Cloud computing has played a critical role in the improvement of supply chain management by supporting an enterprise’s efforts to share data with multiple partners across many different locations throughout the world.
While the benefits of cloud computing include improved collaboration among supply chain partners, cost-effective use of staff resources and the ability to adapt to changing business needs quickly, many organizations first migrate to the cloud through focused, task-oriented solutions as opposed to enterprisewide solutions.
A company’s first cloud experience is most likely with a human resource or customer relationship management (CRM) system but once management sees the cost benefits along with more efficient processes, they look for more opportunities to use the cloud, says Craig Downing, senior director of Global Cloud Marketing at MHI member Epicor. “Not only has the explosion of cloud-based technology increased interest, but during the most recent recession, supply chain leaders asked for more from their technology—more capabilities, greater visibility throughout the supply chain and improved costs,” he explains.
Geographic expansion has also made use of cloud computing a necessity for many organizations, points out Badri Devanathan, executive vice president at MHI member Softeon. “About three years ago, one of our customers who managed a supply chain that ranged from the Ukraine to Israel and included multiple sites in different countries, shifted to cloud technology,” he says. Moving to the cloud expanded ease of access to information for all partners and enabled real-time monitoring of performance.
The value of a cloud-based platform is access across different systems. “When information is no longer maintained in siloed systems that are accessible to one department or one partner, multiple departments can use the information to improve performance and planning,” says Justin Stone, account manager at MHI member Deposco. “Cloud-based applications also enable the use of mobile technology, which improves efficiency and real-time data collection.”
Cloud offers range of benefits
Although access to information across systems enables an organization to monitor needs and adjust inventory or schedules to meet changing needs, supply chain managers should not overlook the benefits of collaboration. A study conducted by SCM World found that 46 percent of survey respondents reported that problems are solved twice as fast when the level of supply chain collaboration increases.
It is also not only high-level business issues that can be resolved through information sharing, points out Downing. “The growth of social media in our personal lives has led to comfort in using technology to reach out to others for advice so when companies enable enterprisewide platforms for communication, solutions to problems can come from unlikely sources.”
For example, a welder at one of Downing’s client companies—a metal fabricator—was having difficulty working with an aluminum pipe. After posting a question on the company’s in-house “social media” site, the welder received advice from another employee who worked with the same metal while in the navy. The advice, which solved the problem, came from a sales team member in a different state—a source that would never have been tapped if information remained siloed.
By Sheryl Jackson