6 Reasons your Supply Chain should be moving to the Cloud.
It’s hanging above us on a daily basis. The boundaries of its powers are still being tested. And, chances are, it’s going to (or already has begun to) change your business’ actions and strategies forever.
Not stratocumulus, cumulus, cirrus or altostratus.
I’m talking about cloud computing, but more specifically, cloud-based applications and solutions.
What is Cloud Computing?
“Cloud Computing [uses] resources as a utility, rather than building and maintaining computing infrastructure. Resources are present at a place and when required can be used to the demand. It is the large scale distributed computing where services are delivered to customers on demand over high-speed internet”. (Banerjee, Paul & Biswas 2016).
Solutions functioning within cloud-based frameworks compute on a common platform where all users that have permission to enter that particular cloud are computing in parallel. Cloud computing can be privatized or taken public.
Some of the world’s largest software vendors have been creating business solutions within the context of cloud computing since the early 2000’s. Today, it is accepted as one of the largest forms of technologically enhanced integration, sharing, and storage for business systems all over the globe.
Supply Chain Management: Moving to the Cloud
Businesses globally have realized the potential for applying cloud-based solutions into their supply chain strategies, and activities, to increase proficiency and profitability.
Today, a supply chain without a cloud-based solution — of some kind — in place would be considered an outlier from the norm. While cloud-based solutions have seen high levels of implementations into specific portions of the supply chain, others have been neglected.
The Cloud is built on a concept of a holistic platform; accessible by many to provide input and output - to breakdown silos, increase productivity and streamline communication.
If you’re not already taking the same holistic approach - to cloud-based integration - in your supply chain management, maybe you need that little extra nudge.
I’m happy to provide you with that nudge. :)
Here is: 6 Reasons your Supply Chain should already be in the Cloud.
Take a look at the Trends
Recent reports by P&S Research have projected the value of cloud-based SCM solutions to surpass $11B, by 2023.
“During the course of the analysis, P&S found that demand planning and forecasting is projected to witness the highest growth, with 20.3% CAGR during the forecast period, among all solutions in the cloud SCM market” (Henderson 2017).
Vendors and big business, alike, are racing to integrate the best technologies possible in order to stay ahead of competition. In the recent years, there has been a influx of cloud-based SCM solutions hitting the market or receiving massive funding for development.
Some solutions providers are building solutions focusing on the holistic approach, as mentioned early. Others are finding their niche by focusing on a particular vertical of the supply chain value chain.
The sharing and streamlined computing — that is possible when utilizing cloud-based supply chain solutions — makes for enhanced business agility.
A supplier audit is required and is completed in China, and the results are needed in Berlin — within the hour — to be able to make a deadline decision about continuing the supplier collaboration. The agility of this data compilation and sharing is crucial considering the supplier being audited was named in a child labor scandal, and the facts have yet to be confirmed. With a SCM solution, living in the cloud, this wouldn’t even be a pain point.
There are solutions on the market that would compile the data from an audit — within a cloud-based solution — and automatically share the auditor’s results with HQ. Taking data from the floor to the head office in the blink of an eye (Kodiak Rating 2017).
Cloud computing is a wonderfully integrable method of computing.
As stated previously, it holds strong potential for streamlined sharing, input and output of data sets amongst teams, individuals or cross-organizational. Moreover, cloud-computing solutions typically have capabilities to be ‘plugged in’. ‘Plugging in’ is simply the sourcing of data from one cloud to another.
This gives supply chain management professionals the opportunity to work from more robust platforms with a wider range of capabilities.
“The use of cloud technology enables multiple platforms to work with one another through a series of standardized protocols. Therefore, the previously existing digital boundaries between rapid communication and order fulfillment become nonexistent” (cerasis 2015).
Subsequently, cloud platforms resonate with higher trust and transparency amongst the parties utilizing a shared cloud.
Is your Inventory management, WMS, or TMS giving your supply chain managers a headache?
The cloud can alleviate some of your pain points.
Cloud technology provides capabilities such as real time inventory. Don’t worry about making a promise you can’t keep to a hopeful customer. Data sets of inventory can be managed at the palm of your hands, to ensure you’re never losing track of your inventory levels.
As far as WMS or TMS problems…
“The cloud’s ability to coordinate information with a specific solution can prevent any delays that might be caused by miscommunication or missed savings that might come from obfuscated data” (supplychain247.com 2013).
While operating within a shared cloud, the accessibility of data sets is a lot more scalable. Especially when businesses are operating globally, but need to keep lines of communication and/or are in collaboration.
Keeping multiple networks of individuals, or companies. under one cloud defies geographical boundaries; considering storage, sharing and communicating just require a WiFi connection.
This kind of scalability is crucial in operational procurement and sourcing teams.
“Within minutes, a supply chain management provider can extend the terms, or services, with the respective cloud host to account for the instant growth in capability. Furthermore, the use of cloud-based analytics allows businesses to isolate key inefficiencies within the order fulfillment process, which will further grow the respective business” (cerasis 2015).
That is business agility, at scale.
You saw the trends. If your supply chain isn’t on its way towards cloud-integration, you can bet your bottom dollar that your competitors’ supply chains are on the way there.
The capability of cloud-solutions has created competitiveness between organizations that couldn’t exist without such technology. Small and mid-sized organizations are able to function with the same agility and transparency that enterprise organizations are capable of.
Areas such as problem shooting, and solving, in these small and medium-sized companies can be time-consuming tasks. Without the proper amount of resources and manpower, a inventory mishap would effect a regional grocery store a lot more than WalMart. Luckily for the little guy, cloud-based solutions — which are within a reasonable price range — can give the underdog a fighting chance, without spending exorbitant amounts of time or money.
In enterprise competition, cloud-based solutions can help fight competitors by enhancing internal collaboration.
In a 2012 study by SCM World, comprising a community of the senior supply chain professionals from over 150 of some of the world’s largest companies, it was found that:
“46% of respondents report that greater supply chain collaboration leads to problems being solved twice as fast” (Columbus 2014). And this was back in 2012….
Cloud computing platforms have, as mentioned, provided a platform for more agile — silo breaking — collaboration and communication; even in the largest of enterprise companies.
I rest my case…
It’s a cloudy day to be a supply chain management professional. Are you ready to take a step outside?
Until next week.
This publication is brought to you by author Sam Jenks, but also on part by Kodiak Rating — A Supplier Relationship Management SaaS functioning out of Stockholm, Sweden. Kodiak Community intends to challenge traditional business practices with innovative thinking and creation.