Cloud sourcing for a “people-centric” supply chain

Among the final points made in “IDC Manufacturing Insights’ Supply Chain Top 10 predictions 2012,” is that cloud applications for supply chain will move from a total-cost-of-ownership focus to a total-values-in-ownership focus.

“Cloud computing and mobility combine to create a level of collaborative connectivity that requires new ways of consuming IT capabilities and a more practical alignment between the clock speed of internal IT decision making and the cloci speed of technology,” said Simon Ellis, who currently leads the supply chain strategies practice area at IDC Manufacturing Insights.

Ellis, who collaborated with IDC analyst Kimberly Knicle on the study, told SCMR that manufacturing supply chain organizations will focus on fulfillment excellences as service performance grows in importance in consumer-centric marketplace.

“Volatile demand is the new norm,” he said. “Consumers are less brand loyal, and far more selective, than ever before – and frankly, are willing to leave their wallets at home if the value they require in a purchase is not apparent.”

Ellis added that peer reviews and recommendations are driving brand switching, and private label choices are becoming popular.

“All these conspire to drive forecast accuracy down and demand volatility up,” he said.

Supply chain organizations will get serious about new product development and introduction with the adoption of PLM tools and a focus on clear internal business process.

One form of Product Lifecycle Management is called “people-centric” PLM.

Ellis agreed that while traditional PLM tools have been deployed only on release or during the release phase, people-centric PLM targets the design phase.

“Technology catches up to the changing organization with four basic forces,” he said. “These are mobility, cloud, big data, and social business.”

As a consequence, said Ellis, manufacturers will allocate IT spend to support these forces, and “prioritization” will depend on alignment of IT productivity and business value.

“New opportunities exist in the overlapping applications of these new technologies,” said Ellis.

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