9. Application of Cloud Computing and Internet of Things to Improve Supply Chain Processes

Cloud computing eliminates the advantage, which large organizations have conventionally enjoyed in terms of the availability of technology specialists and technical superiority. Small and medium enterprises that take advantage of infrastructure providers to support their technology requirements and provide specialized platforms for development and testing can build an infrastructure that is innovative and is capable of enabling entry into a global marketplace with as much capability as the market demands. Smaller enterprises have the ability to leverage software services that provide software such as supply chain management, enterprise resource planning, customer relationship management, and business analytics which are traditionally available only to large enterprises and organizations. Being able to access infrastructures, platforms, and software services based on what is needed and paying for only what is used enable and empower start-up enterprises and small and medium enterprises, giving them an advantage in the market and also an equal position with much larger enterprises.

IoT can be viewed as networks of networks. There can be a wide range of applications in IoT that supports logistics and supply chain management. IoT technology can be leveraged to achieve cost reductions. IoT technology can be combined with real-time location systems to get live updates from the factory floor, enabling manufacturers to continuously monitor machine activity, maintenance needs, and also product movement during production. Cost reduction can be achieved across the digital supply chain by making use of these smart machines by providing data that allow manufacturers to adjust production on the fly. Manufacturing and assembly lines will receive updated schedules and quality-related information in real time and instantly. IoT data can be leveraged to schedule proactive, preventive, predictive repairs, maintenance, customize production to meet the customer’s orders, and the focus that is needed to be successful in the digital world. The concept of Industry 4.0 aims at achieving smart factory will soon be a reality. Smart products which consist of the embedded knowledge of their customers’ needs will provide data insights and analytics about the best way to achieve customer fulfillment. All this information will lead to more cost-efficient production and product development.

Digitally enabled real-time collaboration partners will need to collaborate across all nodes of the supply chain to profitably meet the customers’ demands. Select technology solutions so that the supply chain partners can work within and across various networks and at touch points. Supply chain management (SCM) manages to optimize processes and collaboration with other companies in the supply chain (suppliers and customers) to create more value. While SCM is already heavily supported by various IT solutions, the Internet of Things (IoT) can be of great value by providing additional information. One of the major challenges in SCM is reducing the bullwhip effect. A major cause of the bullwhip effect is information distortion. For a better information flow, the IoT is able to trigger all relevant actors in the supply chain upon the sale of a product. In traditional processes, information on demand was only passed to one’s direct downstream partner instead of sharing this information with the whole chain. IoT can enable sharing of information across the entire supply chain from the upstream suppliers to the downstream customers.