What’s the true value of cloud for supply chain?
November 29, 2022
November 29, 2022
Rising costs, disrupted logistics, energy shortages and bottlenecks are placing huge pressure on supply chain networks. How can their leaders mitigate the effects of this inflation-disruption cycle? By leveraging cloud to boost supply chain resilience, flexibility and agility in the face of such challenging circumstances.
Overall, our 2022 research, “How the cloud boosts supply chain innovation", shows that 60% of cloud leaders are outperforming their competitors in supply chain transformation. More than half (53%) say that cloud is enabling them to achieve greater resiliency and sustainability. And 41% say that putting their supply chain in the cloud gives them greater visibility. In other words, the four key features I’ve outlined above are proving to be game-changers in the current environment.
Clouds bring agility...
It’s clear from our research and experience that cloud enabled supply chains are integral to achieving business goals that go beyond opex reduction. Crucially, cloud can create more resilient, flexible, agile and responsible supply chain operations.
A more integrated technology landscape creates greater business agility and more rapid decision-making. Microservices enable much faster, more focused software development and applications to address specific processes. These can provide a real advantage in “new age” industries with evolving operating models. Rather than having to invest in large platforms, companies can rapidly deploy solutions at the process level, all interconnected through open APIs.
Another way cloud supports resiliency? Enabling e-marketplaces that make the supplier ecosystem both more diverse and more easily accessible. As well as making it easy for users to place orders with suppliers, enhanced visibility means more accurate forecasting: 26% of cloud leaders cite cloud as key to demand forecast accuracy.
E-marketplaces benefit the entire supplier ecosystem. Vendors can showcase their products on the client website. And users have a wider choice of products. The whole infrastructure can be set up to provide visibility into specific groups of vendors, whether they’re small businesses or diversity-based organizations.
...and boosts sustainability
This helps to drive supply chain sustainability: e-marketplaces make it easy to set up an ecosystem that nurtures small businesses and connects them to customers that wouldn’t otherwise have been available to them. Because everyone’s data is in the cloud, it’s also possible to vet the entire supply network for risks and responsible business practices. Enabling one’s supply chain in cloud also helps reduce the overall CO2 impact and will result in energy savings for clients.
One example? We recently helped an APAC airline transform its source-to-contract process by shifting to a cloud-based platform. This cloud-based platform was integrated with their existing systems & was able to provide higher visibility into sourcing activities, contracts & supplier ecosystem – something which was not available to them earlier. Along with significant reduction in turnaround times, we were also able to implement real-time integration to supply chain risk management solutions and automated risk score calculation for suppliers. This helped the company manage risks proactively and responsibly – which has become extremely important post-Covid to minimise impacts to supply chain & reputation. The client was now able to make real-time decisions rapidly.
So how can supply chain leaders begin to realize the spectrum of benefits that cloud provides? They need to take a disciplined approach that’s precisely tailored to the unique needs of the business.
The first step is for supply chain professionals to truly understand the issues they face. That will determine the second key step: the choice of technology solutions to address those specific needs. Companies must then consider what investments they will need to change ways of working, and how best to upskill the workforce and engage with suppliers for implementation.
The way forward with cloud will be different for supply chain management in every company. But the benefits are proven and within reach. I’d love to hear your views, so please get in touch.
I would like to thank Amit Bhawsinghka and Punarvasu Khare for their contribution to this blog post.