Information Technology Reference
In-Depth Information
we propose the following definition: “A Cloud
Supply Chain is two or more parties linked by
the provision of Cloud Services, related informa-
tion and funds” (based on Tsay, A. et al. 1998;
Paulitsch, M. 2003).
On a strategic and operational level a Cloud
Supply Chain Management (C-SCM) has to be
established as part of companies' IT organiza-
tions as part of a whole life-cycle concept. A
C-SCM represents the management of a network
of interconnected businesses in the Cloud Com-
puting area involved in the end-to-end provision
of product and service packages required by end
Cloud customers. In order to capture all these
aspects we define it as followed: “Cloud Supply
Chain Management (C-SCM) is the term used
to describe the management of the provision of
Cloud Services, information, and funds across the
entire supply chain, from hardware suppliers to
component to data center operators producers to
distribution channels, and ultimately to the end-
consumer”. Based on (Johnson, M. & Pyke, D.
1999) Cachon and Fisher show that supply chain
management is not only sharing of information that
leads to cost improvements in a supply chain. But
it is the management and restructuring of services,
information, and funds based on a life-cycle ap-
proach (Cloud Application life-cycle) (Cachon,
G. & Fisher, M. 2000) as shown in Figure 1. This
lifecycle could be regarded as the integration
and exposure of the available resources towards
delivery of a full solution to the end customer.
This supply-based lifecycle represents a meth-
odology for Cloud service management and is
highly coincident with typical software lifecycle
methodologies, but including some Cloud-specific
features (e.g. on-demand provisioning, elastic-
ity, etc.). Section 2 presents this lifecycle and its
related tools in detail.
A supply chain has to be classified according to
the product it supplies. Fisher classifies products
primarily on the basis of their demand patterns into
two categories: products are either primarily func-
tional or primarily innovative (Fisher, M. 1997).
Functional products satisfy basic needs that do
not change much over time, have predictable and
stable demand with low uncertainties and have
long life cycles (typically more than 2 years). Due
to their stability, functional products favor compe-
tition, which leads to low profit margins and, as a
consequence of their properties, to low inventory
costs, low product variety, low stockout costs, and
low obsolescence (Lee, H. 2002; Fisher, M. 1997).
Whereas innovative solutions are characterized
by additional reasons for a customer in addition
to basic needs that lead to purchase, unpredict-
able demand (that is high uncertainties, they are
difficult to forecast and variable in demand and
have short product lifecycles (typically 3 months
to 1 year) (Lee, H. 2002).
In general, the products coming out of emerging
(Information and Communication Technologies)
ICT are to be classified as innovative products, but
have certain characteristics of functional products
as well. Cloud Services should fulfill basic needs
of customers and favor competition due to their
reproducibility. But they also show characteristics
of innovative products as the demand is in general
unpredictable (on-demand business model) and
have due to adjustments to competitors and chang-
ing market requirements very short development
circles. So Cloud Services as a product need to be
classified as innovative, while they still feature
characteristics of functional products. This mixed
characterization is furthermore reflected when it
comes to the classification of efficient vs. respon-
sive Supply Chains. Whereas functional products
would preferably go into efficient Supply Chains,
the main aim of responsive Supply Chains fits the
categorization of innovative products.
In general a supply chain performs two types
of functions (Fisher, M. 1997):
•
Physical function comprises the produc-
tion of the product out of raw material or
Search WWH ::
Custom Search