History has taught supply chain management organizations one common factor: failure to adjust to societal changes will donate to business-downfall. In the modern, digital world, the impact of the cloud can be felt in every facet of existence, not just commerce. Cloud computing technology has allowed supply chain management providers to take improvement of a new era of processes, exclusively those relating to the ethereal space. Traditionally, supply chain management has relied on physical, in-person processes. Take a look at how cloud computing technology impacts supply chain management concepts.
Previously, analysis of data congregation required both a data entry clerk and a person to conduct data analysis. The cloud, in conjunction with the Internet of Things, has enabled rapid collection of data from various resources and analysis of this data. As a result, businesses can eradicate these former “human” positions in favor a service that performs the same results one an exponentially faster scale. Ultimately, this allows the business to make better decisions for how daily activities behave.
As more businesses have accessed supply chain management providers, a great deal of platforms have been created to facilitate this change. Unfortunately, many of these platforms do not coexist well with one another. The use of cloud technology enables multiple platforms to work with one another through a series of unvarying protocols. Therefore, the previously existing digital boundaries between rapid communication and order fulfillment become nonexistent. An example of such binding technology is FlashTrac, Flash Global's proprietary supply chain management integration system.
In close relation to integration of systems, cloud technologies remove physical and political boundaries from the supply chain management perspective. Since many cloud hosts rely on common practices for accessing, storage, and retrieval of cloud data, the same information may be altered from any place on the globe. Furthermore, cloud technology allows for the dissolution of political debates between business practices; although, the rules of governing entities may have the capacity to limit Internet access, such as was seen in Egypt in past years.
Since cloud hosts have to abide by strict government and public perception standards for maintaining privacy, such as medical and financial data, cloud technology brings state-of-the-art security measures and practices to the forefront of supply chain management. Interconnectedness allows for massive security monitoring and implementation across all cloud-based digital planes while still maintaining communication and enhancing the flow of business practices.
Agreements with cloud providers allow supply chain management providers to eradicate the need for extensive in-house IT departments; although, some minimal in-house IT departments are usually retained for in-house physical IT needs. When in the business of using digital resources, such as those used for e-commerce, a business needs to ensure customers can resolve problems with their system at almost any time. Therefore, most cloud hosts offer 24/7 support for those using their services, which can be rerouted to correcting issues with your customers without your input if you prefer.
US manufacturing is no stranger to the damaging effects of market volatility. Less than a decade ago, the US saw the worst economic collapse since the Great Depression, and supply chain management providers must always be wary of how resources will be used in the event of a collapse. The use of cloud technology provides a buffer against market volatility. Essentially, partnerships between a supply chain management provider and a cloud host are subject to renegotiation, or even cancelation, if the market suddenly declines. As a result, the supply chain entity is able to minimize associated costs with the collapse and maintain service at competitive rates.
Since cloud technology insulates supply chain management providers from market volatility, it can also be used to achieve rapid scalability. As a budding business begins to experience higher demand for product, the respective supply chain management provider may need to increase production by factors of five, 10, or more. With each supplementary order comes the strain of extra bandwidth and processing capability, which cloud technology provides. 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.
The greatest benefit of cloud technology on supply chain management providers is reduced operational costs. Throughout the supply chain, cloud technology can reduce the amount of workers needed to perform specific tasks. For example, the cloud could be used to automatically generate a report of needed product at a specific warehouse, trigger the respective shipment, and account for the product when received at the destination. As a result of minimizing human-input within the order processing, those employees may be then reassigned to other physical aspects of the supply chain. Additionally, supply chain management providers reap the benefits of lower security, IT, data analysis, and more.
As society becomes more dependent on the cloud, more supply chain management providers will come to recognize the role of the cloud in today’s supply chain. When comparing traditional supply chain benefits and processes to the last benefit of cost reduction alone, the lower cost of using cloud technology could easily make up for any potential problem encountered within traditional supply chain management processes.