Special Technology Report Supply Chain Management
In Turner’s view the ‘Cloud’ doesn’t offer all that much above a responsibly hosted service. “But it certainly appears to be a more effective sales term than SaaS,” he added. “We are seeing customers trusting the reliability of their Internet connections more than previously, and therefore choosing Cloud-based systems rather than local hosting – and why wouldn’t you? These solutions are so much quicker to
Razat Gaurav, senior vice president EMEA
premise software – though we still the majority of projects then proceed along an on-premise route,” he said. “Though this will no doubt change, it is clear there is still some way to go. One of the main elements that will drive this adoption – and indeed inform cloud development overall – is to give users a seamless application experience, no matter where the applications are running. The other main driver will be the ability
implement. But the Cloud based systems are expected to perform almost as fast as local solutions so application and connection performance is key.” Campbell believes Cloud and SaaS are enabling lots of smaller players – who perhaps do not have as big an operation and which can be more variable and seasonable – to play competitively. This model, she says, can reduce their IT costs as they only pay for what they use. SaaS, states Campbell, offers smaller players the opportunity to engage and yet still get the best functionality and technical capability on the market at a price point they can afford. “There are no IT costs and all you need is an Internet connection,” she said. However, Campbell adds that larger corporations often do not benefit from SaaS style models. Nevertheless, she says, there is still a movement in some respects towards hosted solutions instead, where these companies own the software but do not have it on premise. “Those operating multiple plants globally are leaning towards hosted or data centres,” added Campbell.
For Bursa, SaaS/Cloud computing is just beginning to impact the supply chain market. “Where we see the greatest interest is in the area of transportation, which is easier to leverage and integrate with order management,” she explained. “Due to the sensitive nature of forward-looking plans, many companies do not want to place supply chain planning and inventory optimisation in the Cloud – yet.” Phillips maintains that the Cloud has definitely had an impact. “For quite some time now, the majority of the Request for Proposals (RFPs) want the option of off-
to offer choice to businesses, be it on- premise, off-premise or a hybrid. Everything must still work seamlessly together – and this is again a key area of integration development.”
Working together
Another topic that Gaurav considers as becoming increasingly important is the way each part of the supply chain works together – from supplier to end customer via manufacturer. “The days when the retailer knew what was happening at shelf-level but the manufacturer didn’t need to are long gone,” he said. “These days the supply chain is moving so fast, driven by constantly fluctuating demand that such a segmented supply chain will never work. Instead, businesses need a ‘shelf-connected supply chain’ where all parts of the chain have an understanding of what is happening at shelf-level – any surges in sales; dips in interest; or any product shortages.”
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supply chain software want to ensure that it is working to its maximum at all times and, as such, they require ongoing consultancy and support. Therefore, managed services are playing an increasingly crucial role as organisations look for the kind of expertise that will see them make the most out of their systems.”
In terms of what has driven these developments, Gaurav believes the demand for Cloud and managed services is a result of businesses’ need to cut costs in every way possible and ensure that any IT systems that are in place are being made the most of. “Moving to the Cloud enables businesses to cut the costs of hardware that is no longer needed,” he said. “There is also the increased flexibility the Cloud offers. Any need for increased capacity, or even the need for a completely new solution, can be fulfilled quickly and easily when delivered via the Cloud. It’s this scalability that allows for the reduced costs and improved operational efficiency – the two main goals for the majority of businesses.”
Markets are changing rapidly. This can be seen in the short product lifecycles of consumer electronics goods; the impact of downloadable files on the music industry; and the complex mix of retail channels now available. Consumers are becoming more sophisticated and retailers are being confronted with a whole set of new challenges – optimising inventory, order management and fulfilment across multiple channels.”
– Craig Sears-Black, Manhattan Associates.
A further development, according to Gaurav, is actually in the way supply chain companies work with customers. “It’s no longer enough to implement a great piece of software then walk away,” he said. “Organisations investing in
Gaurav adds that the need for a shelf- connected supply chain is largely a result of a change in the way customers are consuming products. “Take the retail industry for example -
consumers looking for the latest gadget are not going to wait,” he said. “They expect it on the shelf when and where they need it. The supply chain must work in tandem to deliver this. Social
media and the growth of online community in general has also had an impact and played a part in the need for a shelf-connected supply chain. If there is a certain item generating a lot of buzz, such as a new smartphone, then consumer demand can be sent soaring and within hours, retailers are sold out. At this
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MANUFACTURING &LOGISTICS
IT October 2011
www.logisticsit.com
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