Because so many supply chains are expanding globally now, data volumes are increasing, thus creating greater complexity; and with customer demands changing, the reasons to take the plunge are almost a no-brainer. Plain and simple—having clear visibility into your inventory, wherever it resides, can help companies more efficiently optimize the supply chain and save time and money. And the considerations and challenges are really the same for almost any company in any type of industry.
Basically, when you virtualize, you are trying to 1) increase server utilization; 2) improve high availability (by failing over to the virtualized resource pool); 3) lower your management costs; and, 4) reduce deployment and testing time and effort, notes Joe Clabby, president, Clabby Analytics. These motivators can apply to both manufacturers and suppliers.
But don’t confuse supply chain virtualization with moving to a cloud/SaaS model—they are two separate beasts. The point of supply chain virtualization is to gain insight into how all elements of a company’s supply chain are performing. So you could track the purchasing of raw materials through manufacture to delivery, Clabby says. Cloud is a kind of networked environment; SaaS is a way to deliver application functionality as a service.
Perhaps the most critical reason for virtualizing supply chain processes is that as the number of business partners increases, the need for accurate, time-sensitive information becomes more acute, according to the IBM Institute for Business Value. A lack of visibility into the different information sources inhibits supply chain response to unpredictable swings, the institute says.
Data virtualization also helps integrate supply chain information by letting companies gain visibility into disparate ERP, warehouse and logistics management systems and manufacturing execution systems. Companies on the leading edge are thinking about virtualizing so they can create a global view of product supply and demand data, and produce real-time information in order to fulfill orders more quickly. As a result, customer satisfaction will improve, revenue will grow and increase inventory turns.