Supply chain, by definition, involves various trading partners within a network that facilitate the flow of goods and information. All of these parties can be — and often are — geographically dispersed and part of different organizations. In order to facilitate a truly collaborative and interconnected supply chain, cloud computing is a natural choice.
Further evidence of how cloud computing improves supply chain collaboration and performance was outlined in a recent study authored by industry group SCM World titled “Supply Chain and the Future of Applications.” The findings revealed, for example, that 46% of respondents report that greater supply chain collaboration leads to problems being solved twice as fast. The report went on to note that, “Cloud computing platforms are becoming more pervasive in large-scale supply chains as enterprises look to gain agility and speed in resolving complex problems through more effective collaboration.”
Cloud computing plays a significant role in helping to address many of supply chain's core challenges beyond collaboration. Some of those include ensuring a deep level of visibility of goods in-transit, maintaining consistent, real-time information sharing amongst global partners and automating more components of the supply chain, among others. Let's take a closer look at each of these.
Visibility of goods in-transit
Using supply chain processes hosted in the cloud, the visibility of the goods transferred can be shared across the entire supply network. This helps to pinpoint exact arrival time of goods, for example, thus helping to better organize the delivery process. As I discussed in a previous EBN article, IoT & the Age of SCM 2.0 Enhances Supply Chain , the logistics ecosystem has many moving parts. Products are handled and transferred between the manufacturer, suppliers, the distribution center, retailer, and customer. With this many touch-points within the supply chain, a deep level of visibility into in-transit goods is needed in order inform those involved about the product's whereabouts, potential need for re-routing and other specifications that ensure the smooth and safe flow of goods.
Real-time information sharing with global partners
Cloud supply chain facilities an information sharing network that's more like a social media website for business than a clunky, enterprise communications platform. Through the cloud, supply partners are able to update statuses related to products, shipments, route closures, factory issues, etc. in real-time to the entire network via a single status update. The level of information sharing and the ease by which intelligence can be dispersed has become truly remarkable with cloud computing.
Heavier use of automation
Supply chain automation through the cloud delivers increased efficiency, reliability, and responsiveness. Supply chain automation does away with reliance on paper documents for things like order confirmations, payment processing, product and delivery status updates and more. This also eliminates the margin of error when fewer hands are involved in various supply chain processes. Electronic interactions through supply chain automation ease the pain of manual-heavy processes that are cumbersome and error-prone.
The global supply chain execution market is expected to reach approximately $3.8 billion by 2016, according to a Gartner report. However, growing technology complexity poses a potential barrier to growth. Cloud computing helps to remedy many of the complexities involved in the smooth operations of a global supply chain by providing a deeper level of visibility into in-transit goods, real-time information sharing across the many dispersed parties along the chain and facilitating more adoption of automation, among other benefits. These things alone ease many of the main challenges of supply chain collaboration and execution, making for more streamlined, cost effective, and less risk adverse operations.