Cloud Computing and Supply Chain Management: An Overview
Supply chain management plays an important role in the business growth of any industry. Nowadays, businesses are not competing, it’s the supply chains that are competing. It is the reason companies are now shifting their focus on transforming supply chain management through technological advancements.
Cloud computing is one such evolving technology that businesses are continuously adapting to enhance overall efficiency. Cloud computing induces a large scale transformation in the traditional supply chain, making it more innovative and dynamic.
Employing cloud-based technology in supply chain management provides numerous advantages such as simplified operations, real-time visibility, sustainability, capital investment savings and so on. Let’s discover how cloud computing is revolutionizing supply chain management.
But, before going further let us understand the basics of cloud computing.
Cloud Computing: Introduction
Cloud computing is an information technology (IT) model where computing services (software and hardware) are delivered on-demand to customers through the internet with pay-as-you-go pricing.
Types of Cloud Computing:
- Public Cloud
- Private Cloud
- Hybrid Cloud
- Community Cloud
Best Ways Cloud Computing is Revolutionizing Supply Chain Management
1.) Improves Manufacturing Cycle Times:
Manufacturing cycle times measures the time taken for its accomplishment. It informs when an order is taken, the product is produced and entered into inventory.
Now, improving manufacturing cycle times starts with knowing where the actual delay is happening in the manufacturing process. Cloud computing improves manufacturing cycle times by providing real-time updates on the impact of production performance on financial results.
2.) Helps Attain Real-time Track and Traceability Performance:
If a manufacturer has more production locations, the supply chain visibility becomes more important to maintain quality levels, easily track and trace data. Cloud computing applications across supplier networks save manufacturers from unpredictable expenses of a product recall. Cloud-based applications will do this by identifying the problems at an early stage.
3.) Real-time Updates on Inbound Shipment Inspection:
Imagine you get a 360-degree view of every aspect of quality from inbound inspection to a finished product. Obviously, it will be a lot beneficial for the company as it will reduce cost and increase customer satisfaction.
Cloud-based supply chain management track, analyze and report quality levels by production center and customer. It also has the capability to track and trace component or any assembly throughout the supply chain in real-time.
4.) Increases Cost-efficiency:
Cloud computing systems are generally offered by external providers. Thus, it does not require any investment for software, which makes it beneficial for supply chain management in terms of financial advantage.
Now, this capital costs for supply chain management can be converted into an operational cost. It will further enhance the company’s cash flow.
Cloud-based supply chain management helps companies to save money by minimizing maintenance and upgrading costs.
5.) Offers Scalability:
Cloud computing can help supply chain stakeholders to control their system capacity more accurately. In times of high demands, companies need enough capacity to fulfill their customer orders.
Now, if the company is using on-premise systems, they should have the necessary database for the whole year to respond to the excessive demand for just a short time.
However, cloud computing has given companies an opportunity to adjust their capacities according to their needs.
6.) Offers Simplification:
Cloud computing is very much known for the simplification it provides. Now, with cloud-based systems, the supply chain is easily accessible through the same platform thus removing compatibility problems and allowing supply chain information sharing among partners in a single system.
Cloud-based services provide information control through a single centralized storage system, thus ensuring a smooth flow of information among supply chain partners.
Cloud computing is very much effective in the field of supply chain management. It facilitates collaboration among supply chain stakeholders through the integration of supply chain activities.
Therefore, now its time to adopt the new collaborative thinking in supply chain management and enjoy the numerous benefits it offers such as real-time visibility, flexibility, and sustainability.