Applying service-oriented architecture to the supply chain

By Ahmed ElAmin

- Last updated on GMT

Related tags: Logistics, Supply chain

To meet the challenges of globalisation many companies are shifting
from a 'push' supply chain model to a flexible, demand-driven
one by applying service-oriented architecture (SOA) technology,
according to an IBM study.

"This flexibility and responsiveness, in turn, can fuel sustainable growth,"​ IBM stated. "Companies can facilitate the creation of agile supply chains by establishing a blueprint that enables visibility of all aspects of their globally integrated supply chains. We believe service-oriented architecture can provide the foundation for that blueprint."​ The IBM study provides insights in to the best practices by multi-national processors and other manufacturers already dealing with issues relating to global sourcing, aggressive competition, combined with increasing customer demand. "When compounded by complex logistics networks, capacity constraints, distributed and fragmented information, as well as increasing security requirements, these global market challenges and complexities can lead to excess inventory, longer cycle times and deteriorated customer service,"​ IBM stated. Successful global companies have supply chains that are flexible, with the capability to quickly respond to shifts in supply, production and demand, IBM stated in the report. The desire to become demand-driven requires sophisticated, flexible responsiveness at every point along the supply chain - from sourcing and procurement to consumption,. As well, such supply chains can help companies move rapidly into emerging markets, while simultaneously allowing them to take advantage of global sources of supply, production, distribution and talent, IBM claims. SOA is a term applying to the business practice of breaking down everyday business applications and information into individual functions and processes called 'services'. SOA then gives logistics managers the ability to mix, match and reuse the services to create new, business processes to address changing corporate priorities. The services then can be made available to others in the extended network - such as other departments, trading partners and customers. "And when processes are altered, companies can use existing, assembled, composite services and just 'snap-in' the additional new process, shortening the response time,"​ IBM stated. The report deals with how companies can speed up the delivery of new, high-margin products to customers while obtaining realtime visibility in the supply chain. It can also help manufacturers achieve realtime collaboration and data exchange with trading partners, synchronise supply and demand while balancing inventory, and streamline the effectiveness of global sourcing and supplier management. SOA can also help managers adopt an enterprise asset management discipline to better realise the value from critical assets, and gain a deeper understanding of a product's lifecycle, IBM stated. The complete study is available here​.

Related topics: Processing & Packaging

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