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A Forecast for the Cloud in Supply Chain and Logistics

What has been the impact of cloud technology on the supply chain and logistics industry? Tom Boike, vice president of supplier management with UPS, offers a perspective.

A Forecast for the Cloud in Supply Chain and Logistics

Cloud technology is affecting the supply chain and logistics industry in a number of key ways, says Boike. From an operational standpoint, it’s giving birth to new processes for managing logistics and serving the end customer.

But companies have yet to fully embrace the cloud. “There’s still a fair amount of apprehension out there as to how and why it’s better,” says Boike. Many remain unconvinced that the cloud can deliver the same level of reliability and security as that of on-premise software.

The “pain of change” is the biggest barrier to adoption of cloud technology. In addition, companies are wrestling with vendor-compliance issues, including the difficulty of getting all partners in the chain to participate.

Still, says Boike, the benefits are substantial. Cloud technology can enable better networking throughout an organization, as well as across supply chains. It can provide a higher level of connectivity and visibility – essential qualities for complex global operations.

Transportation-management systems are among the applications to have migrated successfully to the cloud. Most carriers today view it as “sort of a cost-of-doing-business [consideration],” says Boike.

Adoption of the cloud for warehouse-management systems has been somewhat slower. One reason might be the location-based nature of WMS. But Boike argues that the cloud can be instrumental in linking together various distribution facilities. “Everything can be networked,” he says.

Security remains an “utmost concern” in software operations, Boike says, adding that UPS works hard to ensure that cloud-based applications include the tightest possible protocols for protecting data and systems. “In order to sell the cloud,” he says, “we present exactly how secure it is.”

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