SaaS Eases Supply Chain Pains

After decades of running their supply chains with internal enterprise resource planning (ERP) systems, enterprises have seen the shift to a global economy and supply chain — requiring a myriad of external business processes that their internal systems were never designed to handle.

Historically, ERP systems served as internal “drive chains,” linking together diverse enterprise functions such as finance, manufacturing, purchasing, customer service, marketing/sales, and engineering. These systems established their value because they could be closely tailored to the internal workflows of companies. Unfortunately, ERP systems were never intended for handling business processes that occurred outside of company walls.

This poses a dilemma for companies with global supply chains, since most employ suppliers and contractors around the world — and sell their goods in many countries. The need to track the sourcing of components, the builds of products, and the delivery of finished goods remains unchanged — only now these processes must occur outside of the company and in a global supply chain that ERP can't address.

Unsurprisingly, solving the need for these new supply chains that reach into every corner of the world has become a fertile area for SaaS solutions.

Key pain points of global supply chain management that SaaS is solving include:

Risk assessment
Cloud-based analytics services can now predict which areas of the world are most likely to experience a natural disaster. They do this by analyzing weather patterns and other factors. There are also cloud-based services that are able to risk-assess not only a company's top tier suppliers, but the suppliers of those suppliers.

When these supplier-oriented analytics are run, suppliers can also be run against the product structures of the items a company sells to determine which components are most critical to the production of a given item, and whether there is an inherent danger that exists because an essential component in product manufacture is only provided by a single vendor.

Uninterrupted visibility
In one case, a company undertaking a major project in a remote region with limited infrastructure was experiencing losses on shipments in-country, after the goods reached port. Thefts were occurring somewhere between the entry port facility and the company's final destination factory in the country's interior, and the parts were being sold on the black market.

If the parts had been coded, sensor enabled, and tracked in real- time in the supply chain with a SaaS solution the thefts would have been detected much earlier — and stopped. Saas helps give visibility into supply chain goods flows.

Guarantees on quality
Food and medicine that must be maintained at steady temperatures and humidity during transit are now packed in containers equipped with remote sensors that automatically trigger alarms over cloud-based networks whenever these networks fail, or a broken seal on a container is detected. The methodology ensures quality of goods, and can detect and prevent tampering with goods or the occurrence of a potential act of terrorism.

Read the rest of the story on EBN's sister site SaaS in the Enterprise.

2 comments on “SaaS Eases Supply Chain Pains

  1. Hailey Lynne McKeefry
    October 21, 2014

    Especially for small and mid-sized manufacturers, the SaaS platform offers a lot of benefits, including predictable costs and easy scalability most notably. I bet that adoption will be across organizations of all sizes. What do you think?

  2. Mary E. Shacklett
    October 22, 2014

    Some large enterprises are using SaaS when they acquire smaller companies.

    They get the smaller companies onto a cloud version of their internal ERP system so that at least the folks in the acquired company can quickly start learning and using a version of their in-house system.

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