IHS Chemical Week

CHEM IDEAS

Three Ways Cloud Computing Can Improve Supply Chain Operations for the Chemical Industry

3:52 PM MST | February 2, 2012 | By GREG KEFER

Traditional business software systems were designed to do, essentially, one thing: automate the processes within a single enterprise. They weren't designed to automate the processes that occur between companies working together as global trading and service communities. However, supply chain, especially within the chemical industry, is defined by its focus on inter-company collaboration across networks that span the globe. To enable the massive levels of information sharing and process automation that these networks require, an entirely new technology approach is needed - one that harnesses the power of the Internet to connect and communicate across company boundaries quickly, and one that can model complex business relationships and commerce rules among chemical companies and their varied worldwide vendors. This is where cloud technology solutions come into the picture.

Case in point: LyondellBasell, one of the world’s largest plastics, chemical, and refining companies, is utilizing a cloud based supply chain solution. The company manufactures products at 58 sites in 18 countries and sells products to customers in more than 100 countries. This means that their supply chain involves multiple different, independent organizations that each need to see specific information elements related to product that’s being moved by a third party. LyondellBasell realized this need, and saw that a cloud supply chain platform would provide the visibility and control their constituents required. Since the implementation, they have been able to take on deeper control of international logistics operations and cast a wider net to bring a wider mix of partners into the tender process. 

Cloud has huge implications for supply chain management. It has the power to give companies supply chain collaboration on a global scale — at a fraction of the cost and risk of traditional software deployments. Below, we’ve outlined three specific ways that cloud can improve chemical supply chain operations. 

Visibility

Globalization, fragmentation and partner expansion are each just a part of today’s expanding chemical supply chain environment. However, the real challenge is maintaining both predictable and flexible within this environment. Chemical companies should focus on visibility as the foundation to achieving both supply chain reliability and agility when expansion and changes occur. A cloud solution will help solve this need, providing a single source of truth visible to all partners. Additionally, a proven cloud solution will dynamically update the expected delivery dates in real-time, driving predictability in your supply chain and providing full visibility to where a product is at any given time.  These consistent updates will help you identify and eliminate delays before they become problems, improving upon customer service and increasing customer loyalty through reliable inventory status and managing expectations. Working in the cloud allows for effective collaboration ensuring consistent and accurate data.

Security and Standardization

Smart businesses know that you cannot talk cloud unless you also talk security. While cloud provides the ultimate in supply chain visibility, there still needs to some sort of security control built into the platform. These security controls will create and administer the complex and highly dynamic business relationships, permissions and roles of multiple organizations working together in the chemical supply chain. Additionally, an effective supply chain platform will provide a global data grid to connect the systems of thousands of partners and providers, and to standardize the data from the systems of those partners.  Without a data strategy — and without standardized data transformed into useful supply chain information — no software application can deliver results.

Community

No technology platform, even cloud, is by itself enough to deliver breakthrough results.  A platform needs a community, and cloud provides the ideal platform for the chemical supply chain. Community gives the platform ultimate value. Look what Facebook did for sharing information with friends: a new vacation picture posted once and every friend instantly sees it. Now imagine that same concept in supply chain, only instead of a vacation picture, it is an inventory status event where every partner and stakeholder gets the new ETA news instantly. These networks are not just technology platforms; they are places populated with communities, and the communities are the solution. This is cloud supply chain.

Greg Kefer is director/corporate marketing at GT Nexus. GT Nexus provides a cloud-computing platform that is utilized to manage supply chains at major manufacturing, retail and logistics firms.












 
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