The Rise of Cloud Technology in 2021
Throughout 2020, most businesses found that cloud technology might just be the key to maintaining the sustainability and efficiency of their supply chain during a tumultuous time. And as the world emerges slowly into a business-as-usual state, many who had previously not given it any real thought have now implemented cloud technologies into their logistics.
Supply chains that actively utilize cloud-based platforms for day-to-day operations are able to realize large cost savings in a variety of ways while maintaining uniformity across the various departments of the chain.
Connecting Your Disparate Systems
One of the hardest setbacks for a business is the lack of seamless integration of data from various departments. Communication between suppliers and carriers where the data is stored within in-house solutions presents the risk that the data will vary. Should one system go down, during that time, data could be delayed and other issues could arise as a result of lack of communication between the platforms.
However, in 2021, companies are more than ever before leveraging cloud-based software for all sorts of supply chain tasks. Through cloud technology, companies can ensure that all parties have access to the same software platform as one another at all times, thereby eliminating any discrepancies in data. That centralization and real-time data syncing is the entire point and cloud technology delivers on that in a big way.
Having said that, information will still need to be physically checked in very sensitive cases that need to be closely monitored to ensure data reliability. Being able to keep track of and record data within a cloud-based system, however, leads to a stronger and more efficient supply chain, as well as happy business partners.
Consumers have grown accustomed to having real-time, or close to real-time tracking of their products. From shipping label scans to SMS updates, the necessity of businesses to provide information to their clientele is increasing as the bar for industry standards is raised just a bit year over year.
As such, many logistics companies have turned to cloud-based platforms to provide information across their entire network. Doing so creates instant access for their customers and partners to the type of transparency and control over the process that they need in order to see the progress in action.
Supply chains, specifically where it pertains to tracking material orders in 2021, have benefited from the use of real-time cloud-hosted platforms.
Being able to see the progression or to anticipate delays based upon the data provided by the carrier allows the business to adjust the order intake and production of goods, reducing risks of backorders, unmet deadlines, or stockouts.
Using Cloud Technology in 2021 for Inventory Continuity
Inventory is typically broken up into different segments. These segments include in-house, yard, warehouse, and supplier inventory.
Problematic to all supply chains is the methodology in which data has been processed for each of these departments. In many instances, each area of a business has its own dedicated platform within which to record inventory. Many departments have an in-house network, but the data is still heavily reliant upon timely communication and the accuracy of input between the other departments.
Should these departments rely upon manual input, time delays within the supply chain are imminent.
For example, if a welding facility gets an order requiring 100 pieces of steel, then the orders department must relate that to the in-house inventory department, that department must then check their stock and subtract their inventory and relate the needed number of pieces to the yard. At this point, the yard must tally up its supply and determine the amount of steel that needs to be ordered in order to fulfill the client’s demand. The margin for a calculation error is large, especially if a new order is placed while this information is being calculated.
Even if a spreadsheet or in-house network software platform is used instead of a singular platform or program on the cloud, there is a potential for miscommunication between departments due to time lags, syncing issues, or the wrong user data being entered.
Cloud-based real-time inventory tracking has also been shown to reduce over/under ordering of materials. By having instantaneous updates to inventory, whether that is in-house, yard, warehouse, or the supplier’s inventory, businesses can better regulate orders, re-order material supplies, minimize waste and fulfill orders.
Cloud Technologies could reduce costs in 2021
Ensuring that a business’s supply chain functions at optimal levels while simultaneously reducing unnecessary expenditures is the key to having the highest returns. Various studies have proven that companies that transition certain operations to the cloud can reduce their overall cost of operations, minimize their carbon footprint (sometimes to the point of reaching government bonus incentives), and maximize their brand’s authority in the industry.
Additionally, adding cloud-based services or products to your existing physical inventory has the potential to increase your brand authority and drive revenue.
Because cloud-based technology does not require in-house servers, though you may wish to still have a backup server, the electrical emissions from your business may be reduced. Coupled with a smaller paper trail and lower waste through cloud-based IMS and WMS, businesses are apt to be labeled more economically conscientious.
Should you implement cloud technologies into your supply chain in 2021?
Several studies have concluded that businesses that use cloud-based technology run more efficiently. Supply Chains should understand that the cloud is a business tool. And just like any other tool used by a business, proper use and training are crucial to its reliability.
Businesses should recognize the potential risks and benefits of using the cloud and weigh those risks and benefits against their supply chain’s needs.