Cloud will change supply chain… The question is when?

For many years, supply chain was a space that drove lots of attention. One of the major trends, I can see for the last decade of manufacturing transformation is an increased granularity and optimization among the value chain. Design supply, manufacturing supply chain optimization and many other things in this space are raising many questions and interest of software vendors and customers. Earlier this year, the following article caught my attention – Apple Turns Over Its Entire Inventory Every 5 Days. I think, the number is impressive. Here is a very interesting passage:

Gartner’s Supply Chain Top 25 table rates companies on their return on assets, their inventory turn metric, revenue growth, and votes by analysts and peers. Overall, Apple sits right at the top of the table, with a composite score 40% higher than Amazon, which sits in second place.McDonald’s is the only company in the world that turns over its inventory faster than Apple, and let’s face it, that’s largely because most of its stock doesn’t last five days. But its quite incredible when you consider how many countries Apple serves, and how many products it offers, that it doesn’t stockpile certain goods.

So, the question I want to ask today is what will bring a big change in supply chain space? I was reading blog article written by Allan Behrens’ of Taxal – On the topic of Cloud… “where to now the channel”? Have a read and make your opinion. No surprise to me, Allan sees a cloud as a main disrupter in a supply chain. Here is a quote:

I for one believe that the Cloud era heralds significant change in the IT industry… and in the dynamics of its supply chain. The question is not ‘if’, but ‘how much’ and ‘when’. Discussions with software and hardware companies reflect widely varying sentiments on what and how to deliver; moreover fear (of reducing margins), uncertainty (of product and supplier intentions) and doubt (of customer take-up) are amongst the issues that constrain many partners’ deeper involvement in Cloud opportunities.

What is my conclusion? I certainly agree with Allan about how he positioned his question about supply chain. The question is not “if”, but “when” the cloud will disrupt supply chain. At the same time, in order to disrupt the supply chain with the cloud solutions, we need to pass a long way alongside of development of cloud information infrastructure and technology. Security and information sharing needs to be improved. However, the most important transformation is about people’s mind. Sharing information culture is still in a very early stage. Yes, we can share photos via Facebook. A decade ago, the modern way to share our private information online would be shocking. Some kind of similar transformation must happen in all aspects of business information sharing. We are still not there… yet. Just my thoughts.

Best, Oleg

Image: FreeDigitalPhotos.net