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Supply Chain & Operations

How the cloud boosts supply chain innovation

June 10, 2022 5-MINUTE READ

Today, all eyes are on supply chain management. Supply chain leaders must figure out how to deal with changing demand and disruptions. COVID-19 taught us we can’t just optimize for the new normal. In fact, in new Accenture research on supply chain and the cloud, 53% of supply chain executives said the pandemic made them rethink their overall supply chain. That’s why companies are using the cloud to help them move beyond their current supply chains. Leading companies see the cloud not as a destination. They see it as a continuum of capabilities that can help them create powerful new operating models.

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With the cloud, leaders are reimagining, building, and operating new supply networks. These networks orchestrate change. They deliver outstanding customer experiences. And they positively impact business, society, and the planet.

What’s the true value of the cloud?

Many people still mainly think the supply chain cloud provides cost savings, which it does. Saving money is the top reason companies in our research gave for migrating their supply chains to the cloud. But cost savings are just the beginning.

The cloud drives speed, agility, scale and visibility. The cloud helps companies quickly adjust computing resources. It helps them reduce the time and cost to develop and deploy new applications. It integrates companies with a new world of players. And it provides visibility to make faster and more-informed decisions. As a result, companies can anticipate and predict market changes and risks across the supply network. They also can design, make and deliver personalized products and services to boost customer loyalty.

The cloud also enables supply chain innovation. The major cloud providers invest billions of dollars in new features every year. This gives companies affordable, unrestricted access to cutting-edge technologies and capabilities. So, companies can connect data with a digital thread across the value chain. This digital thread enables new ways of working. It also provides continuous innovation for operating models, products and business outcomes. The proof: Cloud leaders in our research were more likely to say they’ve outperformed competitors in supply chain innovation.

Finally, the cloud helps drive responsibility and sustainability across supply networks. It helps companies use emerging technologies to reduce the supply network’s environmental footprint, improve resource efficiency, increase regulatory compliance and improve risk mitigation. With the cloud, companies can manage business performance and decisions based on a balanced view. They can consider growth, profitability, sustainability, and diversity at the same time.

Research insights

Our survey of 1,050 supply chain executives around the world uncovered intriguing insights into how companies are using the cloud in their supply chains and the benefits they’re getting. Some highlights:

21% of supply chain executives have deployed cloud-enabled capabilities across their entire supply chain. 97% of these “cloud leaders” have at least 3/4 of their supply chains running in the cloud.

41% of all executives said the desire to increase supply chain efficiency was a top-three reason for migrating their supply chains to the cloud.

Executives on average attributed their cloud use to a 26% increase in demand forecast accuracy, 16% reduction in supply chain operating costs and a 5% increase in revenue growth and profitability.

About half of executives surveyed said the cloud has helped them successfully increase resiliency (52%) and sustainability (48%).

Cloud leaders will continue to invest more in cloud technologies than their peers over the next two years.

The importance of data

The best-run supply chains use data more effectively to make decisions that optimize for the customer, society and the planet – and they do this in a resilient and profitable manner.

Cloud providers help companies address supply chain disruptions and sustainability goals by releasing the power of data and putting this data in the hands of a digitally skilled supply chain workforce. To be more resilient, a supply chain must improve both supply and demand side visibility. To achieve a more sustainable supply chain, companies need to understand the current supply chain situation and make actionable decisions that meet sustainability goals.

The benefit of cloud solutions such as Microsoft’s Supply Chain Platform is enabling companies to compete with information by orchestrating diverse data from across best-of-breed solutions and throughout their supply chain network to create a competitive supply chain that is both sustainable and resilient.

Move forward confidently in the cloud.

Creating a cloud-based supply network is an ambitious effort. It requires a structured, disciplined approach. This approach, and the starting point, will be different for every company. Supply chain leaders need to know where their organization currently stands on the cloud maturity spectrum and what they must do to advance.

The world faces ongoing challenges and supply chain disruption. All companies have to figure out how to respond so they can thrive in this reality. Success will depend on building a robust, agile cloud-based supply network. This network can help companies excel in key areas: Meeting fluctuating demand. Building resilience. Managing costs. Delivering personalized, superior customer experiences. And fostering greater responsibility for society and the environment.

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This article was originally published on May 6, 2021, and was updated with new information on June 10, 2022.

Frequently asked questions

Cloud technologies give you extra power and scalability. That means you can process truly vast amounts of data, from a huge range of different sources. It means you can scale operations up and down at a speed that was previously unthinkable. Not only that, but cloud gives you faster access to the latest analytical technologies, including artificial intelligence and machine learning. That allows you to gather, process, understand, and react to data from across your supply chain in close to real time.

Cloud infrastructure is typically more cost-effective. That enables you to drive up efficiency right across the supply chain. But it also drives speed, agility, and scale. That allows your business to do entirely new things, such as integrating systems with suppliers to get end-to-end visibility across the supply chain. Cloud also enables faster innovation because it gives you access to cutting-edge cloud services from some of the world’s most innovative companies. It can also support greater responsibility, such as monitoring environmental impact and ethical practices throughout the supply chain.

Yes. In fact, cloud supports a digital transformation in everything from engineering and planning to procurement and manufacturing to fulfilment and customer service. It enables you to build a supply chain that is more interconnected, more intelligent and more automated. And that transforms your supply chain’s ability to support business innovation. To do this, you need all supply chain functions to not only embrace cloud, but also collaborate to integrate data, enhance resilience, and improve customer experience.

Transforming a supply chain in the cloud requires a disciplined and structured approach tailored to the unique needs of your business. The first step is to assess your current cloud maturity. That will determine whether you need to start by defining your objectives and integrating your data, or whether you’re ready to start industrializing processes and driving up automation. You also need to consider what investments are needed to change ways of working and upskill your workforce.

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