants such as UPS and |
| of Web 2.0 technology - and recently Web 3.0 - the | | | | TDG and a recent signings include a household name |
| improvements have been rapid, leading to Software | | | | food producer and one of the country's biggest |
| as a Service (SaaS) and finally Cloud Computing. | | | | suppliers to the building trade. Operators of smaller |
| What is in a name? In the case of Cloud Computing, | | | | fleets are also users - benefitting from low |
| quite a lot. All the other services found difficulty | | | | transaction related charges. |
| gaining traction. Non-IT managers simply did not | | | | Logixcentral is an Internet based solution from long |
| understand and IT managers were reluctant to | | | | established Birmingham UK company, DPS |
| promote a technology which might undermine their | | | | International. This is a Cloud Computing version of |
| role as custodians of technology. | | | | DPS's long established LogiX routing and scheduling |
| In fact there is no significant difference between | | | | solution. It has proved successful not only with |
| Cloud Computing and its predecessor (in name) | | | | logistics companies and in-house freight operators, |
| Software as a Service. The Cloud terminology | | | | but also with companies in the service sector running |
| appears to have been created by Microsoft - as a | | | | car and van based services. |
| marketing term which makes the concept easier to | | | | Another Cloud hosted Supply Chain success story is |
| understand (and helps people like me to recycle my | | | | Oxford, Uk based OmPrompt - OmPrompt was |
| old slides and diagrams!). The term has been | | | | founded to create 100% truly-connected trading |
| accepted by other industry giants including Oracle and | | | | communities, whatever the trading partners' technical |
| IBM and all of the major IT consultancies. | | | | capability, providing more efficient EDI solutions and |
| So what is different about the concept? Cloud | | | | automating the manual processes or message flows. |
| Computing moves computing from the desk top to | | | | OmPrompt distinguishes itself with its ability to rapidly |
| remote computers. Different computing devices such | | | | on board trading partners to trading communities. |
| as personal computers, personal digital assistants, | | | | So is the technology Cloud here to stay? Industry |
| handheld devices and cell phones connect to remote | | | | analysts Gartner believe so. In a survey published in |
| computers through wired or wireless connections. | | | | December 2008 they reported that nearly 90% of |
| Investment in licences, infrastructure maintenance | | | | organisations surveyed expect to maintain or grow |
| and upgrades lies with the application service | | | | their usage of SaaS. The firms cited |
| provider, not the user. The service is usually paid for | | | | cost-effectiveness along with ease and speed of |
| from the operations budget - because there is no | | | | deployment as primary reasons for SaaS adoption. |
| capital expenditure. This makes approval quicker and | | | | More than one-third of respondents indicated that |
| simpler. | | | | they had plans to move from on-premises to SaaS. |
| This simple explanation shows why the Cloud is so | | | | The key drivers included total cost of ownership, and |
| important for supply chain management; and also | | | | unmet performance expectations with on-premises |
| why it is seeing more development and acceptance in | | | | solutions, in addition to changes in sourcing strategy. |
| the supply chain than in manufacturing. It also explains | | | | What does the Cloud hold for supply chain |
| why budgets are not the overwhelming constraint | | | | applications? I believe that Cloud Computing offers |
| that they used to be - the service is often paid for | | | | managers throughout the supply chain an opportunity |
| from an operating budget, making approval quicker | | | | to catch up with the advances in technology which |
| and simpler. | | | | other parts of business have enjoyed for many |
| For supply chains to operate effectively and | | | | years: at lower cost; without capital expenditure; |
| efficiently, a real time exchange of knowledge and | | | | avoiding business disruption; and without significant |
| the ability to collaborate with external and internal | | | | consulting and implementation fees. We are entering |
| partners - suppliers, customers, logistics operators - | | | | a new age of supply chain and logistics technology - |
| to manage events in real time is essential. However, | | | | and this Cloud has a silver lining. |
| this has never been achievable until now. The Cloud | | | | |