Cloud computing is the backbone of any industrial digital transformation, and the supply chain is no exception. By utilizing cloud supply chain management (SCM), companies gain operational efficiency, automate mundane operations, save costs, and improve visibility. As a result, the global cloud SCM market is expected to reach $12.96B in 2028. But what are the most common use cases of utilizing cloud computing in the supply chain? An experienced cloud consultant can guide you in opportunities offered by the cloud and adapt them to your needs. Let's explore the top five use cases of cloud in supply chain management to see how each solution can help your business.
How is cloud computing transforming supply chain management?
By harnessing cloud technologies, organizations can transform their supply chains into more agile, resilient, data-driven systems, significantly strengthening their positions in the competitive market. Here are five major advantages of adopting a cloud based supply chain management.
Reducing costs
Cloud supply chain management reduces the need for hardware or significant upfront costs, enabling companies to avoid large capital investments. Moving to cloud-native services helps reduce operating expenses and allows for cost savings.
Enhancing visibility and transparency
Cloud computing in supply chain management enables simplified connectivity to warehouses, transport networks, and distribution centers in multiple locations. This visibility provides insights into supply chain trends and bottlenecks, enabling business leaders to identify potential issues early and make informed decisions swiftly. For example, when N-iX developed a cloud solution for a large procurement enterprise and implemented a background cloud-based monitoring tool, it helped the company get a clear view of the whole processing system and supervise the completion of tasks in a queue.
Read the full case: Software product development for Efficio - UK-based management consulting company
Automating supply chain operations
By leveraging cloud computing, supply chain businesses can automate various operations, such as order initiation and processing, inventory tracking, invoice-to-cash cycles, and warehouse optimization. Connecting multiple platforms in the cloud automates and streamlines order management, inventory synchronization, and other supply chain processes.
Streamlining communication
Cloud supply chain management enhances communication by consolidating data on sales, product movement, and replenishment across departments. This data is then shared with supply chain partners, including orders, inventory, and payment details. With unified cloud platforms and data access, suppliers, manufacturers, and distributors can collaborate more effectively, improving coordination and accelerating problem resolution.
Strengthening security
Cloud providers invest significantly in advanced architecture and cybersecurity. They consistently upgrade their systems with advanced security measures to protect your data. Using cloud security capabilities, N-iX has implemented a centralized authorization for the whole infrastructure for the UK procurement company we mentioned before. This helped ensure the overall security and the best performance of implemented applications.
5 use cases of cloud computing in the supply chain
IBM reports that 74% of chief supply chain officers view cloud and hybrid cloud integration as essential for digital transformation in supply chains. According to the study, 40% believe it enhances forecast accuracy, 44% see improvements in asset allocation, and 10% find that it lowers structural costs. So, what are the most common cloud computing applications in the supply chain? Here are the main five:
1. Managing logistics
Manual management of logistics processes can increase costs and limit visibility. Cloud supply chain management solutions help automate workflows, enhancing efficiency, speed, and transparency. Here are some of the logistics management capabilities enabled by cloud supply chain management:
- Coordinating the movement and allocation of trucks and other vehicles;
- Sequencing and prioritizing new orders;
- Automatically generating or updating supply and shipping routes to prevent delays;
- Providing real-time good tracking and live inventory updates;
- Automatically filling out compliance documents, invoices, receipts, and more;
- Streamlining communication across various departments and stakeholders.
2. Automating inventory management
Automating time-consuming inventory tasks with the cloud significantly simplifies overall management. For example, it can help you automate product reordering when they hit a certain stock level or link cloud services to connected sensors for real-time tracking of in-transit parcels. This automation is especially beneficial during peak times like the holiday season. It helps prevent stockouts, improves customer satisfaction, and makes businesses more responsive to demand.
Additionally, cloud computing enables seamless integration of machine learning that can be used for more precise prediction analytics. It helps analyze historical sales data, identify trends, and forecast future demand. Cloud computing combined with ML can handle multiple stock keeping units (SKUs) and refine forecasts as new data is added. Cloud SCM provides real-time updates on stock levels across facilities. It supports automatic alerts for low stock and offers robust backup options to protect inventory data.
3. Advanced forecasting
Forecasting future trends is crucial in supply chain management, as it allows businesses to adjust processes and scale operations to match supply with demand. Cloud-based solutions can help get a comprehensive view of current and future conditions by effectively collecting and organizing data from various sources, such as customer service channels, online sales portals, retail locations, and wholesale suppliers.
With these unified data streams, logistics professionals can perform in-depth analysis and make precise forecasts based on current trends. This capability enables companies to manage inventory for critical and seasonal medications nationwide. However, this applies not only to the logistics department. For instance, N-iX cooperated with an industrial supply company to develop a unified cloud big data solution to collect and analyze data from different departments. With the predictive analytics of the cloud platform, the company can forecast inventory-related expenses and calculate the budget more precisely.
Read the full case: Scalable big data analytics platform for leading industrial supply company
4. Improving procurement and sourcing
Supply chain disruptions can greatly affect profits, so proactive prevention is crucial. Managers should diversify procurement and sourcing strategies, with cloud tools aiding in tracking communications, contracts, and key data. For companies dealing with numerous suppliers, cloud computing offers a way to digitize and streamline sourcing and procurement. Key benefits include automation of vendor changes based on current supplies and automatic generation of invoices, custody documents, and compliance databases.
Cloud tools also help track expenditures, ensuring that costs for raw materials align with market rates and eliminating administrative delays. They provide insights into product origins, encouraging a broader supplier network. The cloud also enhances accessibility to documentation and ongoing data, crucial for a well-coordinated supply chain. It also supports complex processes like reverse factoring, offering speed, efficiency, and organization to boost cash flow.
5. Managing maintenance and equipment failures
Breakdowns in delivery trucks, assembly lines, or other critical assets can disrupt the supply chain, but cloud platforms can help mitigate these issues. Cloud computing enables supply chain companies to consolidate their physical infrastructure into a cloud-based maintenance dashboard, covering material-handling equipment like water or energy systems and conveyors.
Using hardware sensors and software intelligence, cloud-based maintenance platforms can continuously monitor mechanical assets for leaks, pressure drops, and temperature or vibration anomalies. This proactive approach can save manufacturers a significant amount of money annually, enhancing ROI and reducing product defects caused by faulty equipment.
How can N-iX help you adopt the cloud across the supply chain?
N-iX is a trusted cloud consultant, providing a variety of cloud and DevOps services. Our team of over 2,200 tech experts has enough experience to implement cloud computing and related technologies into your supply chain and ensure smooth and productive operations. Over the past five years, our team of 400 cloud experts completed over 100 cloud projects across various industries, including supply chain, logistics, finance, retail, healthcare, energy, and more. As a Microsoft Solutions Partner, AWS Advanced Tier Services Partner, and Google Cloud Platform Partner, N-iX collaborates with leading vendors to help you select the ideal cloud provider. We also adhere to rigorous cybersecurity standards such as PCI DSS, GDPR, ISO 9001, and ISO 27001, ensuring your organization's cloud security. Trust N-iX to navigate you through adopting cloud supply chain management.
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