Cloud-Based Supply Chain Integration Service Platform

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1 JOURNAL OF ELECTRONIC SCIENCE AND TECHNOLOGY, VOL. 11, NO. 2, JUNE Cloud-Based Supply Chain Integration Service Platform Po-Chia Chiu, Anthony Y. H. Liao, Chin-Hung Liao, and Yung-Nane Yang Abstract In recent years, Taiwan has enhanced the manufacturing advantages in the competitive global market because of excellent manufacturing processes, product quality, and the flexible delivery date and speed. However, how to maintain the competitive advantages in the global market has become an issue. Due the advanced development of the Internet, the cloud computing technology has significant progress and become more matured. Therefore, if the cloud computing technology can be applied in the supply chain of the manufacturing industry, the information among manufacturing, assembly, logistics, sales, and customers can be shared and accessed easily. In this study, a cloud-based supply chain integration service platform of the manufacturing industry is developed, and this platform includes the supplier management, procurement and materials management, manufacturing management, facilities planning, customer service, transportation and physical distribution, and information flow to form a supply chain integration service cloud. Thus, the members of the whole supply chain integration service cloud are able to work together, and rapidly deploy and dynamically allocate resources, and the computer hardware and software resources of the upstream and downstream can be appropriately shared. By doing so, the inventory fluctuations caused by the bullwhip effect can also be reduced. Eventually, it will achieve the goals of shortening delivery time, raising production capacity utilization, and decreasing the material preparation time. Index Terms Cloud computing, supply chain integration, supply chain management. 1. Introduction In the era of rapid development of information Manuscript received October 23, 2012; revised December 5, P.-C. Chiu is with the Graduate Institute of Political Economy, National Cheng Kung University, Tainan, and also with the Department of Applied Informatics and Multimedia, Asia University, Taichung ( A. Y. H. Liao is with the Department of Applied Informatics and Multimedia, Asia University, Taichung (Corresponding author C.-H. Liao is with the Department of Computer Science and Information Engineering, Asia University, Taichung ( Y.-N. Yang is with Graduate Institute of Political Economy, National Cheng Kung University, Tainan ( Digital Object Identifier: /j.issn X technology, the cloud computing becomes a popular concept in information technology applications. Because of the characteristics of cloud computing, it makes today s businesses provide increasingly diverse services on the Internet. Meanwhile, since a large number of cloud service providers build up cloud marts, it changes the existing business models [1]. Since there are many cloud service providers in the cloud computing environment, cloud users in the cloud mart face the difficulties to quickly find appropriate cloud service providers. Therefore, how we can assist the users in the cloud environment to quickly find the appropriate services needs to be explored [2]. In addition, in this study, the cloud computing technology is employed to build a supply chain integration service platform that allows the processes of each small and midsize enterprise consistent, and the critical assets and equipments can be coordinately managed and maintained. Moreover, it will reach better integration of upstream and downstream information. 2. Research Objectives The objective of this study is to effectively use the cloud technology resources to improve the efficiency of the cloud-based supply chain integration services, therefore, in the era of advanced cloud technology, building the cloud-based supply chain integration service platform to provide a cloud-based trading platform for fulfilling customers needs can alleviate the constraints of computer hardware and software in the customer ends. It can improve the flexibility of the system, and offer customers the convenience of trading through the cloud. The transaction accuracy among the manufacturers, logistics center, and customer can be rapidly supplied via the cloud platform. Therefore, the following main objectives are proposed in this study: (1) Reduce the burden of computer hardware and software for the supply chain members. (2) Improve supply chain integration service platform to facilitate the sharing of resources. (3) Integrate the e-commerce exchange platforms developed in the past, and try to plan a set of supply chain integration services sharing platform to reduce the difficulty of the operations on the hardware and software, so that the customers can implement the procurements through different platforms, and do not need to consider the requirements of hardware. (4) Use the cloud computing technology to provide a shared application platform in order

2 202 JOURNAL OF ELECTRONIC SCIENCE AND TECHNOLOGY, VOL. 11, NO. 2, JUNE 2013 to improve the convenience and sharing of the transaction and trading information. (5) Utilize the characteristics of the cloud computing to integrate and standardize the services and reduce the information complexity at lower maintenance and operation costs, so that more customers can join the network of procurements. (6) Ensure the security of customers transactions in the supply chain integration service platform. The study devotes considerable time to communicate with customers for their demands and service contents, and produces many documents to describe and confirm the requirements of the users. It is expected to construct a supply chain integration services development model, and will be able to reduce the implementation costs and time of the supply chain integration service platform, and decrease the difficulty of maintenance and updating. 3. Literature Review 3.1 Cloud Computing The cloud computing technology is not a new technology, which is actually a virtual space concept and is defined by the National Institute of Standards and Technology (NIST). The main applications of cloud computing is to combine with the computing technology to develop a new type of network interaction model, which is also contributed to the information technology (IT) industry for providing a variety services on the cloud services platform [3]. In other words, the human beings use the resources of the Internet to store data and services centrally in massively scalable center (MSC), and the computers can interactively implement operations and data exchange, so that more network services can be utilized without boundary limitation, meanwhile, it also creates a different value for the industry [4]. During the process of implementing the concept of cloud computing, there are many emerging cloud computing services technologies, which are applied for a variety of purposes. For example, small and midsize enterprises manage the operations of the companies through the cloud, educational institutions use the cloud to carry out teaching and research, and individual users take the advantage of the cloud to deal with the audio-video processing and the applications of audio and video files [5],[6]. 3.2 Supply Chain Management Supply chain management is a refined integration of the upstream suppliers and downstream channel customers of the industry in order to enhance the competitiveness of enterprises and integrate the partners in the market. Supply chain management refers to all relevant activities dealing with the logistics, information flow, and cash flow process and management among the members of the supply chain (including suppliers, manufacturers, assembly plants, distributors, customers, etc.), and its aim is to minimize the order processing cycle period of time, minimize inventory levels and costs, maximize the benefits of overall supply chain, and provide services to go beyond the level of customer expectations. Supply chain management is a set of integrated system from the supplier to the end-user logistics control and planning. Its purpose is to pursuit the overall efficiency of the supply chain, and strengthen the collaborations of all the members to provide customers satisfied products or services [7],[8]. Supply chain management opens up the horizons of the management in the industry. It improves competitiveness by collaborations among different organizations, suppliers, manufacturers, and distributors, and it breaks through the constraints of the tasks which a single organization can accomplish with limited resources in the past. In addition, with the innovation of information technology, the cost of the enterprise adopting cross-organizational cooperation is gradually reduced. The evolution of the supply chain management makes the enhancement on the competitiveness of the organization possible by the collaboration among supply chain members. Although the current development of information technology is conducive to the partner resource integration and collaboration in the supply chain, the relationships of collaboration among enterprises and the management of the supply chain compared with the management of a single organization in the past is more complex and challenging [6]. The main cause of this phenomenon is that supply chain management covers a complex industrial structure, and the management and the operations are affected by the characteristics of industry supply chain operations and uncertainties encountered [9]. How to plan the operation mechanism of the supply chain based on the industry s supply chain characteristics and the problem of uncertainty encountered becomes the important issue on current supply chain researches. The range of supply chain management applications is very broad, so this study explores the current academic researches on the supply chain and compiles the results as follows. 1) Ellram [10] : the management of the supply chain is the integration approach from the supplier to the user materials planning and control. The benefit of all members is the core mission. Moreover, the material flow process is often in a networked structure. 2) Cooper [11] : the connotation of supply chain management is the management of all the supply chain members from the raw materials supplies to the delivery of goods etc., which are not limited to single enterprise. All members in the circle will also be treated as one entity, and the activities of production, distribution, and sales are treated as the decision-making level. 3) Carter and Ferrin [12] : supply chain management

3 CHIU et al.: Cloud-Based Supply Chain Integration Service Platform 203 should be directed to other enterprises in the supply chain system in the same way organized to form the collaboration of the whole network, and to commonly share information contents and detailed plans to reach common benefit of whole supply chain channel. 4) Amelia and Smeltzer [13] : the significance of supply chain management is to integrate all enterprises in the supply chain. Suppliers, customers, and logistics providers share the necessary information and plan to make the channel more efficient and competitive. The sharing model is more accurate and detailed than the traditional one, and the relationship between buyers and sellers is closer. 5) Schonsleben [14] : supply chain management is the management activities of converting the raw materials into the intermediates and final products, and management activities of delivering final products to the customers. 3.3 CPFR The collaborative planning forecasting and replenishment (CPFR) first originated from Wal-Mart and its suppliers Warner-Lambert, SAP, the Manugistics Software Company, and Benchmarking Partners consulting company. They established the Retail Supply Chain Working Group in September 1995, and developed a methodology of CPFR to deal with the problems of the retail supply chain. The collaborative sales forecasting and replenishment began in the product of Listerine mouthwash, and the new model was called the collaborative forecasting and replenishment (C-FR) [15]. In 1998, the CPFR White Paper was proposed by Voluntary Interindustry Commerce Solutions Association (VICS) of the United States, which includes the interactions among the planning, implementation, and monitoring of all businesses in the manufacturing and sales of the product supply chain system, in order to achieve the best results, and expect to synchronize operations through repeated business coordination and interaction with the members of the supply chain system. CPFR can be regarded as a collaborative planning, forecasting, and replenishment standard technology [16]. CPFR is collaboration practices of supply chains, so that the partners can use the information technology to share and forecast the replenishment information, and establish the sales forecasting model of overall supply chain to eliminate the barriers among its members, and to share their information and risk. It can reduce the inventory costs of overall supply chain, and increase the availability of goods and sales. Therefore, the partners can implement the program evaluation and decision-making together based on the guiding structure, model, and technology [17]. 4. Research Methods In this study, the research references related to the cloud technology and supply chain management are collected to realize the design methods and drawbacks of the developed e-commerce exchange platform. The design concept of cloud computing is applied into the supply chain of the manufacturing industry in production, assembly, logistics, sales and customers. It is expected that in the whole production and sales process the customers can enjoy the powerful features provided by the cloud via a variety of network terminal equipments through huge computing capabilities of cloud technology. Furthermore, the customers can obtain a faster way to shop, and the sales platform combining the logistics, cash flow, information flow can fulfill the needs of the booming online shopping trends. Therefore, this study applies cloud computing to the supply chain of manufacturing industry, which covers the supplier management, procurement, materials management, manufacturing management, facilities planning, customer service, transportation and physical distribution and information flow, and they are integrated into a supply chain integration service cloud. It allows the cloud of the entire supply chain integration services to operate collaboratively with rapid deployment and dynamic allocation of resources, and support for virtualization flexible configurations and scalability. Moreover, the hardware and software resources of the upstream and downstream can be appropriately shared. 4.1 Description of Case Study The case study company was established in It is a leading company in the global design manufacturing services (DMS) industry, and provides complete DMS solutions. The products of this company mainly cover four service areas: information products, communications products, consumer electronics, and automotive electronics. The company combines the technical expertise and experience of advanced microelectronic packaging to provide the products and services from the module to the system motherboard. Since its inception in 1976, based on many years of successful cooperation with world-class customers and world-class management experience, the case study company has state-of-the-art product development and process capabilities and can provide complete services from design to distribution. With its flexible manufacturing services and advantage on global product logistics, it serves the large scale, medium scale, and diverse customized brand customers. Meanwhile, combining the advanced automation equipment, manufacturing process technology, engineering research and development capabilities, and excellent quality with perfect integrity of the supply chain information systems, it will become an important partner for design and operation for the customers. The case study company is the world s largest design

4 204 JOURNAL OF ELECTRONIC SCIENCE AND TECHNOLOGY, VOL. 11, NO. 2, JUNE 2013 and manufacturing service company. In addition, the case study company is mainly engaged in the research and development on IT products, communications products, consumer electronics and automotive electronics, production, and sales. Therefore, the case study company has suppliers and customers of the supply chain and demand chain systems, as shown in Fig. 1. The supply chain system is divided into two categories, the outsourcing and commercially available. The outsourcing suppliers follow the engineering diagram of the case study company to provide modules, motherboard, system products, and services. Commercially available suppliers provide general specifications products. In the demand chain system, the marketing model is self-developed by the business division and the collaboration with overseas brokers, as shown in Fig Research Design In this study, a cloud-based supply chain integration service model is established as the standard. The concept of the proposed model is integrated into the existing supply chain management system to become the cloud-based supply chain integration service cloud. Therefore, this study uses the electronics manufacturing industry as an example and applies the two models of supply chain management, supply chain operations reference (SCOR) model and traditional enterprise commercial behavioral model to establish the supply chain integration service cloud standard model and provide the establishment of supply chain integration service platform standards in the future, as shown in Fig. 3. Fig. 1. Corresponding diagram between customer service cloud and merchandise manufacturing and supply cloud. Fig. 2. System architecture of the case study. Fig. 3. Supply chain integration service cloud model. In order to reduce the redundancy of hardware and software, this study applies cloud-based supply chain integration service platform to establish the customer service cloud and commodity manufacturing supply cloud. Customer service cloud serves as a B2C cloud supply chain sales platform for commodity sale, purchasing, transportation, manufacturing, and return of goods. Furthermore, commodity manufacturing supply cloud serves as a B2B supply chain platform for commodity and parts production, procurement, transportation, manufacturing, and return of goods, as shown in Fig Cloud-Based Supply Chain Integration Service Platform Development In this study, a system is developed to analyze the supply chain transaction history for helping the manufacturing industry rapidly obtain the information regarding the production parts and products based on the analysis results of the transaction history and quickly respond to the market demand. It is hoped to overcome the shortcomings of slow speed in obtaining the demand information in the ever-changing market. The historical transaction records can be used in further data analysis, and used for market pattern classification and the implementation of market forecasts, so that the overall manufacturers can supply more rapidly, as shown in Fig. 4. The proposed cloud-based supply chain integration service platform is constructed under Windows 2008 Server R2 environment using VMware Workstation, VMware vsphere and Visual Studio 2010 C#, and the system consists of the integration platform of the client, manufacturing center, and suppliers. The proposed system can quickly collect the dispersed global production information and integrate the related information into the manufacturing execution system (MES), enterprise resource planning system (ERP), supply chain management system (SCM), and the enterprise asset management system (EAM), as shown in Fig. 5.

5 CHIU et al.: Cloud-Based Supply Chain Integration Service Platform 205 Fig. 4. Cloud services business model diagram of manufacturing industry. Cloud-based Supply Chain Integration Service Platform Customer Place the Order Customer Order Inquiry Customer Receiving Exceptions Management Delivery Shorten Customer Service Cloud PO Manufacturing Site Packaging Materials Distribution Logistics Warehousing Delivery Information Center Cloud Bill Of Materials Production Schedule Planning Quality Control / Inspection Warehousing Processing Assembly Outsourcing/ Procurement Shipping Distribution Center Internal and External Collaborations Production Capacity Utilization Rate Increased Supplier Service Cloud Procurement Items PO Outsourcing Items ProcurementItems / Materials Delivery (Warehousing) Quality Management Materials Preparation Time Shorten Fig. 5. Cloud-based supply chain integration service platform diagram. 4.4 System Implementation On the cloud-based supply chain integration service platform, after placing an order for the customer via the Internet, the status of the production for the order can be real-time monitored, the profile of key production components can be traced, and the order shipment and delivery date can be confirmed. In order to do the most immediate delivery, the products are rapidly delivered to the stores of the sales channel, as shown in Fig. 6 and Fig. 7. On the other hand, the supply chain integration through the cloud-based service platform can make the entire supply chain process management more streamlined and easy to control, as shown in Fig. 8. In the system operation, first click on the process of the project to set the process work items, work time and date of completion of the process in order to establish the improvement and progress reports, as shown in Fig. 9. After the completion of the work item is set, the monitoring on the implementation and progress of projects of the work is implemented, as shown in Fig. 10. The proposed cloud-based supply chain integration service platform is a set of information platform for small and medium-sized enterprises (SMEs), so it can fully be applied in the supply chain management of the manufacturing enterprises. In order to help the suppliers facilitate the monitoring on the shipment and delivery schedule, the work item of completion progress monitoring function is also added in the system.

6 206 JOURNAL OF ELECTRONIC SCIENCE AND TECHNOLOGY, VOL. 11, NO. 2, JUNE 2013 Fig. 6. Cloud-based supply chain integration service platform screenshot. Fig. 10. Project implementation and progress of work screenshot. 5. Research Results and Performance Analysis Fig. 7. Production, shipment of orders, and delivery monitoring screenshot. Fig. 8. Cloud-based supply chain integration services process screenshot. Fig. 9. Work item setting screenshot. 5.1 Interview Questionnaires This study applies expert interview questionnaires to investigate the satisfaction degree on using the cloud-based supply chain integration service platform. Moreover, a 5-point Likert scale is adopted by the questionnaire to let the user select their degree of satisfaction for each question according to the actual situation. The five options for the degree of satisfaction are strongly agree, agree, undecided, disagree, and strongly disagree. In this survey, total 50 copies of questionnaires are issued, and the valid questionnaires are 40 copies, which are used to do the satisfaction degree analysis for the company after using the cloud-based supply chain integration service platform. 5.2 Platform Satisfaction Statistics Analysis According to satisfaction interview questionnaires, after using the cloud-based supply chain integration service platform, the case study company set a clear supply chain transaction record process. The transaction record can be utilized to do the analysis, and the analysis results can help the manufacturing industry rapidly acquire the manufacturing parts or products information. Therefore, it can quickly respond to the market needs. The analysis results of this survey on the proposed platform can increase the convenience of operations, reduce the transaction restrictions of user end, and raise the willingness of manufacturers and suppliers. In this study, the survey value of the variable in terms of the platform quality is The users are most satisfied with the cloud-based supply chain integration service platform to provide the usefulness of functionality (with the value of 3.72), and the users are most unsatisfied with the execution reaction time of the cloud-based supply chain integration service platform (with the value of 3.24). The survey value of the variable in terms of information quality

7 CHIU et al.: Cloud-Based Supply Chain Integration Service Platform 207 is The users are most satisfied with the order or shipping information provided by the cloud-based supply chain integration service platform on the importance during the transaction process for the suppliers (with the value of 3.88), and the users are most unsatisfied with the order or shipping information provided by the cloud-based supply chain integration service platform on the transaction record for the suppliers (with the value of 3.57). The survey value of the variable in terms of user satisfaction is The users are most satisfied with the cost-effectiveness and functions of the cloud-based supply chain integration service platform (with the value of 3.58), and the users are most unsatisfied with the supports and participation of the management level on the cloud-based supply chain integration service platform (with the value of 3.43). The statistics of the degree of satisfaction are shown in Table 1. Table 1: Statistics of the degree of satisfaction Variables / Measured items M SD Platform quality Operation and ease of use for the platform Operational reliability for the platform Ease of access to information for the platform Stability of operation for the platform Response time of the platform Usefulness of the functions for platform Integration of the platform with other platforms Flexibility of operation for the platform The consistency of the operation interface for the platform Information quality Integrity of orders or shipments for the platform Order or shipments reliability for the platform Order or shipping correctness for the platform Order or shipment in a timely manner for the platform Order or shipping process information on the transaction records for the suppliers Order or shipping information on the importance of the transaction process for the suppliers User satisfaction Receiving platform related knowledge and education and training Process activities degree of participation for the platform Cost-effectiveness and functions of the platform Supports and participation of management level for the platform Level of satisfaction for the platform Satisfied with the overall experience of the platform Conclusions This study mainly lies in how to effectively use cloud-based supply chain integration and sharing, as well as reducing hardware and software operational difficulties. Therefore, the customers can implement procurements on the system through different platforms, regardless of the hardware requirements. The cloud computing technology is applied to provide a platform to improve the ease of transactions and the trading information resources can be shared. Therefore, through the establishment of the development model on the cloud-based supply chain integration services, it can reduce the costs of construction, time, and maintenance for the supply chain integration service platform. The results of this study reveal that the proposed platform makes the processes of the platform members consistent. In addition, the important assets and equipments can be managed and maintained together, and the data integration between the upstream and downstream is improved. This study also can be a good reference for the supply chain integration on a cloud platform. References [1] A. C. Bugbee, The equivalence of paper-and-pencil and computer-based testing, Journal of Research on Computing in Education, vol. 28, no. 3, pp , [2] A. Michael, F. Armando, G. Rean, A. D. Joseph, K. Randy, K. Andy, L. Gunho, P. David, R. Ariel, S. Ion, and Z. Matei, A view of cloud computing, Communications of the ACM, vol. 53, no. 4, pp , [3] B. Hayes, Cloud computing, Communications of the ACM, vol. 51, no. 7, pp. 9 11, Jul [4] P. Mell and T. Grance, The Nist Definition of Cloud Computing, Technical Report, National Institute of Standards and Technology, [5] F. M. Aymerich, G. Fenu, and S. Surcis, An approach to a cloud computing network, in Proc. of the 1st Int. Conf. on the Applications of Digital Information and Web Technologies, Ostrava, 2008, pp [6] I. Foster, Y. Zhao, I. Raicu, and S. Lu, Cloud computing and grid computing 360-degree compared, in Grid Computing Environments Workshop, New York, 2008, pp [7] D. M. Lambert, C. M. Cooper, and J. D. Pagh, Supply chain management: implementation issues & research opportunities, The Int. Journal of Logistics Management, vol. 9, no. 2, pp. 1 19, [8] M. G. Christopher, Logistics and Supply Chain Management, London, UK: Pitman Publishing, [9] J. T. Mentzer, W. DeWitt, J. S. Keebler, S. Min, N. W. Nix, C. D. Smith, and Z. G. Zacharia, Defining supply chain management, Journal of Business Logistics, vol. 22, no. 2, pp. 1 25, [10] L. M. Ellram, Supply chain management, Int. Journal of Physical Distribution and Logistics Management, vol. 21, no. 1, pp , 1991.

8 208 JOURNAL OF ELECTRONIC SCIENCE AND TECHNOLOGY, VOL. 11, NO. 2, JUNE 2013 [11] C. M. Cooper, D. M. Lambert, and J. D. Pagh, Supply chain management: more than a new name for logistics, The Int. Journal of Logistics Management, vol. 8, no. 1, pp. 1 14, [12] J. R. Carter and B. G. Ferrin, The impact of transportation cost on supply chain management, Journal of Business Logistics, vol. 16, no. 1, pp , [13] S. A. Carr and R. L. Smeltzer, The relationship of strategic purchasing to supply chain management, European Journal of Purchasing & Supply Management, vol. 5, no. 1, pp , [14] P. Schonsleben, With agility and adequate partnership strategies towards effective logistics networks, Computers in Industry, vol. 42, no. 1, pp , [15] D. Fink, Guidelines for the successful adoption of information technology in small and medium enterprises, Int. Journal of Information Management, vol. 18, no. 4, pp , [16] H. Gatignon and S. T. Robertson, Technology diffusion: an empirical test of competitive effects, Journal of Marketing, vol. 53, no. 1, pp , [17] J. Y. L. Thong, An integrated model of information systems adoption in small business, Journal of Management Information Systems, vol. 15, no. 4, pp , Po-Chia Chiu received his B.S. and M.S. degrees from Central Police University, Taoyuan. He is currently pursuing the Ph.D. degree with the Graduate Institute of Political Economy, National Cheng Kung University, Tainan. He is also an adjunct lecturer with the Department of Applied Informatics and Multimedia, Asia University, Taichung. His research interests include supply chain management, production and operations management, logistics management, and customer relationship management. Anthony Y. H. Liao received his M.S. degree in computer science and the Ph.D. degree in computer science and engineering from the University of Louisville, Louisville, Kentucky in 1997 and 2001, respectively. He is currently an associate professor and the Chairman of the Department of Applied Informatics and Multimedia, Asia University, Taichung. Dr. Liao is a senior member of IEEE, and a member of ACM. His research interests include cloud computing, E-learning, management information systems, artificial intelligence and expert systems, E-commerce, knowledge management, software engineering, and software quality management. Chin-Hung Liao was born in Taichung in He received his M.E. degree in computer science and information engineering from Asia University, Taichung in He is currently pursuing the Ph.D. degree with the Department of Computer Science and Information Engineering, Asia University, Taichung. His research interests include cloud computing, E-learning, and software engineering. Yung-Nane Yang received his Ph.D. degree in public administration from the University of Southern California, California in He is currently a professor and the Director of the Graduate Institute of Political Economy, as well as a professor and the Chairman of the Department of Political Science, National Cheng Kung University, Tainan. His research interests include technology management, organization management, and policy analysis.

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