You hear a lot of concerns expressed these days about the security and privacy of cloud computing – and rightfully so. If, right now, all the important and sensitive data you need to make smart business decisions is under your control, securely stored in your internal IT system, only accessible by authorised personnel inside the four walls of your company, the notion of moving that data to the cloud should raise some questions around security and privacy.
But what if most of the data you need to make smart business decisions is not conveniently located in one central place and, even worse, is not even under your control? Enter the world of global supply chains.
The biggest challenge in managing a global supply chains, precisely because of its global nature, is not about handling what’s happening inside the boundaries of one single organisation but rather the intercompany processes that happen between a company and its widely dispersed network of supply chain partners.
You may have spent fortunes stitching together the complex web of partners, suppliers, service providers, carriers and banks that makes up your Global supply chain nervous system, only to find that eighty to ninety percent of the data you need to make smart supply chain decisions resides somewhere inside the proprietary systems of your vast network of supply chain partners. That means the data is therefore either not exclusively under your control, or not under your control at all.
That container you are expecting to arrive in Long Beach any moment now is stuck with Customs in Rotterdam. Your customs broker has that info. The temperature inside one of your shipments from Vietnam just went out of range. Your forwarder has that info.
What’s your ocean rate from Shanghai to Hamburg? Your carrier has that info. The purchase order you just faxed to one of you suppliers in Hong Kong was left on someone’s desk. Who knows who will get a hold of that info?!
In this scenario, which describes most complex global supply chains by the way, the biggest security and privacy challenge is not about giving up control of your data. It’s about controlling that data in the first place. Today, the only way to get full control of your supply chain data is through a cloud supply chain. How so?
Think of a cloud supply chain as an informational replica of the physical supply chain on the ground. A cloud supply chain reflects each of the actual objects and actors in the physical supply chain just once, in the cloud. So the information that was once fragmented and scattered across your supply chain and controlled by a multitude of parties is now centralized to create one single version of supply chain truth.
Let’s go back to that example of the PO that’s sitting on someone’s desk in Hong Kong. In a cloud supply chain, that PO resides in the cloud. Your supplier is authorized to automatically receive the PO data from the cloud to create corresponding shipments and trade documents and to automate the payment process with your trade bank – all from that single version of PO data. That’s one single version of supply chain truth, controlled by you.
And that truth isn’t static. It’s a living, ever-evolving thing. All objects, documents and organizations in your supply chain are constantly changing their status. Containers get loaded or they don’t; purchase orders get approved or declined; shipments are flagged or cleared; trucks arrive on time or get stuck; invoices get paid or they don’t.
In a cloud supply chain, all those status changes are instantly and automatically communicated to everyone who needs to know. More importantly, you decide who needs to know. Because now you are in charge and you are in control of your supply chain information.
Once you’re in control and have all the sensitive data in one place, only then can you start to apply all the necessary state-of-the-art security and privacy measures to it.
Building a cloud supply chain yourself from scratch is rarely feasible, however. It’s too expensive, too risky and the tolerance for error is close to zero. So it’s important to find a partner with a long track record of deploying secure cloud supply chains, often in easy, baby-step stages. With the right cloud provider, you can walk before you run, avoiding huge up-front investments or the need to buy expensive software licenses.
Look at what industry leaders are doing. Nestlé is starting to move to the cloud. Caterpillar is heading for the cloud. Sears is doing the same and DHL is already there. These companies and hundreds more are no longer tolerating a situation in which their sensitive supply chain data is floating around somewhere, accessible to anyone and no one. They all realised that only a cloud supply chain allows them to finally take control of their supply chain data. They did their due diligence and went with a cloud supply chain specialist they trust.