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Industrial Application of Information Systems Cloud computing-(Answered)

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Industrial Application of Information Systems

 

Cloud computing applications in logistics and supply chain management

 


 

Done by : Mounir EL HANBALI ( 4561909)

 

Submitted to : Dr. Balan Sundarakani

 

Subject Name : TBS 933 ( Logistics Information Systems)

 


 

Table of Contents

 

SUMMARY

 


 

2

 


 

1.INTRODUCTION

 


 

3

 


 

2.BACKGROUND

 


 

4

 


 

3.USAGE OF CLOUD BASED SERVICE IN SUPPLY CHAIN

 


 

6

 


 

A.

 


 

6

 

6

 

6

 

7

 

7

 


 

B.

 

C.

 

D.

 

E.

 


 

PREDICATION AND PLANNING

 

SOURCE AND PROCUREMENT

 

MANAGEMENT OF INVENTORY

 

DEVELOPMENT OF THE PRODUCT

 

MANAGEMENT OF LOGISTICS

 


 

4.THE IMPACT ASSOCIATED WITH CLOUD BASED SERVICES

 

REFERENCES

 


 

8

 

10

 


 

Summary

 

The organizations around the world have adopted cloud-computing services for sourcing

 

their applications because the data or the information is available at anytime it does not need to

 

be stored in a local system. Hence, the senior executives of the company want to analysis the

 

methods of adopting a cloud computing service in the supply chain industry. The supply chain

 

management includes the transfer of goods or products from a supplier to a manufacturer and

 

finally to the consumers? .The process in supply chain management involves lots of information

 

sharing and needs a distributed system so adopting cloud-computing service will help to

 

maintain an efficient system.

 

The sharing of supply chain information needs a scalable distribution system rather than a

 

centralized one because by nature it is demand driven and it is globally increasing / decreasing.

 

With the cloud services the supply chain and logistic analysts are able to track every step in real

 

time, enabling them to make decisions and forecasts for capacity management and risk

 

management. Nowadays the Organization?s cloud platforms are more flexible and responsive

 

compared to the previous generations of supply chain and logistics tracking tools.

 


 

1. Introduction

 

In the highly competitive world the organizations have been thinking of ways to reduce cost and

 

increase their productivity in an effective way so most of them are relying on cloud computing

 

services. Cloud computing can provide on-demand computing services with high reliability,

 

scalability and availability in a distributed environment (Xun, 2012)[5].

 

In Supply chain management adoption of cloud computing is a great advantage since it allows a

 

huge and strong range of opportunities by reducing the initial expenses, increasing the visibility,

 

reducing the time between the initiation and the completion of production (Lead Time) , and

 

enhancing the inter firm collaboration and supply chain integration, and reducing response time

 

to customers (Shacklett, 2010; Schramm et al, 2011; Marston et al., 2011)[3]. Usage of Cloud

 

services for supply chain is rapidly booming in a recent research conducted by Garner Inc.

 

depicts that in the year 2013 there is 40 % increase in the usage of cloud service when compared

 

to the year 2011 (McCrea, 2013)[2].

 

The cloud computing service is still a new concept it does not provide answers as of how this

 

technology can help in reducing the risk involved and increase the products supply. Integration

 

and application of cloud supply chain solutions into an organization can be demanding and needs

 

strategic decisions (Truong, 2010)[4].

 

Cloud technology enables a collaborative model for the supply chain to enable all parties to

 

communicate and transact in real time since a transactions involves 5 to 15 different parties in

 

different countries and time zones. The organizations may only experience extra and unexpected

 

expenses on training an employee, setting up new regulations and adaptation process. The cloudbased solutions usually increase the reoccurring costs and reduce the start up cost. These Issues

 

affect the organization?s productivity within a supply chain. The improper function of a cloud

 

supply chain solution would have a strategic reflection on the entire supply chain productivity.

 

Cloud-based solutions can also create some new risks to the supply chain. For example

 

installing an application of an organization , and customer data on a remote server at a vendor

 

location can be worrisome and raise questions about security and privacy issues (Truong,

 

2010;Durowoju et al., 2011)[4]. Cloud-based systems are able to provide real time visibility of

 


 

inventory and shipments and improve logistics tracking. Consequently using common software

 

systems, they should own the necessary database for the whole year in order to respond to the

 

excessive demand just for a short period. In supply chain Organizations share important and

 

specific information about the products, payment, orders, customer?s profile, etc. Privacy, data

 

leakage, and legal issues are not permitted in the cloud systems and applications. Supply chain

 

executives have the privilege of assessment and control of risks that are related to the use of

 

cloud computing in supply chain management. With the emergence of cloud technology,

 

companies are basing the adjustment of their capacity accordingly on the needs to their needs

 

and scaling their computations and forecasting by taking into consideration the fluctuation of

 

demand. These leads to two major questions:

 

1) How the productivity of cloud supply chain could be improved?

 

2) How the associated risks and limitations could be controlled?

 

Existing researches and literatures are mainly focusing on the benefits and advantages of cloud

 

computing so these problems have not been discussed. The users should have practical

 

guidelines after adopting cloud-based solutions to reduce the risk.

 


 

2. Background

 

The cloud supply chain represents a network of many interconnected organization. ?Lindner

 

et al. (2010)[1] defines a cloud supply chain as ?two or more parties linked by the provision of

 

cloud services, related information and funds?. The resources of cloud computing are centrally

 

managed centrally which allows the services and delivery information tracking. Too much of

 

load on datacenter may lead to congestion in network so various load balancing techniques are

 

required to be implemented. The Cloud for supply chain is managing financials and information

 

movement in both directions across the cloud supply chain. The components involved in cloud

 

computing are represented below

 


 

SAAS

 


 

PAAS

 


 

IAAS

 


 

Cloud Service

 

Supplier

 


 

Distributors

 


 

Manufactures

 


 

Wholesalers

 


 

Customers

 


 

Products

 

Financial

 


 

Information

 


 

The above figure represents cloud services like Software As A Service Platform As A Service

 

and Infrastructure As A Service, which offer cloud supply chain solutions, among these Service

 

as a Solution which is exponentially growing and many organizations are adopting this service.

 


 

Software as a Service are mainly virtual machines that are delivered through the medium of the

 

Internet instead of having the software itself. This type of cloud service is covering all the

 

functionalities like customer and Resource Management or enterprise resource, some of the

 

examples are the SaaS ERP, Google Office Productivity application, Sales force for Customer

 

Relationships Management system (CRM), the NetSuite, and HRMS Shacklett, M[3]. SaaS is

 

provided as a service and the end user does not own it. Reports indicate that 44% of the most

 

successful organizations in terms of ERP (enterprise resource planning) are generally considering

 

the deployment of SaaS ERP.

 


 

3. Usage of cloud based service in Supply chain

 

a. Predication and Planning

 

Cloud-based services help the organizations to unite the supply chain partners like the

 

customers, suppliers and distributors who play a major role in estimating the quantity of the

 

product or service that consumers purchase and help in improving the service levels of the

 

organizations. These clouds based platforms basically get the data or information from the

 

Internet and then perform basic operation like analytics and gives more exact demand forecast

 

for all supply chain partners. This helps the chain partners to be aware if there is any

 

unpredictable demand.

 


 

b. Source and Procurement

 

In an organization sourcing includes purchasing of products, receipt and checking of

 

incoming materials is of right quality as well as the purchase of goods or services from the

 

external source. Cloud applications use database, which contains multiple data from different

 

suppliers, which provide well-organized and different benefit for companies that handle

 

thousands of data or information. It also helps the organizations to select between supplier that

 

which of them are able to provide appropriate product or services as their requirement and within

 

time. Cloud based platforms also enable companies and suppliers to mutually develop contracts

 

and enhance contract management.

 


 

c. Management of inventory

 

In many organizations management of inventory is increased by the usage of bar coding

 

technologies and wireless services. The RFID (radio frequency identification system) is a process

 

by which a digital identity uses a set of protocol which helps to transfer information from a

 

device (RFID) to reader by radio frequency waves, this technology combines with the cloud

 

based centralized data management system to deliver the global identification and helps in the

 

tracking of any items or goods across the global supply chain management lifecycle

 


 

d. Development of the Product

 

The advancement in development of information technology, the Internet network

 

transmission technology is improving gradually, in terms of the security and safety of service,

 

compatibility and all the application are expanding gradually. The development of a product

 

includes the use of product design and development techniques across many departments of

 

same organization or between different organizations. All the process involved in development is

 

shared over a secure network between different organizations. These processes include the

 

specific information of the marketing firm, the result of the test and the design changes if any as

 

well as feedback from the customers.

 


 

e. Management of Logistics

 

The organizations involve the process of acquiring the material then storing of those goods

 

and then the transportation of goods process. The Logistics information management system

 

keeps track on the inventory information by using the cloud service and offers the following

 

benefits

 

Service provided by the cloud computing vendors

 

Without any human direct interactions with the provider of the service the consumers can use the

 

Internet access to communicate with the service providers by using the computing capabilities by

 

means of client?s platforms like mobile phones, notebooks or PCs.

 

Service provided to multiple clients

 

The organizations in order to fulfill the demands of many consumers use the cloud computing

 

service providers?, which helps by grouping the resources of multiple consumers. The service

 


 

provider allocates or reassigns the resources to consumers. Consumers on the other hand have no

 

knowledge about the location of resource, which is assigned to them by the providers.

 

Flexibility

 

In cloud computing it depends on the capacity of the providers to quickly add or release the

 

resources as soon as it matches the demands of the consumers.

 

Scalability

 

Scalability is the ability of the system to handle large number of data in an effective manner. A

 

flexible system adds or release more resources dynamically when the service of demand increase

 

or decreases .So the elasticity of a system serve as a dynamic part to scalability.

 


 

4. The impact associated with cloud based services

 

The Cloud computing system in association with the supply chain information uses a lot of

 

technology for implementing the standards, by creating a system, which remotely manages the

 

allocation and use of resources, the management of data or information and the platform

 

management technology. The cloud computing service has the ability to increase or decrease the

 

computing power according to the requirement of the users. Scalability makes sure that

 

computing services is available to the users at any point of time and this is a highly important

 

issue in supply chain management system. Because supply chain is distributed in nature and each

 

company wants to grow its supply and distribution of product or services, there should scale the

 

need for IT services of supply chain at a big level.

 

The cloud provides on demand services by which a supply chain user uses when it is

 

required. If the supply chain of any firm is distributed across the world then it requires a separate

 

infrastructure of cloud for each of its branches. Sharing of information between different supply

 

chain users must be valid and secure in a private cloud. The private cloud helps by storing the

 

information?s or data within an organization. So besides using a centralized Cloud data center, a

 

company should use data center that is disturbed under the private cloud. The greatest risk

 

companies have to face is security and privacy of data.

 


 

Cloud computing systems as software products cannot always ensure confidentiality and as a

 

result run increasing risk of being invaded by hacking systems Xun, X. (2012)[5]. One of the most

 

concerns is the system crash down in a situation where the service provider is not able to deliver

 

the company service on the specified time. Supply chain operations are critical for one

 

company?s financial welfare and as a result any delays due to cloud systems failure to perform

 

has normal can be proved fatal. At the same time, the issue of availability is also crucial (McCrea,

 

B. (2013))[2]. Users worry that they may not have always access to the cloud, for example due to

 


 

poor Internet connections around the world. Finally, companies have to consider about the

 

individual specification. Most of the times cloud computing offers standardized services that do

 

not fit exactly to their specific supply chain operations. For example, manufacturing, which

 

consists of special processes, is difficult to be boosted with cloud services. More specifically, the

 

fear is that lacking customization will lead to slow market response or even worse loss of

 

competitive advantage Shacklett, M. (2010)[3].

 


 

Conclusion:

 

Cloud computing is a revolutionary technology that will change the organizations

 

behavior in terms of doing business and linking with partners. Because of its abilities this new

 

technology is promising to have the same impact as the Internet. Because of its growth Cloud

 

computing and its solutions have been adopted and deployed by several organizations to

 

optimize their sourcing and Managerial methods. There are various types of architectures

 

available in cloud and these utilization needs to be explored fully. Forecasting of goods or

 

services on the cloud helps to reduce the manipulation of demand when moving away from the

 

real customer?s demand. Furthermore, cloud-based purchasing of goods or services enables

 

companies to manage different suppliers in one database. Finally, cloud systems can provide

 

tracking of goods in forward and reverse logistics in one closed-loop supply chain model.

 

Therefore, companies that are willing to improve their supply chain activities are recommended

 

to adopt cloud technology. Cloud providers should attempt to reduce the disadvantages in the

 

service either by strengthening the system?s protection or by offering individual specifications

 

options for their customers in order to motivate them to buy and apply the cloud services. One of

 

the major drawbacks that companies need to overcome when applying cloud technology is the

 

change over from the traditional working concepts and methods to new innovative modern

 

practices. In practice, cloud-based models have already been implemented by leading

 

international 3PL companies with great success so far, firstly at private and later on at public

 

cloud structure. The Quantitative models as well as analyses of cost involved in companies, have

 

already implemented cloud technology, could document more exactly the benefits of cost in

 

cloud when compared with the traditional enterprise resource planning systems. Finally, more

 

academic research can help to develop new advanced integrated cloud models for supply chain

 

management.

 


 

References

 

1) Lindner, M., Gal?n, F., Chapman, C., Clayman, S., Henriksson, D., & Elmroth, E. (2010). The

 

cloud supply chain: A framework for information, monitoring, accounting and billing. 2nd

 

International ICST Conference on Cloud Computing (CloudComp 2010).

 


 

2) McCrea, B. (2013). Analysts Report that Cloud-Based Adoption Increased 40 Percent this Year

 

for Supply Chain Software. Supply Chain 247, June 2013. Retrieved from

 

http://www.supplychain247.com/article/analysts_report_that_cloud_based_adoption_incr

 

eased_40_percent_this_year

 

3) Shacklett, M. (2010). Is supply chain management emerging from the clouds? The short answer is

 

'yes,' and now's the time to take a more serious look. World Trade, 23(4), 34-37.

 

4) Tsao, H. J., Parikh, S. ; Ghosh, A.S. ; Pal, R. ; Ranalkar, M. ; Tarapore, H. ; Venkatsubramanyan,

 

S. (2010). Streamlining grain supply chains of India: Cloud computing and distributed hubbing

 

for wholesale-retail logistics. 2010 IEEE International Conference on Service Operations and

 

Logistics and Informatics (SOLI), 252-257

 

5) Xun, X. (2012). From cloud computing to cloud manufacturing. Robotics and

 

ComputerIntegrated Manufacturing, 28(1), 75-86.

 


 

 

Paper#9209961 | Written in 27-Jul-2016

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