One technology that plays a crucial role in supply chain management (SCM) is cloud-based supply chain management systems. As will be described, cloud-based SCM systems can both mitigate and cause supply chain disruptions.
Cloud-based SCM systems can be either self-hosted by a company or are hosted by a cloud service provider. The primary advantage of self-hosting is data privacy: data is stored on the company’s own servers. The disadvantages are costs as well as vulnerability to physical disruptions (Temjanovski et al., 2021, pp. 28-30).
Hosting by a cloud service provider is the usual way companies host their SCM systems. While the company no longer “owns” their data, the problems of scaling and of IT and security maintenance are transferred to the cloud service provider. This is usually less expensive than self-hosting. In addition, supply chain visibility is generally available to supply chain partners (Temjanovski et al., 2021, p. 30).
The largest cloud service provider is Amazon Web Services (AWS). They provide services to most parts of the world, the major exceptions include Russia, Iran, and North Korea.
Within the United States, AWS has servers located in four regions (large geographic areas) for private or commercial use plus two separate regions dedicated to government use (AWS Documentation, n.d.). Each region has anywhere from two to four availability zones (distinct locations within a region), and within those availability zones are one or more data centers. AWS documentation notes that each datacenter has “redundant power, networking, and connectivity, and housed in separate facilities” (AWS Documentation, n.d.). At each level (region, AZ, datacenter), a failure at one level is isolated from other levels. Data is mirrored between the different AZs in a region, ensuring redundancy.
Because of all this, data loss is extremely rare. Permanent service outages are even rarer, requiring the serious faults at geographically dispersed locations. Service interruptions are possible, however, even with AWS’ level of redundancy and fault tolerance.
For example, an outage in US-EAST-1 Region on 30 July 2024 made Ring home security cameras and doorbells unusable. Numerous web services went down, including Goodreads. This outage wasn’t limited to online services: Whole Foods registers were down, and Amazon delivery drivers couldn’t complete their routes because the app they use when delivering packages was unavailable (Harris, 2024).
Cloud-based SCM software is certainly cost effective, permits visibility to supply chain partners, and data loss is avoided through periodic backups as well as redundant storage. Service outages do occur, and the 30 July 2024 outage shows that these outages have grave consequences to both online and real-world services.
References
AWS Documentation. (n.d.). “Regions and Availability Zones.” Retrieved 15 September 2024 from https://aws.amazon.com/about-aws/global-infrastructure/regions_az/
Harris, D. (2024). “AWS outage hits Amazon services, Ring, Whole Foods, Alexa.” CRN. Retrieved 15 September 2024 from https://www.crn.com/news/cloud/2024/aws-outage-hits-amazon-services-ring-whole-foods-alexa
Temjanovski, R., Bezovski, Z., & Apasieva, T. J. (2021). Cloud computing in logistic and supply chain management environment. Journal of Economics, 6(1), 23-32. Retrieved 15 September 2024 from https://eprints.ugd.edu.mk/27861/2/4191-Article%20Text-6939-1-10-20210224.pdf
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