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Cloud Computing – How It Helps SCM

2 Mins read

Cloud storage has been around for 20 years, but supply chain management (SCM) companies started migrating on a large scale only during the last 5-6 years. Service oriented architecture and cloud platforms now define how modern supply chains work. The shift has helped manufacturers and their value chain partners to increase their footprint based on improved visibility (market and inventory).

One of the benefits of using cloud is the ability to track products through their lifecycles. Two or more partners can share a common repository, and with digitization, organizations can work towards a digital, unified supply chain. It is an approach that eliminates many costs and all the contentions regarding flow of products, services, and finance.

Cloud Computing – How It Helps SCM

Common IT problems in supply chain and procurement

Companies in extended supply chains have multiple product and service segments. Each of them has their outlets and inventories, which burden IT with piles of data to store, process, and communicate with all the stakeholders.

Any form of dynamism in data, such as cost updates, contract modifications, and changes in shipment status, makes them prone to errors. Other problems like maintenance downtime, breach of security, natural and man-made disasters also put companies at risk.

Advantages of cloud-enabled digital supply networks

  1. Connectivity: Cloud provides supply chain stakeholders a common platform to improve real-time ability. Using such a platform is also a way to keep the stakeholders sufficiently informed and prevent misunderstandings.
  2. Immediacy: Updates for on-premise or standalone IT systems can be time consuming to implement, but with cloud, application service providers can implement updates with offshore agile development. Newly required functions can be incorporated easily and it causes zero downtime.
  3. Visibility: Cloud-based supply chain systems provide companies a full view of supply and inventory needs. Budgets can be updated instantly while stakeholders can view the changes in real time. Visibility also prevents sales teams from making false promises occasionally.
  4. Intelligence: Choosing cloud for storing a company’s vital information helps it build analytical and cognitive capabilities. It is a matter of competitive advantage when it comes to making the right decisions.
  5. Scalability: To add new suppliers, procurement units and other partners, cloud systems allow organizations to scale without having to overhaul or wait. Companies can target new markets and quickly optimize the number of resources required by using cloud-based applications.
  6. Supplier onboarding: Verifications required for supplier onboarding can take months with traditional IT. But with cloud services, authenticating new associations becomes much easier, enabling an intricate process to complete within a short turnaround.
  7. Speed and flexibility: Cloud services give companies an edge when it comes to monitoring delivery networks, automating tasks, and prioritizing shipments. Those may be done with the help of geoanalytics and user-friendly dashboards.
  8. Efficiency: A cloud-based service can cover a company’s IT needs without forcing it to incur much cost. There are various SCM applications being made available by existing cloud-computing services to reduce dependency on expensive storage and manpower.

Cloud services enable companies to use information, make quick decisions, and communicate effectively. What’s more important is that cloud applications prevent controversial scenarios and trust issues between supply chain partners. For a direct impact on business, cloud does its job by enabling the management with 360-degree control of processes.

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