How the cloud became a critical to supply chain management

For tens of thousands of businesses – encompassing all manner of industries – cloud computing has proven utterly transformative over the last decade or so. 

The supply chain is one of countless areas where companies are reaping the benefits of moving their processes to the cloud, thanks to the level of efficiency and subsequent cost savings it can unlock. 

Somebody well positioned to explain the way cloud computing has impacted the supply chain space is Carla DeSantis, a Strategy and Operations Partner at PwC based in the US.

She specialises in designing and activating differentiated operating models while optimising costs, focusing mainly on consumer and retail clients.

“Cloud-based solutions enable real-time data sharing and collaboration across global networks, typically with more advanced analytics and predictive modelling capabilities,” says Carla. “They also are more user-friendly than their counterparts, improving adoption and application.  

“By providing a unified, more agile platform for integrating various supply chain functions, the cloud facilitates more seamless coordination and reduces the complexity of managing multiple systems.”

Carla calls this evolution “crucial” for modern supply chains given their reliance on high levels of flexibility and responsiveness to stay competitive. 

“The cloud also enhances scalability,” she continues, “allowing businesses to adapt quickly to changing demands and market conditions, driving operational excellence and strategic growth.”

Adoption of cloud capabilities ‘critical’

Cloud capabilities have already been widely deployed across supply chains big and small, with executives increasingly recognising the strategic advantages they can offer.  

According to the 2024 instalment of PwC's Digital Trends in Operations Survey, almost two-thirds (62%) of companies have adopted, or are in the process of adopting, cloud-based solutions. 

It’s a trend that reflects a broader shift towards digital transformation within the supply chain domain. Leaders seemingly have little choice but to leverage cloud technologies if they have any desire to drive innovation, improve operational efficiencies and enhance their competitive positioning in the market. 

“The widespread adoption of cloud capabilities is now seen as a critical component of modern supply chain management, enabling organisations to achieve greater agility and responsiveness to market dynamics,” Carla goes on. 

“As cloud adoption continues to rise, it’s becoming standard practice among leading businesses. The ability to quickly adapt to market changes and disruptions through cloud-based solutions makes them a strategic choice for forward-thinking companies looking to stay competitive.”

Cloud offers unified view of supply chain

Offering additional detail on why so many firms are choosing to migrate their supply chains to the cloud, Carla points to what is widely accepted as the primary positive – regardless of industry. 

“Cloud solutions enable organisations to integrate disparate systems and processes, providing a more unified view of the entire supply chain,” she adds.

“This integration helps reduce siloed functionality and promote a better – and more fact-based – consideration of the trade-offs that every operations leader faces.”

Elsewhere, cloud-based platforms are recognised as enabling a greater level of flexibility, allowing businesses to scale their operations based on current and future needs.

As a result, the operational benefits a business can enjoy are, unsurprisingly, numerous – from better investment decision-making to a more resilient network and a more strategic operations team.

“Disruption will happen,” Carla says. “The future is about how much you can minimise the impact, how quickly you can bounce back and occasionally leverage the opportunity as an advantage. A cloud solution is your best bet for making that happen.”

Guarding against disruption

On the topic of disruption, the cloud is proving pivotal from a risk management perspective. 

During this era of geopolitical uncertainty, economic strife and extreme weather events, companies need all the help they can get if they are to ensure everyday operations remain uninterrupted.

This is where cloud solutions come to the fore, thanks to their ability to leverage external data in addition to internal data – important assets for monitoring and addressing an expanded scope of risk in today’s dynamic, rapidly-changing marketplace.

“By handling more robust datasets and applying advanced analytics, cloud platforms can view risk through various lenses, upstream and downstream,” Carla notes. “Alternative sources of supply demand, vulnerabilities in supply sources and potential labour sources become easier to identify. 

“That same capability not only helps to proactively address potential risk, but can also provide real-time visibility, allowing for better management of in-line operations as well.  Potential disruptions can be detected early and addressed proactively – and more effectively.”

And that’s not all. On the manufacturing front, cloud capabilities allow material supply to be called off in line with manufacturing schedules and optimised logistics costs. Manufacturing lines can be re-balanced in light of potential labour shortages, while inventory can be better managed based on better anticipation of customer orders. 

Moreover, for demand planning, cloud-based solutions are increasingly providing AI and ML capabilities to efficiently run complex forecasting and what-if simulations. Demand and its volatility can be assessed with real-time external market data and curated forecasting models, improving forecast accuracy even with shorter planning horizons.

Ultimately, firms can prepare for various contingencies and develop robust resiliency strategies, leading to better inventory management, reduced stockouts and optimised production schedules. 

Cloud investment set to continue

As companies increasingly recognise the value of digital transformation, Carla states that, from her experience, the adoption of cloud solutions remains a top priority. 

Ongoing advancements in cloud technology, such as AI, are further driving this trend by offering new opportunities for innovation and competitive differentiation. 

Carla concludes: “Sustained investment in cloud capabilities is anticipated to be a key focus for organisations aiming to future-proof their supply chains, ensuring they remain agile and responsive to market changes.”

**************

Make sure you check out the latest edition of Supply Chain Digital Magazine and also sign up to our global conference series - Procurement & Supply Chain LIVE 2024

**************

Supply Chain Digital is a BizClik brand