How cloud computing is reinventing supply chain management

"Many supply chains are perfectly suited to the needs that the business had 20 years ago." ~ Jonathan Byrnes, MIT Professor

This quote emphasises how necessary modernising supply chain management (SCM) is. Supply chain efficiency is key to businesses. It controls the two most prominent differentiators of the market today: price and customer experience. Supply chain management is a broad field with 7 primary functional areas: purchasing, manufacturing, inventory management, demand planning, warehousing, transportation, and customer service. When one process of the supply chain is disrupted, it can have a cascading effect, severely compromising the whole chain.

How can you achieve efficiency and make SCM future-ready? The answer lies in technology, in a platform that can provide the below-listed features:

  1. Dynamic provisioning: A volume management feature that enables flexibility in resource deployment to match customers’ fluctuating demands and supports heterogeneous applications.
  • Multi-tenancy: A cloud software architecture feature that has provision for shared hosting, in which server resources are divided among different customers.
  • Apart from the features listed above, an environment that enables better server utilisation and data centre efficiency will help add substantial value to the solution.

    Where can we find a platform that encompasses all the above? Can cloud technology help?

    Benefits of a cloud-driven supply chain management

    It is essential that each of SCM's key functional domains – purchasing, production, inventory management, demand planning, warehousing, transportation, and customer service – work well both independently and collaboratively. How might a cloud-based, agile* SCM assist with this? Here are a few pros of using cloud computing in SCM:

    1. Systems and operations scalability:
    2. Managing a supply chain is difficult enough on its own. Market fluctuations and changing demands bring in added complexities, elevating the difficulty level expressly.

      The existing on-premises digital SCM solutions have been useful, no doubt. However, the cost of maintaining them and scaling them up is significant. Additionally, as data increases, the on-premises solution becomes heavier. Therefore, hosting the SCM solution on the cloud is beneficial — it impacts many areas of the supply chain operations positively.

      1. Operations become easier to manage and scale.
      2. Computing resources are easily scalable.
      3. (Re)Configuring the solution becomes easy.
      4. Equipment maintenance becomes streamlined as notifications are enabled.

      A scalable SCM solution offers maximum flexibility and efficiency at optimum cost. This leads to improved customer satisfaction and has a direct impact on the bottom-line.

    3. Increased connectivity, visibility, and collaboration:
    4. The journey from thought to store involves a complex process flow, and travel through a complex network. Companies need to continuously share information with suppliers, vendors and customers at all times. This is where cloud-based solutions can be of great help — they facilitate the integration of different platforms, thus dissolving prevalent digital boundaries that have been falling short in rendering smooth fulfilment of orders.   Additionally, the cloud offers enhanced visibility and tracking across the network. This, in turn, facilitates collaboration, resulting in more efficient processes.

    5. Risk mitigation and real-time decision-making:
    6. A well-linked supply chain and an environment conducive to deploying analytical models — these two factors, made possible by cloud computing, provide decision-makers with timely insights. Overall, cloud-driven SCMs are intelligent — they are capable of spotting potential risks, and are equipped for on-the-go decision-making.

    7. Swift responses:
    8. The in-memory computing capabilities of the cloud expedite the supply chain process. Faster planning and execution help to improve responsiveness to market conditions, and quickly reallocate resources to where they are most needed. Sudden market fluctuations need no longer be the bother they once were.

    Some of the SCM functional areas that have profited from being cloud enabled include sourcing and procurement, logistics (inventory management, warehousing, etc.), manufacturing, and planning and forecasting.

    Can cloud computing benefit other areas in the coming years as well?


    Retail and eCommerce are growing rapidly. Increasing logistics costs, winding production cycles and poor inventory management are major areas of concern for all businesses. Moreover, the demand for a more transparent and visible supply chain has grown over the last few years.

    These situations have an adverse impact on customer experience, which also makes businesses anxious. And, why not? Do you have a customer who says "It's okay" to delivery delays?

    Businesses can keep these worries at bay by leaning on technology that offers a way out of these difficulties and prepares companies to avoid getting into tight spots.

    Many businesses have already started to make their SCM future ready. The proof is in these numbers from ‘MarketsAndMarkets’ which has projected a Compound Annual Growth Rate (CAGR) of 9.4% in the next 5 years (from USD 28.9 billion in 2022 to USD 45.2 billion by 2027) for the global SCM market. Despite its nascent status, cloud computing is set to revolutionise SCM. Are you ready to adopt it?

    *For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.

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