Supply Chain Integration and Management †MyAssignmenthelp.com

Question: Discuss about the Supply Chain Integration and Management. Answer: Introduction Cloud computing becomes a key part of the SCM world, which is an global community of senior professionals of the field of supply chain from around 150 companies including o PG, Nestle, Lenovo, Land Rover and among others (Columbus, 2014). In US, more than 50% businesses used cloud computing to manage the functions effectively. It also indicates the popularity of this technology in the field of business management (Cohen, 2016). In the report of PwC, it is stated that in the contemporary enterprise technology, cloud computing is the most growing trend. The businesses expenditure in the global cloud computing market is likely to increase from $40.7 to $241 billion by 2020 (PwC, 2011). The topic of the report is cloud computing applications in logistics and supply chain management. In this report, the question of analyzing the effectiveness in terms of improving the performance of logistics and supply chain network shall be answered. The key argument of this thesis will be the positive contribution of cloud computing in enhancing the performance of supply chain and logistics. In this report, the contribution of cloud computing in facilitating better management of supply chain and logistics would be analyzed. In this report, benefits and cloud computing benefits as well as potential drawbacks is included in terms of SCM and logistics to provide suggestions of business for ensuring its effective use. In this way, this report is mainly indented to analyze the application of cloud computing the field of supply chain management and logistics. Cloud computing can be defined as a computing paradigm where the boundaries of computing will be determined by rationale rather than technical. It is also stated a model that facilitates convenient and on-demand access over the shared pool of configured computing resources (Senarathna et al., 2015). This model enables service providers to use remote servers on internet network to manage the process of data collection to its use and transfer. The computing services are delivered over the internet through cloud computing. Cloud computing is generally referred as the cloud in which on-demand computing resources are delivered over the internet by charging a fee. It is based on the concept of shared resources (IBM, 2016). Yu et al. (2010) also stated cloud computing as emerging computing paradigm through which computing infrastructure is offered as services on the internet. Cloud computing architecture is displayed in the below figure: Logistics and supply chain management (SCM) Logistics is an integral element of SCM, which mainly concerned with the movement of goods from one location to the other of a single organization. SCM is mainly concerned with management of logistics as well as the related supporting activities such as marketing, product development and customer service. The logistics management in SCM mainly intends to deliver right product to the right customers in the accurate state at the right time, place and cost. An effective management of logistics and supply chain networks becomes a key source of creating competitive advantage due to its contribution in increasing collaboration and harmony within the business operations. The theory of resource-based view (RBV) indicates that firms with having capability to combine resource in an innovative way are likely to achieve the competitive advantage. An effective collaboration of supply chain allows firms to use knowledge effectively for improving competitiveness and performance (Cao and Zhang, 2011). In the words of Esper et al. (2010), an effective management of logistics improves communication and transparency among the different department of organizations such as marketing, production, distribution and transport. This integration allows firms to manage knowledge and to create additional value for the customer. It helps firms to integrate supply and demand, which contributes in improving operational efficiency and reducing cost. Sandberg and Abrahamsson (2011) support the view of Esper et al. (2010) and stated that logistics capabilities of a firm can be a great source of sustainable competitive advantage in case of its better management. An effective and efficient collaboration among logistics operations can be useful for a firm to create sustainable competitive advantage. Dustin and Clas Ohlson are two case companies which have developed sustainable competitive advantage by managing the logistic operations effectively. An effective logistics and supply chain management allows a firm to involve and engage suppliers and customers both in the operations, which facilitates greater transparency and collaboration. It brings efficiency and effectiveness in the operations and enables firms to create additional value for the customer. By improving quality and reducing cost with the help of operational efficiency, the firm is likely to increase customer relations and satisfaction, which are the key factors of achieving sustainable competitive advantage (Feng et al., 2010). The management of logistics and supply chain is identified as way of creating value for the customers and competitive advantage on the basis of reviewed literature. Critical Analysis of Impact of Cloud Computing On the Logistics and Supply Chain Management (SCM) In accordance to Jun and Wei (2011), the application of cloud computing enables better management of supply chain by facilitating a way to collaborate information easily with greater feasibility. This technology facilitates information collaboration in the supply chain in the different levels such as interface, data, control and program. This collaboration of information brings flexibility and more responsiveness in the supply chain. On the basis of cloud computing technology, supply chain information is managed, transferred and collaborated effectively to facilitate quick and easy access over the information. But at the same time, collaboration of supply chain information within the environment of cloud computing have potential to create problems of security, integrity and confidentiality. Tiwari and Jain (2013) also support the view of Jun and Wei (2011) and state that cloud computing technology has considerable impact on the logistics and supply chain management. There are two types of cloud infrastructure used by the firm such as distributed and centralized. By using standardize, virtualized, data management and platform management technologies, cloud computing enables faster and flexible collaboration of supply chain information. It also ensures scalability which means availability of computing services on-demand basis On-demand services, resource pooling, flexibility and scalability are four benefits of using logistics management based on the cloud computing. It ensures quick and easy track on the inventory information and to manage the logistics effectively. According to Ferguson and Hadar (2011), cloud computing is an emerging technology that provides firm a way to optimize supply chain by facilitating cost reduction and process improvement. It helps to bring agility in the supply chain, which is likely to reduce chances of defaults. It contributes in creating value in the operations, which in turn leads to the development of customer satisfaction. On the other hand, Lindner et al. (2010) state that supply chain based on the cloud computing technology means to link two or more suppliers through provision of cloud services. The key advantage this supply chain is to enable firm to respond on the changing customers much faster and in less cost. Cloud supply chain is completely different from the traditional concept of supply chain in terms of efficiency and responsiveness. In accordance to the Marks and Lozano (2010), managing supply chain and logistics under the cloud computing environment enables a firm to manage vast volume of data on real time basis which are obtained from the different national and international supply chain partners including warehouse mangers, purchasers, suppliers, manufacturers, distributors and end users. The supply chain information is stored, managed and transferred virtually worldwide. This facilitated real time and directive reporting of inventory, WIP, raw materials and finished goods, which allows firm to make more informed business decisions and to reduce potential cost. Chen et al. (2014) depict that cloud based logistic management is quite flexible and agile that benefits business in terms of making informed decisions related to the procurement, manufacturing, distribution, sales and marketing. It enables a business to collect orders globally despite of considering their means of making orders including physical stores, online store or mobile application. The cloud based database provides real-time information to the supply chain partners, which facilities more collaboration and value creations in the operations. Cloud computing based logistic management is more helpful for firm to develop more value for businesss stakeholders. In the words of Yan et al. (2014), logistic and supply chain management becomes a key source of sustainable competitive advantage due to its contribution in increasing collaboration and transparency in the supply chain networks, which is likely to contribute in the optimization of cost and operational efficiency. This provides computing technologies for the supply chain networks over the internet. A firm obtains financial and operational benefits by using cloud based technology in the management of supply chain. Truong (2014) supports the view of Yan et al. (2014) and stated that cloud computing has potential to deliver powerful range of capabilities in the management of supply chain. Reduction in start-up cost, increasing supply chain visibility, enhancing collaboration within the firm, better integration of supply chain partners, diminish lead time and increasing responsiveness of supply chain are the major contribution of cloud based supply chain management. These are likely to in fluence the ability of an organization to use supply chain and logistics as a means of decreasing business cost and improving quality. This allows firm to satisfy customers and to maintain good relations with them that helps a business to survive in this highly uncertain, complex and competitive business scenario. Aivazidou et al. (2012) depict that cloud computing contributes in improving the functions such as forecasting and planning, sourcing, logistics and service delivery. By using cloud based technology for supply chain management, a firm ensures access of supply chain partners over the supply chain information including order, procurement, stocks and sales on real-time basis. This allows each department of a firm to make informed decision and to bring efficiency in the operations. For example: an inventory manager can keep strict watch over the demanded and supplied quantity as well as the stock levels. Through this, production department can plan production schedule accordingly to risk of excess and shortage stocks. Flexibility, scalability, cost reduction, transparency and simplification are some key attributes delivered by cloud based supply chain. In the study of Al-jawazneh (2016), the benefits and prospects of cloud computing in terms of supply chain of business organization is investigated. It is concluded that cloud computing technology is more beneficial for those organizations, which work in the complex environment from those work in stable environment. Cloud computing impact on the supply chain greatly depends on the work environment and on the way it implements. The proper implementation of cloud computing technology offers benefits in terms of improving agility, speed, cost and quality of supply chain due to its contribution in improving integration and collaboration among the supply chain partners and facilitating information sharing on real-time basis. It makes positive impact on the operational and financial performance of firm. According to Gupta et al. (2013), information sharing and collaboration is a key advantage of adopting cloud computing, which in turn improves the functionality of supply chain from the perspective of cost and quality. It allows a business to share information of a company with the different supply chain partners easily on real-time basis. This improves interaction among the partners of supply chain, which facilities greater flexibility in logistics. Logistics and supply chain management can be improved by adopting cloud computing technology properly. Gai et al. (2014) depict that the role of cloud computing technology in terms of improving supply chain management as it eases documentation and access over the information without requiring high processing power. All computing work is handled by the cloud and thus it benefits the user in terms of simplifying the management of supply chain and logistics of a firm. The documenting process becomes highly simplify and integrated due to the application of cloud based technology. It improves the ability of firm to make good use of information for ensuring informed improvements in the business processes. According to Yan et al. (2014), the key benefit of cloud computing in the real-world organization is mainly related to the knowledge management. Through this technology, the management of information throughout the supply chain and logistics becomes less complex and highly visible. This enables firms to manage the supply chain activities effectively and to create additional value for the c ustomer by offering cost efficient and quality product. Potential limitation or Challenges in adopting Cloud Computing for logistics and SCM In the words of Pearson and Benameur (2010), privacy, security and trust issues in the field of IT have increased due to the implementation of cloud technology. The failure of an organization to secure information causes privacy, trust and regulatory issues, which influences the business in an adverse manner. The use of this technology for managing supply chain and logistics creates potential of developing privacy issue. For example: on cloud bases SCM, the information of customers is shared vie internet that could be hacked by the third person. Due to this, firm may lose trust of customers and consequently sales. Similarly, Durowoju et al. (2011) state that security and scalability are the two major concerns, which have potential to influence the management of supply chain and logistics in adverse manner. The cloud technology creates an environment of information sharing in which access and quality of information as well as accessibility to information can be compromised. Security breaches have potential to disturb the supply chain and logistics management at the greater extent, which influences operational and financial performance of a firm negatively. Scalability means to adjust the computing resources based on the demand, which is quite complex and time-consuming task. It also creates major cost for the firm and affects its ability to realize benefits from cloud based SCM and logistics management. Gupta et al. (2013) opposed the view of Pearson and Benameur (2010) and Durowoju et al. (2011) and stated that security and privacy are the two key factors that lead to the adoption of cloud computing in the small and medium sized enterprises. On the cloud, there are great measures are taken to secure and protect the data such as selective asses to users, strong passwords and other monitoring activities. The cloud is more secure to store, access and transfer the information more conveniently on real-time basis and to attain significant benefit from this. Xu (2012) opposes above views by stating security as a key challenge in the implementation of cloud computing for managing supply chain. The data on the cloud are managed by external parties on the remote server, which causes risk of privacy and security issues. In the supply chain, corporate generally communicates information of consumers, employees, know-how, and businesss strategy and among others. An organization failure in securing business information cause legal and reputation risk, which could have adverse impact on the financial performance of a company. In the words of Lindner et al. (2010), cloud computing offers range of benefits to the organizations in terms of improving the functionality of supply chain and logistics. But, the absence of well-defined structure of cloud based supply chain and related information model creates challenges in the adoption of this technology. Due to this, organizations face difficulties in implementing this technology to improve management of supply chain and logistics and to realize related benefits. Truong (2014) support the view of Lindner et al. (2010) and stated that cloud based supply chain is an emerging technology and thus the standardize architecture of implementing and using this within the organizations is developing. Due to the developing stage, firm faces challenges to access and control associated risk, which may influence the ability to achieve sustainable competitive advantage. The organizations face considerable challenges in using this technology to manage supply chain and logistics . According to Ferguson and Hadar (2011), optimization of supply chain through cloud technology is account to correlate and integrate the events with high monitoring and business activity management system. Due to the security concerns, it requires implementation of higher level of monitoring system, which causes complexity in the system and makes it time-consuming task for a business. Recommendation In the words of Lindner et al. (2010), risk assessment model can be an effective tool for using cloud based supply chain efficiently and effectively. The application of this model is likely to enable the users to identify, prioritize and calculate their severity in accordance to their own business conditions. This could be useful for them to access the potential uncertain event and to develop informed strategies to mitigate them. It could help user to minimize the risk and maximize the benefits from the implemented could technology in terms of improving management of supply chain and logistics. According to Jadeja and Modi (2012), private and public cloud both influence the usage of this technology in the management of supply chain and logistics. If a firm uses public cloud then it is most cost efficient option in compared to the private cloud but less secure and private. Due to this, hybrid cloud, which is a combination of both private and public clouds, can be used by the organizations for bringing cost effectiveness and ensuring security. Zhou et al. (2013) stated that private cloud provides more secure way to control data and applications, without hindering access of parties over the internet. For security purpose, private cloud can be adopted for a business. This may help firm to use this technology for improving supply chain and logistics management. Conclusion It can be concluded on the basis of above discussion that proper implementation of cloud computing technology for managing functions of supply chain and logistics can be effective to offer range of sources of sustainable competitive advantage. However, the use of this technology for the purpose of managing supply chain brings several challmages such as data security, privacy and confidentially, which have potential to affect the competitive position of a firm. 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