The software-defined approach to IT infrastructure has influenced the way organizations perceive their networks, storage and even entire data centers. The basic premise of the paradigm is to separate firmware from the hardware that it governs. This allows organizations a greater degree of freedom in their technology choices. Because the software can be migrated between hardware components, software-defined principles create a more flexible data center.
Some of the factors that have driven demand for software-defined networking and similar technologies have also been felt by supply chain management professionals. In particular, the rapid rate at which IT ecosystems must evolve places an emphasis on flexibility and customization. By using best-in-breed components that are tailored to a specific need, organizations have been able to get more out of their IT solutions while maintaining affordability. In a recent report, IBM proposed that similar factors would drive adoption for a software-defined supply chain approach within the electronics industry.
Supply chain trends: Emphasis on integration
The rate of change in today's supply chains is on par with that of rapidly proliferating technology. As organizations onboard new partners with varying degrees of B2B integration capabilities, for instance, they require solutions that can maintain visibility and provide secure access to data. Supply chain management complexity within the electronics industry has also been driven by new technology such as 3D printing, open source and more intelligent robotics, according to IBM.
So, what does software-defined have to offer the electronics supply chain? For one, IBM predicted that digitizing manufacturing processes will become 23 percent less expensive than traditional methods within the next decade. The second core benefit is a higher degree of customization, which allows organizations to better meet their customers' needs. This may be particularly important, given the three main implications the report outlined for future supply chains:
- Customers will have greater influence over product design
- The dynamics of market competition will change significantly
- Supply chains will become more flexible and localized
"The software-defined supply chain will require an entirely new level of integration among strategy, design and execution, and it will redefine how companies manage and measure their operations, work with partners and serve clients," the report stated.
While IBM focused on the electronics sector, there many of those concepts can be applied to every industry. One of the benefits of software-defined IT infrastructure is that it enables centralized control even within a diverse data center, since many of the hardware management functions have to be brought to the software level. As ZDNet reported, this was one of the primary motivations for Intel as the company adjusted its data center.
Similarly, supply chain management professionals can benefit from centralizing important information such as data exchanges and customer and partner profiles.
Perhaps the most important lesson that can be extracted from trends like the software-defined data center is that it is sometimes important to disrupt the standard way of doing things. While it may may be difficult to maintain productivity in the short term, a large-scale shift in operational practices and technical solutions can also become the starting point for opportunity. In Intel's case, the company had to place much more emphasis on scalable technology so that its data center could more readily adapt to new workload demands.
In a supply chain management scenario, this translates to solutions that streamline mission-critical processes. To this end, automation is an essential feature to look for, but one that is still not widely adopted. As this IBM infographic showcases, many organizations still rely on manual processes such as email (78 percent) or phone (50 percent) to collaborate with partners. Taking some principles from the software-defined paradigm, organizations would improve their supply chains by moving to a more centralized and flexible model.
Supply chain and B2B integration go hand-in-hand, find out how automating these processes can pass on savings to your customers with our free information kit below: