Flexible, secure and efficient: Key advantages of cloud use in SCM
Whether supply chain legislation, climate goals or bottlenecks in supply: When it comes to their supply chain management (SCM), companies increasingly require control, transparency and agility. Without a digital infrastructure, however, the complex processes involving a large number of stakeholders cannot be adequately monitored. Unfortunately, small and medium-sized companies in particular often lack the internal structures and sufficient capacities to achieve just that. One of the most important tools to benefit from the opportunities of digitalization, to gain control and to increase your own performance is cloud technology. We explain how cloud computing makes the supply chain more resilient and future-ready.
Transparency needs digital solutions
Transparency has become a key factor in the past two years. Be it compliance guidelines, sustainability goals, minimizing risks in the movement of goods or IT security: it is becoming increasingly clear that transparent processes and a high supply chain visibility play a crucial role in controlling and securing the entire supply chain. In this context, cloud solutions can provide valuable support in order to achieve end-to-end supply chain monitoring: From order processing and supplier capacities to alerts for critical status changes, companies receive a detailed overview of all processes in real time. Further, the susceptibility to errors is also significantly reduced compared to status recording in Excel lists.
The benefits of cloud-based applications in supply chain management
There is a variety of software products available on the market that have been designed to achieve those goals. However, implementing in-house solutions is often cost-intensive, ties up human resources, and requires a deep reengineering of the internal IT infrastructure. In addition, it requires a very high level of cooperation from other companies in the supply chain that need to be connected – after all, optimal control and data evaluation can only be achieved through collaboration in the supply chain. These transformation processes are made much more convenient by the use of cloud-based SCM software. If possible and desired, stakeholders are integrated into the SCM platform directly via an interface.
Efficiency and convenience through decentralized solutions
The control of supply chain processes on cloud platforms offers decisive advantages due to the time and location-independent access. Particularly through the use of real-time data, the supply chain can be monitored in detail and, if necessary, adapted to changes and new requirements – for example, in the event of disruptions in transit, severe weather phenomena, container blockages at the port of destination, or bottlenecks in air freight capacities. Companies can quickly identify such bottlenecks and risks and swiftly switch to alternatives. Costs arising from delays, breakdowns or long container stays at the port can thus be avoided.
Cloud benefits for SCM visibility, resilience and security:
Networking:
All the data that companies, suppliers and customers exchange electronically is brought together centrally. This enables the continuous monitoring or control of processes. A major advantage is the decentralized access of all authorized persons to procurement, transport and warehouse data. Thanks to mobile applications, even employees in the warehouse or in production can access information. Cloud solutions are particularly useful when a large number of stakeholders with very different IT infrastructures are to be connected.
Scalability
The cloud offers almost unlimited storage capacity and large computing power. For example, if a company needs more computing power, storage space or other digital resources for its own applications, cloud applications allow an easily and quickly scalable solution. Instead of having to set up and manage in-house server centers, companies can get access to the services they need via the cloud. In addition, there is no need to hire in-house specialists to look after the IT systems in use, as the service provider, who has the necessary expertise, takes care of maintenance and smooth operations.
IT security:
The increasing complexity of supply chains also raises the risk of cybercrime. The data of customers and employees is particularly at risk. The results of the 16th Hermes Barometer on the topic of “IT and data security in the supply chain” show that more than half of the respondents (51 percent) consider hacker attacks and computer viruses to be the greatest threat to their supply chain. Thirteen percent of the companies surveyed have already experienced disruptions due to IT security incidents. This is where cloud-based SCM software can help implement efficient supply chain risk management. A defined authorization concept also ensures a high security standard – thus only the data that is necessary for the participants in the respective section or process of the supply chain is shared.
Cost reduction:
According studies at this point the strongly increased cost pressure is the key priority for 72 percent of the 216 participants*. Here, too, cloud computing can be beneficial. After all, a high level of networking, real-time data and improved forecasts reduce risks and make it easier to plan transport routes, container service times and storage capacities. Added to this is the reduction in personnel costs: since the maintenance of the systems is taken over by the external service provider, fewer internal specialists are required. Further, a cost-efficient testing of new software and new business models is possible thanks to the use of the cloud. This also increases the willingness to innovate, as more capacities can be freed up for this purpose.
In summary, it can be concluded that the use of cloud-based SCM platforms offers companies advantages in precisely those areas that are crucial to success in times of increased risk. SMEs in particular benefit from the combination of cloud-based solutions in the steering of logistics and supply chain management. When cooperating with a logistics service provider, companies are well advised to pay attention to their expertise in the area of digitally supported supply chain solutions. Experienced service providers can support their customers in optimizing processes and integrating digital products, train employees, and thus contribute to a holistic, efficient transformation of supply chain management.