How the Cloud Can Benefit Supply Chain Management

Cloud-based SCM is changing the industry

Organizations across all industries are reaping the rewards of the cloud, but one industry that hasn’t fully embraced the technology is supply chain management (SCM). Despite SCMs’ slower adoption rate, the cloud makes perfect sense for the industry: it enables supply chain professionals to easily track a product as it moves throughout its lifecycle, and effectively communicate with others in the supply chain if there is an issue or any sort of redirect required.

One reason for being behind the curve is the plethora of SCM systems already available, and currently in use. However, these systems simply cannot compete with the real-time accuracy and 360-degree management opportunities presented by cloud management solutions. And SCM professionals are beginning to take notice. According to the 2016 Supply Chain Software Trends and Opportunities Benchmark Report, the vast majority report that the cloud is definitely on the horizon:

  • 73.4% say the cloud is the future direction for all or some SCM applications
  • 18.3% say the cloud is the future direction for a small part of SCM applications
  • 8.3% say the cloud is unlikely to be a future direction

Here are 10 benefits driving forward-thinking SCM professionals toward the cloud.

1. Scalability. As a business grows, it needs IT systems that can grow with it. The cloud allows SCM professionals to scale without having to overhaul the system or purchase more compute power.

2. Speed. Implementing new software or integrating it with existing software is time-consuming and complicated. Many cloud providers can ramp up quickly, generally within 24 hours (depending on the amount of data).

3. Security. Supply chain cyberattacks were up 200% in 2017, with attackers injecting malware implants into the supply chain to infiltrate unsuspecting organizations. The cloud can offer heightened security by performing automatic backups and deploying patch management to reduce vulnerability. 

4. Uptime. Technical malfunctions can happen at any point within the supply chain, and downtime is expensive (the majority of enterprises estimating that downtime costs between $300,000 and $400,000 per hour). Not only can a reputable cloud provider usually limit downtime to mere minutes per year, the cloud also allows SCM professionals to easily see where the malfunction occurred to ensure it doesn’t happen again.

5. Flexibility. Cloud-based services keep the supply chain connected, enabling a more strategic approach for inventory deployment. Plus, cloud computing offers GeoAnalytics, enabling SCM professionals to monitor delivery networks, stop bottlenecks, and prioritize slower moving shipments.

6. Lower utility costs. Some SCM facilities are operating 24/7/365, and the costs add up (especially in warm-weather climates like Florida or California). Taking server equipment off-site can greatly lower electricity usage.

7. Accessibility. Physical systems come with limitations. Through the cloud, everyone from drivers to account managers can access all necessary information on any device. This makes it easier to conduct business in the event of an emergency or malfunction, even at three o’clock in the morning.

8. Communication. In a supply chain, communication is critical. The cloud allows everyone to communicate quickly and effectively for faster problem solving, no matter where they’re located or where they fit into the chain.

9. Competitiveness. The cloud enables small and medium-sized organizations to function with the same agility and transparency that previously only large organizations enjoyed. In the past, tasks such as problem shooting/solving could be extremely time-consuming for smaller businesses due to lack of manpower or resources—but the cloud gives them a fighting chance.

10. Disaster Recovery. Whether it’s a California quake or a Florida hurricane, weather can wreak havoc on a supply chain. With Disaster Recovery as a Service, or DRaaS, SCM organizations can gain access to data quickly even if there’s a disruption within the chain.

Ready to strengthen your supply chain? Partner with a cloud provider that can help you achieve your goals and the ten benefits above, plus more. Speak with an IT expert today!

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