Benefits and challenges of cloud-based solutions in supply chain management
In recent years, cloud-based technologies have completely reimagined supply chains on a global scale, having a lasting effect on everyone from your CEOs to the end customer. While the birth of the cloud came with some challenges, it has become much more scalable over the last few years. More companies every day are turning to cloud-based applications to streamline everything from order management, transport and shipping, end-to-end visibility, administrative processes and more. The cloud’s main objective is to ensure everything in your supply chain works in harmony; a reality supply chain leaders have been striving to see for decades. While incredibly exciting, with such a goal comes challenges. Let’s explore them together, along with the benefits you can realize when doing it correctly as well.
What is the cloud-based supply chain?
In the supply chain, the cloud centralizes an ‘online’ space for data to exist, and offers multiple entities access to that data, decreasing costs and increasing supply chain velocity while adding data security. What makes the cloud special is the way it reimagines and optimizes one’s supply chain network. By enabling solid IT infrastructure, access to visibility platforms and software solutions that drive sales growth, the cloud ultimately increases your efficiency, minimizes internal and external risk, and deepens operational resilience.
Why your supply chain should be in the cloud
Many supply chain leaders are eager to integrate the cloud into their organization, hearing all the benefits it has to offer. Let’s further understand what this can look like in your supply chain.
Reduced operational cost. A key benefit of shifting to cloud is how cost effective it can truly be. The cloud virtually eliminates the need for the costly setup and maintenance of segregated softwares to do one job. Rather than purchasing various tools and equipment, you have your cost centralized under one provider instead of multiple channels that are difficult to keep track of.
Improved efficiency. Efficiency is a main pillar in the world of cloud-based solutions. It allows for a much more streamlined decision-making process based on accurate and up to date data and analytics. This efficiency spans across multiple locations and partners, ensuring end to end communication so that everything is constantly accounted for, and operations are optimized.
Increased scalability. In an increasingly volatile market, companies often believe using multiple softwares and tools is the best solution in an attempt to keep up. This can often make for a costly, unorganized supply chain, having multiple streams of data flowing to and from each provider. Alternatively, cloud-based solutions allow for coordination of all necessary data across your supply chain, with a lower price tag in the long run.
Newfound visibility. To run a successful supply chain, you need true end-to-end visibility, as you simply can’t manage what you can’t see. The most integral part of a cloud-based solution is the constant real time data that is updated at every second of every day for your supply chain. In turn, this fosters an increase in information transparency, allowing for more control over internal and external relationships.
Common challenges companies face when moving their supply chain operations into the cloud
While the cloud comes with the above-mentioned benefits, there are some challenges that can potentially arise. It’s imperative that you understand what these challenges look like and how to mitigate them, so they don’t hurt your supply chain in the process.
Security and privacy. Security and privacy are vital for any supply chain, and many organizations have found risk in incorporating a cloud-based solution that upholds these key factors. Managing a supply chain’s security and privacy has been one of the cloud’s biggest issues to date, but by utilizing encryption, and taking the necessary security applications, you can ensure your supply chain’s safety.
Not choosing the right provider. Choosing the right provider when making the shift to the cloud can sound like a daunting task. So much goes into customizing the software or tool to fit your every need, so how can you know which provider is truly right for you? Ultimately, you must do proper research. Find companies that yield results and partner with you every step of the way. You want to see that these providers have safety measures in place and know how to plan for the future; not only to satisfy your current needs but set your supply chain up for lasting success.
Complex applications and a lack of understanding. Ultimately, your supply chain runs on people. Therefore, you must ensure any technology, software or tool you plan on integrating works for your organization. Not only should the functions be easy to follow and integrate, but your vendor should also work with you and your employees to ensure complete understanding of the application. Not only that but instilling a new mindset in your organization is key in this process. You don’t want your organization to lose focus or momentum, and a provider that fosters a healthy culture where everyone is familiar and integrated with the new technology and all its applications is key.
With the onslaught of disruptions and stressors in world of supply chains, it can be difficult to know what to do to ensure your supply chain runs to the best of its ability. Companies are continuing to work towards finding solutions that them their specific needs, and that includes choosing an option that not only protects your supply chain now but also sets you up for future success. While there will always be challenges when implementing a new tool, the goal of building a resilient, cost effective, optimized supply chain is never out of reach.