Adoption of Cloud Computing in Logistic and Supply Chain

Cloud computing is one of the most disruptive technologies of the modern era. If we take a look at its impact, we can see that this industry is already over $146 billion. Furthermore, the industry growth rate is exceptional as well, with an average growth rate of 17%.

The supply chain industry needs a flexible information technology system to manage its information, and cloud computing technology provides that to them. It helps them gain operational benefits and save costs, which is extremely important in today’s competitive market.

Why is it incredibly relevant for supply chain industry players to adopt cloud computing technology?

Here are some of the reasons why the companies in the supply chain and logistics industry must consider cloud computing technology:

  • The threat of new competitors is prominent with information technology, making it easier to enter the market.
  • The expectations of modern customers are quite high, and they expect the service to be as quick as possible.
  • There is always a need for change in management. The traditional information system is rigid and takes a lot of time and money. Cloud computing technologies make it easier to change the management and operational procedures without spending much time and money.
  • The process management is made simpler with cloud computing technologies with fewer visibility barriers and enough real-time data to make the operational decision quickly. It also makes it easier to scale the business with minimal waste of time and less cost.

Despite all the benefits, the loss of data and security is the primary concern for companies, which are stopping companies from moving to the cloud entirely.

But, the keen interest in cloud technologies will make companies gradually move to cloud technologies. Cloud technologies allow companies to quickly adopt emerging technologies like augmented reality, advanced mobile apps, and advanced analytics.

What processes intensively require cloud computing technologies?

Plenty of operations take place in a supply chain organization. It is, however, not essential to migrate all services to the cloud at once. Here are some of the most critical processes that require cloud computing technologies:

Planning and Prediction: There are plenty of cloud applications now that are available for extracting deep insights from essential data to predict future demand and more. It also allows managers to find out loopholes in the operations for correcting. There are also sole supply chain management apps that will enable you to do specific planning, pricing, promotion, and more.

Logistics: The cloud-based analytics and applications can help in providing essential real-time data to make network strategy, warehousing, inventory management, and transporting. Furthermore, cloud apps can also help in transportation route management, fleet management, order processing, and global trade compliance.

Sourcing and Procurement: The online cloud-based collaboration system allows the manager to deal with thousands of suppliers, produce procurement reports, enhance contract management, and more.

Service/Spare Parts Management: There are cloud applications that can drastically reduce capital expenditure costs, while successfully optimizing processes, inventory for the maximum profit.

The Initial step to cloud migration

Before moving to the cloud, companies need to do some due diligence. It is better to discuss with business analysts and involve them in the overall pre-plan stage to minimize the risk of failure. Here are the initial steps that one must take before moving to the cloud:

  • Be crystal-clear about what processes should involve cloud technologies. Also, make sure that you have the business IT strategy in place beforehand to know things that you can handle internally and the things you need the help of the third-party.
  • Do some market research and survey to know the needs of the market. It will help you decide which processes must integrate cloud technologies.
  • Collaborate with various third-party supply chain partners to make operations more straightforward.
  • Evaluate whether the cloud technologies are meeting your expectations or not. It is crucial to always analyze and update the system as per need.

Over to You

Most of the supply chain industry players are already using cloud computing technologies. With that said, the complete migration to the cloud will still take a lot of time if we consider the risk and migration factors. Despite the risk, the operational benefits and cost reduction due to cloud computing technologies are too difficult to ignore.

In the future, we can expect the supply and logistics industry players being more dependent on cloud computing technology.

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