Cloud Computing, Software as a Service and APIs

Welcome to this session on ICT technologies for supply chain innovation. In this session, we will look at cloud computing, software as a service, and open APIs. You will see that these technologies will allow companies in the supply chain to get access on a rental basis, affordable basis, to very advanced software solutions. And maybe even more importantly, the APIs allow them to integrate services in a much more machine to machine way without human intervention. This combined allows supply chains to really become much more innovative using the Lasso for technology and also collaborates on the same systems where they used to be really hindered by a lot of integration problems.

First, a very important evolution in the ICT world is cloud computing and software as a service. This is really useful for companies active in supply chains because they used to buy software. And they were really spending a lot of time to manage their software solutions, to maintain software solutions, to update them, to really support the users of the solutions, to beta and manage the licence contracts. This caused a lot of headache. We’ve seen in ICT that more and more computing facilities and software is now serviced to a cloud model. This means that a large providers of computing facilities offer computing, storage, and the software in the rental model using web technology.

So instead of spending a lot of time in buying and hosting solutions, installing software for your supply chain, now you can simply rent it online and enable your users to access the functionality over the web. This has a lot of benefits. You don’t worry so much anymore about building and maintaining internal systems. And you basically pay in a flexible, variable model. So if you grow, you can really grow your software, and you don’t really have to worry so much about your internal software systems. But maybe the biggest benefit of all is that, through this software as a service model, you can collaborate much more effectively.

You can give other parties in the supply chain access to your software and to your information, and then collaborate using the similar view on the world, using similar information.

There are many examples today of very useful software as a service solutions that you can use in your supply chain. Let me show you one example.

Any transport company uses, today, transport management systems to manage their routes, blend their roots, manage their fleet, track their orders. And this used to be really expensive software that had to be built into your vehicles and had to be installed in your planning room. Today, you simply rent this software. You see here an example of such a system called WebFleet from TomTom. And as you can see, you pay a fixed price per vehicle per month. You instal a box in the vehicle which gives you access to the actual location.

And at the same time, you’re planning room gets access to a web interface where you can see your entire fleet on the map and also assign orders to trucks, inform your customers where the truck is, and so on. This used to be complex. And now, it’s just a matter of setting it up as a software as a service and paying a flexible tariff to get access to this service. Another really important development in the area of ICT is that software is more and more accessible through APIs. API means an application programmers interface. And it allows other software systems to access the functionality of a software system through an interface. So it enables machine to machine communication.

More and more, you realise how extremely important APIs are to connect the services of companies together. So it’s not just for programmers to think about these, but also for managers, for supply chain innovators to realise that their services have to be opened up on the web to allow other companies to effectively make use of the functionality that they offer. Today, it’s becoming so important that some people talk about an API economy where companies very quickly can find services, use services through open APIs on the web and connect the supply chain in a very agile and efficient way.

But this revolution has just begun as many software systems are maybe offered as a software as a service but don’t yet have a very easy to use and open API. By open API, we mean that it’s really clear what the interface of the software looks like, what technology it uses, that this interface is properly supported– so you can find help if you cannot really figure out how to use it and also when the search is not working, there is somebody always fixing it– and it should also be clear in what version of the software is available and what upcoming versions will be published if the service has changed.

More and more, companies start to realise that this is really important to achieve supply chain integration. And all this has become possible through a series of technologies, including the open web standards for internet messaging and a document format called XML, which is the Extensible Markup Language. And it allows us to really define information that we want to exchange between companies. On top of XML, you have to define your semantics– so the type of information you want to exchange in the supply chain. And to achieve that, a lot of semantic standards have been established.

Almost in every industry, there are working groups who are defining the type of information that you want to exchange and standardising this kind of information in a semantic standard. And you can find overviews of these standards on the web for your particular industry. And it’s really worthwhile to go and look at what has been defined for your industry and if you can use it to integrate your supply chain. GS1 is one of the major players in this field. And they’ve defined a whole set of standards like EDI-XML to standardise straight in the supply chain. But there’s also many industry specific organisations that are really busy to define good standards that can benefit supply chain organisations.

So if you can combine these technologies, you can see a world where a lot of services are available as open interfaces. They run on the web, and they can be combined in what we sometimes call a mashup, because they can be quickly combined to integrate the supply chain. And they can be combined not in big IT projects that cost lots of money and require big teams of developers, but they can be combined in really quick ways. In a mashup, you really find the services you need, combine them together in a process work flow, and you have a new service that is useful for your supply chain.

It’s now become popular to organise Hackathons and coding feasts and events, where you bring together developers and create these kinds of solutions as an innovation. And then you can follow up and make really stable solutions for your company using these kinds of technologies. But they do require open APIs and services available on the web usually in a software as a service model. You can find more and more solutions on the web. For example, DHL. They have a really nice open service interface where you can access their services using an XML messaging standard that they came up with.

And here, you can see the type of services you can access, like get a quote for shipping, print a label for a shipment, track your package as it goes through the various steps of distribution, and so on. You can imagine this can replace a lot of phone calls that usually were only about, where’s my package. Has it already been shipped? When will it arrive? These are now replaced by computer to computer messages using these XML standards and APIs. This is what an XML message looks like. You can see it’s almost understandable to a human as well. The type of information is enclosed in tags that say something about the meaning of the information, the semantics.

And then, the message can be parsed by computer, and it can be interpreted by another computer machine. And it enables machines to talk to each other. Another interesting development we see is that specific services are being created that are only assembling information and then opening up this information using, again, an open API. A really nice example is AIS Hub. AIS information is the tracking information of ships around the world. These ships communicate their position using transponders. And these positions are registered by antenna networks. And these networks, again, transmit this information to AIS Hub. And when you contribute to AIS Hub, you can also read information from AIS Hub.

So you can really see it as a kind of information exchange where people contribute location information of ships and where you can also query information of ships. And this enables parties in the supply chain to follow and track ship positions and also predict when these ships will arrive in ports. And, again, this gives us information about when certain cargo will arrive at certain locations. So, summarising, in this session you’ve seen with cloud computing and software as a service really make very advanced technology available to a lot of players in the supply chain. And maybe even more importantly, they allow these companies to work together by giving each other access to the software as a service platforms they can use together.

That’s really a huge opportunity for improving supply chain innovation and collaboration.