Managers must consider the virtual supply chain too


Companies are increasingly relying on technology to streamline business processes and foster organizational growth. That's certainly true of the supply chain as well, as managers look for any means available to improve the efficiency of manufacturing while also reducing the time it takes to bring a product to market.

That being the case, supply chain management practices must now address both physical and virtual environments, according to Peter den Dekker, the president of the Federation of European Risk Management Associations.


"Business models and processes are both different and more complex than they were 10, or even five years ago. We face economic uncertainty on a scale that many of us have never experienced before," den Dekker said in his keynote speech during the recent 2011 FERMA Risk Management Forum in Stockholm.

These days, effectively managing a community of business partners and the manufacturing process requires a company to account for technology, den Dekker said. No longer are supply chain risks and potential issues centered on trucks being delayed or a supplier falling behind.

To illustrate this growing trend, den Dekker highlighted technological issues that may arise within the supply chain. Problems such as cyberattacks on a supplier's network or downtime suffered by a cloud solutions vendor now must be taken into account when practicing supply chain community management.

Add those to the issues already faced by supply chain managers and the task could become drastically more difficult without the appropriate management practices in place.

"Today and even more in the future, we also have to consider the exposures our companies have from virtual supply chains, as IT moves into the cloud," den Dekker said. "It is demanding enough to be confident about the quality of our partners’ suppliers when they have a presence on the ground. How much more difficult will it be when they are in the cloud?"

The cloud has been creeping into many business processes during the past several years, and now it seems that the supply chain is no different.

Rising adoption rates for cloud computing has been one of the most important trends in enterprise IT, and it's one that won't slow down anytime soon. According to new research from KPMG International, 81 percent of respondents to a poll have already moved at least one business activity to the cloud.