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When Is a Cloud Like a Factory? A New Way to Look at Cloud Computing

“The CIO as Supply Chain Manager” and “Industrialized IT services” are some of the more recently coined terms used in IT, and not without reason. It is these types of terms which are very appealing to use when there is a need to produce IT services in a fast, flexible and efficient way (read: Cloud computing).


One of the reasons these terms are so appealing is that almost everyone can relate to them, and we all, whether working in IT or in any other industry, share some basic knowledge about factories and supply chains learned during our early days in school. There’s even a fair chance that some of us, including our managers, colleagues, or friends outside of IT, worked in a factory at some point in time, perhaps to earn some extra money during school holidays or even as a regular job. It is this universal shared knowledge and experience that makes analogies with factories and supply chains a very appealing set of tools to simplify our complex world of IT.


But what a pity that the analogy, and the exploitation of all its benefits, frequently stops right there and we continue with our IT gobbledygook and complexities. That’s a huge waste, since the knowledge gained in the world of manufacturing and factories matured over thousands of years, while the IT industry has existed for merely a couple of decades. It’s time to reactivate our shared – sometimes a bit dormant – knowledge and put it to good use in the world of IT. Especially when working in cloud environments, which is all about the mass production and delivery of standardized IT services.


Here’s a quick start. Essentially every factory is part of one or more supply chains. And, viewed from 30,000 feet, every factory does about the same: it buys raw materials or semi-products (Source), turns these into something else (Make) and delivers (Deliver) these to the next party in the supply chain. Sometimes stuff comes back (Return) and all these processes need to be planned and orchestrated (Plan), but that’s basically about it. A model of how this works has been drawn by the Supply Chain Council ( in the SCOR® (Supply Chain Operations Reference) framework.




Supply Chain Council's SCOR® model (


SCOR is worldwide the most accepted framework for organising and managing supply chains and is used by thousands of organisations in almost all industries. That makes the SCOR model very interesting to use in the industry for IT services, such as cloud services, as well.


Even though the first version of the SCOR model was drawn up in 1996, the underlying knowledge and experience has evolved over thousands of years, at least dating back to the period of the construction of the Terra Cotta Army in China. This army consists of thousands of unique soldiers which were all made using just a few standardized components. That’s what we want in IT as well, isn’t it – the ability to make many products and services based upon a few standard building blocks? The Chinese could already do this in 246 to 210 BC.


If you’re interested, you can read more about using knowledge of factories, manufacturing, supply chains and SCOR in my book titled: “The IT Factory – Supply Chain Management for IT Infrastructure Services: Using the SCOR model” - Hans van Aken - ISBN 9789087536862 (or 9789087539368 for the eBook).


Learn about HP Cloud Consulting Services, and read how one company embraced a cloud solution from HP to transform global efficiency (PDF, 180 KB).

KenL | ‎03-08-2012 09:16 PM

This is a really good analogy and metaphor for cloud computing.  Good article Hans. I'll look forward to reading the book. The production/manufacturing/factory end of most companies are a profit center that most enterprises have beat up for decades to reduce costs and improve productivity, yet the analogy to transform IT to do the same thing with the same tools just doesn't resonate for many.


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About the Author
IT Supply Chain Strategist and Enterprise Architect working at Hewlett-Packard. More than 22 years of experience in Consulting and IT Infras...

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