With new and improved communication technologies available to businesses today, the supply chain is more comprehensive and easier to manage than ever. Traditional methods of communication were centered on the processing of purchase orders and weren’t just slow, but were also costly to maintain in the long run.
To take an example of a traditional communication model, the OEM would receive an order from a customer, which would then be entered into the materials requirements planning or MRP system. Based on forecasts from the MRP system, the OEM would send a separate PO forward to suppliers for procurement of material. Suppliers also follow the same protocols upon receiving this order and take their sweet time to get production started.
With the current cloud communications technology on offer by IT systems, purchase orders and material requests can flow almost automatically and instantaneously throughout the supply chain system. The entire process is managed at virtually no cost. While the up-front investments required for running cloud systems can be significant, they reduce administrative and operational costs for a significant period to come.
In this article, we take a look at how the cloud can improve processes in the supply chain. Cloud systems come with the capabilities of drastically reducing lead times and improving responsiveness.
Real-Time Data Sharing and Processing
One of the major challenges of a supply chain network is the ability to integrate information from multiple platforms into a data channel. Real-time sharing of important and strategic information is necessary for the growth and sustainability of a supply chain model. It is also vital to ensure the seamless flow of operations across the supply chain.
The sharing and processing of supply chain data is directly related to various environmental factors, customer demand, partner strategies and even the supply levels coming your way. Transparency is a major point of contention in a supply chain. There are numerous factors you need to analyze and agree on before approving or recommending them. For instance, when optimizing or implementing a new delivery route, you have to consider the time it will take to travel to and from each destination, the starting point of the route, the drop-off points where the route concludes, the timeline for certain events and even external factors such as traffic and weather.
It is necessary for businesses to use information in order to retain control over not just processes, but the goods themselves as well. Having transparency and full knowledge over the sourcing and transportation of goods can come in handy during all future events. Supply chain management data sharing and modeling can help you pull out defective items and track defect rates. This can save a number of headaches and improve your understanding of the situation.
Managing External Factors with Data
Continuing from where we left off in the previous section, seamless logistics can be achieved by dealing with all kinds of circumstances and situations that happen as a result of external factors that are outside your realm of control. For instance, the socio-cultural changes in a supplier’s country can not only destroy performance, but can also hinder your timelines. Furthermore, massive shifts in consumer demand for totally unrelated reasons can put your supply chain in a spot of bother, especially if you haven’t prepared for the negative demand curve.
Big data solutions can come in handy here, as they organize and prepare data related to all external factors as well. You can use the actionable insights generated by these systems to determine just how they impact your productivity and performance.
Imagine a system here that can help the processing and building of predictive models for better supply chain management. Using this system, you can better manage social events of the future and reveal the outcomes they carry.
Inventory Planning and Optimization
Perhaps the biggest use case of big data and information sharing comes in the realm of order optimization and inventory planning. Across the supply chain, information sharing systems can propel you into planning, optimizing and forecasting your stock levels to meet the changing demands around you.
This process is more about maintaining automation than running manual checks on deliveries. Big data solutions can significantly enhance information sharing to help and facilitate the process of inventory information. This can help while ordering new items when and where they are needed, shipping out orders and dealing with supply processes.
Let us imagine a manufacturer who develops a product that takes more than five months to manufacture. A big data system will take everything from product manufacturing and demand into consideration before suggesting an appropriate timeline for next order placement. This allows processes and things to run optimally without any flaws or impediments.
Through the use of technology, organizations can initiate an order optimization process without any extensive delays. As soon as one batch of manufacturing is complete, materials for the next batch are to be made readily available. Limiting and completely eradicating the downtime between organizations ensures efficiency of the highest levels.
Enhanced Customer Satisfaction
The presence of real time information systems can also lead to more nuanced advancements in the way things operate within an organization and in a typical supply chain. While information-sharing systems improve the efficiency of the supply chain in general, they also help improve the customer experience as a whole. Customers feel more satisfaction and are able to perform better over time.
Regardless of whether you are delivering orders to retailers or to the direct customer, the sharing of efficient information across your supply chain gives you the leverage to minimize any flaws and ensure the proper provision of services across the chain.
Conclusion to Why Supply Chains Need Cloud Services
The cloud can give you all of the benefits above and much more as you position your supply chain for the market today. Run through these reasons again and move to the cloud for more.
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