Companies are exploring new ways to innovate and seize the potential that cloud computing offers, especially the supply chain industry. Good supply chain management is essential to operational efficiency, compliance, carbon footprint, and ultimately, the overall success of businesses. If handled correctly, supply chain can improve customer service and boost businesses’ bottom line.
As with many areas of business, the rules of the game are changing. New regulations, increased buyer expectations, shorter product life cycles, fluctuations in demand, new market entrants, more ethical supplier management, poor visibility of globalised supply chains are testing the limits of the traditional supply chain model.
According to an Oracle study, supply chain innovators have 60 per cent better profit margins and 65 per cent better earnings per share than their competitors and the impact becomes clear.
This means a move to the cloud, which is a real game-changer — it is the engine that makes supply chains talk to each other. Fast becoming the dominant IT model, cloud computing provides a wealth of benefits including low upfront investment, secure access, faster deployments, simplified integration, continuous upgrades and effortless scalability.
It empowers businesses to visualise a product in every stage of its lifecycle, in real-time, from raw materials through delivery to end customer.
Since the supply chain is highly fragmented with silos of information, cloud computing makes it easy to share massive amounts of information across an entire global trade network for management to make quick decisions to re-route shipments, locate containers, and collaborate with suppliers to meet customer demand.
It provides a route through which supply chain executives can rapidly and efficiently access innovative supply chain solutions. It encompasses various models, and SaaS is the best-known one, the others being Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). SaaS solutions have a rapid deployment time because they require no hardware purchases and no on-premises software deployments.
Now, as every business becomes digital, it can transform the supply chain by making services more valuable, accessible and affordable. Organisations should reimagine the supply chain as a digital supply network that unites physical flows of products and services and talent, information, and finance. Cloud computing is redefining traditional supply chain networks. Here’s why businesses should move to the cloud:
Enhanced responsiveness: Cloud computing facilitates enhanced responsiveness to supply chain disruptions, using better information and sophisticated analytics to interpret and react speedily to disruptions, including demand and supply signals. Swift repurposing of organisational assets at short notice helps to ensure that supplies always meet changing demands.
Connect in real-time: The flow of goods can now be managed with digital tools that leverage high volumes of data from multiple sources, connect resources (machines and humans) in real-time, and embrace social media to collaborate beyond organisation boundaries. By moving to the cloud, organisations can operate with increased flexibility and mass-customise their products and services.
End-to-end visibility: New technologies and service providers make it possible for companies to turn their supply chains into end-to-end business operating strategies. The connected cloud enables real-time collaboration that makes this possible.
Forecasting and planning: Every company wants to be able to forecast demand and supply to plan for production, and cloud computing helps by collecting and unifying information, data from customers, retailers, wholesalers and even the producers themselves. Some form of analytics can then be performed on the data in order to generate accurate forecasts and help companies to plan well.
Logistics: Cloud computing can help with logistics by providing tracking operations, automatic inventory management and transport route optimisation. The sharing and unification of data on the cloud can help various entities involved in logistics to plan effectively.
Maintenance: The management of spare parts and servicing can be improved with cloud computing — spare parts can be ordered at a minimum level of availability to prevent shortage, and servicing can be automatically determined utilising information on the cloud. thereby reducing downtime. RFiD can also be used to track inventory location to ensure accountability.
Sourcing and procurement: Cloud platforms can act as a master database that will contain all the information of suppliers. These platforms can also automatically order from the best supplier once a set minimum level is reached. The development of contracts automatically is another benefit of using cloud computing.
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Intelligence: Once the supply network is connected, it leverages analytics, cognitive equipment and smart apps to provide the right information for decision-making, at the right time. These intelligent technologies mean that supply chain managers can make proactive decisions “on the go”, while enabling set-up of rule based decisions for basic tasks. The intelligent supply chain advantages are:
- Actionable insights: innovative data analysis supports advanced decision-making
- Automated execution: seamless human-machine interaction increases operational efficiency
- Enhanced, accelerated innovation: digital inspires and supports creative advances in design, personnel, operations and customer relationships
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Improved Scalability: Whether you have an increased number of staff or customer base, cloud computing helps with scaling of supply chain operations, which is efficient and affordable. Also, plugging in different partners and suppliers as needed, companies can scale down their operations to target niche markets/segments/customers, and/or target newer markets. The scalable supply chain advantages are:
- Maximum efficiency: integration of people, process and technology
- Organisational flexibility: digital plug-and play enablers provide natural configure and reconfigure capabilities
- Personalised experiences: channel-centric supply networks help foster individualised products and services.
Security: Supply chain data is critical, so when organisations put their data in the cloud they need to be confident it will remain secure. For this to happen, cloud solutions must support best-in-class security features, such as encryption, virus scanning and whitelist support, and your data centre must offer embassy-grade physical and logical security.
Cost efficiency: Low upfront investments and subscription-based pricing are appealing to organisations because they negate the capital necessary for a large initial outlay, whereas more affordable upgrades and new capability rollouts make adapting to changes far less expensive than a huge IT overhaul.
Organisations are increasingly taking advantage of cloud solutions for specific activities such as network collaboration, back-office support, as well as transport and logistics management. Looking ahead, a number of key technologies enabling further innovation in the supply chain management application marketplace — from in-memory databases and powerful analytics to product lifecycle management solutions.
In today’s fast-paced, highly competitive global environment, companies need supply chains that are agile, savvy and adaptive. Customers, suppliers, and trading partners are demanding, they want information immediately and require the right products to arrive at the right location at the right time. Undoubtedly, this can best be accomplished in the cloud.
