Cloudy with a chance of change for supply chains

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Trucks play an integral role in moving goods not only within the U.S. but in most other countries as well. Indeed, here in the U.S., trucks haul some 70% of all freight tonnage -- and that number isn’t projected to change much anytime soon.

That being said, though, trucks still yet remain one link the vast supply chains – both domestic and global – that deliver foodstuffs to the grocery store, clothes to the retailer, and raw materials to the factory. And control of those supply chains continues to be increasingly based on data – information collected at every step in the chain to make the process of transporting both raw materials and finished costs faster, more efficient, and less expensive.

Thus we come to what some are calling the next revolutionary “inflection point” within supply chain operations: cloud computing.

And it is through “the cloud” that trucking’s role within the supply chain – along with the functionality of the supply chain as a whole – will undergo major change.

That, at least, is the view of Darren Matthews, business development analyst for the Europe, Middle East and Africa (EMEA) region at software provider CargoWise.

“The ‘cloud’ will revolutionize supply chain technology as we know it, but will we have the creativity to let it develop to its full potential?” he noted in a white paper recently.

“I’m sure you’ll agree that there’s nothing as frustrating as getting to the end of a book and realizing there’s a page missing from the nail-biting conclusion,” Matthews (seen at right) added. “Supply chain visibility is exactly the same: your clients share a similar frustration when all they have is a fractured view of the order status of their goods.”

He pointed out that as the global marketplace has grown, so too has the complexity, and increased risks, to the supply chain itself. And to be the clear the cloud is not a “silver bullet” for mastering such challenges as it brings its own security concerns to the supply chain’s table, too.

Yet Matthews is convinced that the challenge for the transportation industry today is to manage and mitigate risk by creating more resilient supply chains with more readily available access to monitor all parts of the good-movements process – for if companies throughout the supply chain gain better visibility of every link in the chain, then their organizational performance improves.

“Although ‘visibility’ has become a popular buzzword in supply chain publications, its true potential has yet to be fully grasped,” he emphasizes. “While increasing the amount of data along all stages of the supply chain does indeed aid businesses, having it all in one place is the real ‘Holy Grail.’”

In Matthews’ opinion, it is this type of supply chain visibility that’s been the dream for more than 20 years, yet it remains elusive due in no small part to the technological limitations of trying to connect large numbers of distinct trading partners. However, that landscape has now changed significantly thanks to cloud technology.

“Sharing data in the cloud is now so commonplace it’s not something many of us give a second thought to,” he explains. “From checking our email to storing our music and our money, the cloud is already deeply integrated into our lives. Yet this capability has only recently begun to make its way into the fundamentals of supply chain management.”

Despite efforts to build platforms that would enable visibility, reliance on one-too-many data exchange remains a key struggle for countless businesses, he said.

“A shipper or manufacturer may need to connect to tens, if not hundreds, of trading partners, each using different platforms and technologies. In turn, these parties may need to communicate with their freight forwarder, transport provider, customs broker and warehouse,” Matthews noted.

“This is where the challenge lies: many trading partners are small businesses that lack the tools to be connected and if you can't connect with virtually all of your trading partners, then there are blind spots in your supply chain,” he added.

One of those “blind spots” remains the security of the cloud itself, though that seems to be a worry in decline among business executives.

Indeed, a recent survey by SafeNet Labs, a technology division of SafeNet, Inc., asked hundreds of business professionals worldwide if they were worried about the security of the cloud-based applications or data stored in the cloud.

While 52% checked "Yes" some 64% of respondents said they still frequently use cloud-based apps to store their personal and professional data. Ironically, when asked what keeps them up at night regarding their data and information, more than half answered, "Nothing keeps me up; I sleep like a baby."

"What this survey suggests is that cloud app usage and document storage continue to proliferate, and that organizations should reexamine antiquated attitudes towards usage of these apps across the enterprise," said Tsion Gonen, chief strategy officer at SafeNet, which designs encryption programs. "It's clear that top-level executives understand the advantages of cloud app usage, and should enable their companies to leverage these advantages by adopting contemporary security tools and practices."

Location also factors into respondents' attitudes about data security in the cloud, Gonen added. For example, the usage of cloud-based apps is far greater in EMEA than in the U.S. or Asia-Pacific (APAC) region; so too are the levels of concern about data security and corporate policies against using cloud apps. However, EMEA respondents are more likely to ignore those very same policies, Gonen stressed.

Who they are concerned about also varies as when it comes to their data privacy, respondents in the U.S. and EMEA are most concerned with the government, while APAC is most concerned with Google. Additionally, APAC respondents are the group most kept up at night when it comes to their data and information, worrying that it will be maliciously exploited, Gonen added.

There’s also another survey, this one by cloud storage provider TwinStrata Inc. that finds cloud storage systems can actually be a boon to companies from a disaster-recovery perspective – and one thing supply chain managers must be good at is disaster recovery.

The firm’s 2013 Cloud Storage and Disaster Recovery survey, conducted between May and August this year2013, polled 288 information technology (IT) personnel and made some interesting findings:

  • Some 60% of all users claim to recover applications and data in just 24 hours after a site disaster, while an additional 19% estimated it would take less than three days. The remaining 20% (one in five) estimated it would take more than three days to recover both data and applications.
  • Nearly half (48%) of organizations that rely solely on cloud storage for backup and disaster recovery (DR) indicated they can recover both data and applications in just "a couple hours." Only 30% of organizations that do not use cloud storage for DR at all claim the same recovery speed.
  • Similarly, 47% of organizations that do not use any cloud storage for disaster recovery actually spent more than $100,000 annually on DR services – compared to only 27% of organizations that rely solely on cloud storage for DR.
  • While one in three organizations continued to rely on onsite backups or offsite tapes as their only backup/DR strategy, almost two-thirds (63%) of respondents use or plan to use cloud storage for backup/DR.

Interesting findings, no doubt, but how do they apply to the supply chain – and more importantly, how do they impact trucking?

Well CargoWise’s Matthews thinks a central hub, system, platform or database is the most straightforward solution – one capable of retaining and exchanging data while offering a portal for all trading parties to monitor and maintain their supply chain: standard connectors, simple status updates and global visibility from one place.

“With a reliable and foreseeable supply chain, you can trust in your performance—and when you do that, you remove excess processes, saving time and money,” he pointed out. “This capability is still in its infancy but more and more tools are being developed to improve supply chain performance and to noticeably drive real and meaningful value across the enterprise.”

Will that “real and meaningful value” grace the trucking portion of the supply chain? We’ll soon be finding out.

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