Cloud Supply Chain Management: Benefits of Cloud Computing in SCM

Supply chain management is an integral part of any business, as it enables management to achieve the highest level of customer satisfaction and strong profitability. Modern technologies have enriched the tools and platforms of supply chain management vastly in the last decade. Cloud supply chain management (SCM) is the most significant of them. 

This article discusses and explains what is cloud supply chain management and the unique benefits of cloud computing in supply chain management. 

What is a Cloud Supply Chain?

A cloud supply chain is a fully or semi-automated network of resources, business processes and activities augmented with cloud computing tools, platforms and infrastructure. Fundamentally, a cloud supply chain is like a conventional supply chain, but with real-time visibility over the supply processes, agility, minimal downtime, strong security measures and 24/7 data-backed decision-making capabilities. 

Example: 

Let us understand the cloud supply chain in comparison with the conventional supply chain through an example of a retailer with a chain of stores. 

1. In conventional format, store managers collect sales data tally sales data with the store inventory, analyse sales patterns and place orders for restocking goods based on periodic sales projections. 
2. Business data is stored in the on-premise computer system.  
3. It is the responsibility of the manager to share business reports at pre-specified or regular intervals with the head office over email. 
4. Once received, the head office checks the reports from store managers, approves orders, and makes suggestions or other business decisions.    

Cloud supply chain automates the process of in-store data collection, uploads collected data to the cloud for real-time access across the organisation and allows running various business analysis tools on the data for better business intelligence and decision-making. 

The typical examples of cloud supply chains are the modern supply networks in the following industries: 

• Retail e-commerce companies 
• Online marketplaces 
• Logistics businesses 
• Financial services 
• Media and entertainment  
• Telecommunication 

Based on industries, tools and processes of data collection, storage, and retrieval may vary. However, the basic principle of the cloud supply chain remains similar. It brings us to the question of how to manage such a supply chain. Is it different from how conventional supply chains get managed? 

What is Cloud Supply Chain Management?

Supply chain management involves coordination, supervision, and decision-making regarding the flow of goods or services or both from the stages of sourcing to the last-mile delivery and customer servicing with the highest level of quality and efficiency at every touchpoint. 

Cloud supply chain management takes care of everything that a conventional supply chain management strategy wants to achieve, however, with unprecedented real-time visibility, agility, and scalability that cloud computing tech offers. 

So, we can say that cloud supply chain management is a technology suite combining hardware, applications, platforms and tools to efficiently plan, procure, produce, distribute and ensure the best customer experience.  

With global penetration of connected smart devices, round-the-clock shopping sprees, social media-driven rapidly changing customer expectations and demand for instant delivery, the benefits of cloud supply chain management are undeniable for any company. 

Benefits of Cloud Computing in Supply Chain Management

• Real-time visibility over the processes 
• Seamless communication and collaboration with partners
• Unprecedented flexibility and scalability 
• Data-backed decision making 
• Better risk awareness and mitigation 
• Operational sustainability and cost-saving 
• Improved customer experience 

Real-time visibility over the processes 

Cloud computing technologies automate data collection, storage, and retrieval from business processes like procurement, inventory handling, manufacturing, and delivery. As the data is stored in the cloud in real time, anyone with access can instantly have a complete picture of the business. Zero human intervention also allows complete transparency.  

Seamless communication and collaboration with partners

Collaboration with suppliers, vendors, dealers, distributors and other business partners is critical for the success of any supply chain. Cloud computing tools, like electronic data interchange (EDI) and vendor-managed inventory (VMI), enable automating communications and reporting between partners, cutting down the chances of delays or inaccurate communications. 

Unprecedented flexibility and scalability  

Instead of relying on long-term plans and commitments, companies prefer facilities of on-demand resources and capacity utilisation. Cloud computing technologies afford instant rollback of capacity utilisation and quick expansion as well. 

Data-backed decision making 

Cloud-based supply chain technologies automate the extraction, transformation, and loading of business data in real-time. The data gets stored in remotely accessible cloud storage, enabling companies to run business analytics tools, gather actionable business intelligence and make decisions based on predictive analytics. 

Better risk awareness and mitigation 

Cloud computing enables supply chain managers to monitor business processes 24/7 in real time and perform a range of data analytics to predict process disruptions. Storage of crucial business data in the cloud saves companies from operational paralysis in decision-making, in case of calamities or disasters.   

Operational sustainability and cost-saving 

Real-time and transparent visibility of business processes helps companies achieve better resource utilisation, avoid wastages and ensure effective utilisation of energy. This not only saves costs but also helps companies make their operation more environment friendly. 

Improved customer experience 

Finally, the ultimate aim of SCM is to ensure the best customer experience. Even the best quality goods and services may not impress customers when the order processing and delivery experience is not up to the expectations. Cloud computing technologies streamline order processing, enable faster deliveries, real-time tracking and delivery updates to customers. 

Use Cases of Cloud Computing in Supply Chain

Some of the common use cases of cloud computing technologies in supply chains across different industries are: 

Challenges of Cloud Supply Chain Management

• Data security and data ownership 
• Vendor lock-in 
• Change management 
• Suppliers and partners issues 
• Fixed costs and upfront investments 

Data security and data ownership - Data security is a serious concern among companies leveraging cloud SCMs, especially in a world where cybercrimes are becoming an everyday incident. Besides, new stricter legislation on data privacy is raising questions about data ownership. 

Vendor lock-in - Cloud SCM technology vendors sometimes impose a lock-in period before which their customers cannot cancel their services. It creates an unnecessary burden for companies and raises the question about data migration from one vendor to another. 

Change management - Implementing cloud SCM in any enterprise requires significant training and change management across the board. People who are used to legacy systems often resist new technologies. 

Suppliers and partners issues - Real-time visibility of the supply chain depends on the readiness of partners and suppliers to adopt new SCM tools and share electronic data. If partners are unwilling, it may become difficult to implement cloud SCM effectively in the system. 

Fixed costs and upfront investments - Despite the flexibility and immense scalability of cloud services, cost overrun is not uncommon, especially when the SCM tools and platforms are not optimally managed or supervised.  

How does the Clear Supply Chain cloud Optimise the Supply Chain? 

Clear Supply Chain Cloud is the top global supply network management solution that unlocks values in the business process through effortless vendor management, starting from onboarding to financing. 

Some of the salient features of the Clear Supply Chain Cloud are: 

• Easy KYB processing for effortless vendor onboarding 
• Instant digitisation, tracking and payments without errors 
• 40+ checks for error-less invoice validation and AP processing 
• Actionable business intelligence for vendor financing and improved cash flow