By 2023, cloud supply chain management solutions are set to surpass $11B. In fact, by the end of the year, Gartner expects over 90% of spending on supply chain execution systems to be for cloud supply chain solutions.
Over the past few years, there has been an influx of cloud-based SCM solutions hitting the market. Some of them focus on the holistic approach; others, like Prokuria, are addressing only specific parts of the supply chain.
Organizations all over the world have understood the benefits of using cloud-based supply chain solutions to increase proficiency and profitability.
If you’re not convinced, below are five reasons you should move your supply chain to the cloud ASAP.
5 benefits of a cloud supply chain
1. Real-time visibility: cloud-based SCM solutions can provide real-time visibility of inventory and shipments and improve logistics tracking. This enables organizations to make strategic order fulfillment decisions and, if needed, dynamically reroute the inventory, based on the information about the current product location.
2. Maximum efficiency: each part of the supply chain is accessible through the same platform, It eliminates compatibility problems and provides easy connection and enables supply chain information sharing among partners in one single supply chain system.
3. Organizational flexibility: there is a variety of applications for the entire supply chain that can be hosted in one cloud-based platform (for example, demand forecasting or warehouse or transportation management).
4. Cost efficiency: unlike common in-house ERP systems, cloud solutions don’t require any up-front investment for software ownership. Therefore, capital costs for supply chain management software can be converted to operational costs, further enhancing the organization’s cash flow. Moreover, organizations can also save more money by reducing maintenance costs and keeping upgrade costs to a minimum.
5. Scalability: cloud-based supply chain management solutions enable organizations to control their system capacity more accurately. During high demand periods, organizations need enough capacity in order to be able to fulfill their customers’ orders. These solutions enable organizations to automatically adjust their capacity according to their needs and scale their computing power depending on demand fluctuations.
4 areas where Cloud Computing can improve Supply Chain Management
Although cloud computing can improve supply chain areas, there are four distinct activities where using a cloud-based solution makes more sense.
1. Planning and forecasting: cloud-based solutions can capture itemized spend data, perform basic analytics, plan manufacturing runs, and execute statistical demand forecasts. As ERP systems rarely have planning and forecasting capabilities, more and more cloud service providers add these capabilities to their offering.
2. Logistics: warehouse and transportation management applications are already available. Next are cloud-based solutions that can manage network strategy, inventory, global trade compliance, replenishment planning, order processing, transportation load building, fleet management, and transportation route planning.
3. Sourcing and procurement: cloud supply chain solutions can help reduce the total cost of ownership. These types of tools are built to be collaborative and accessible, which provides significant benefits for companies that deal routinely with thousands of suppliers.
Challenges associated with cloud-based SCM
The most common challenge organizations face when using cloud-based technologies is data security and privacy.
Data should only be accessed by authorized members, namely trustworthy supply chain partners. Although cloud-based solutions have multiple security systems in place to prevent access to confidential information, ultimately, data security depends on how each organization implements the tools it has at its disposal.
Cloud-based supply chain management software is on the rise, forecasts indicating huge increases in value and implementation in the coming years. As platforms grow more agile and scalable, it will be impossible to avoid using them to stay competitive.
If you’ve convinced you to look for such a solution, here’s why you should consider Prokuria.
Prokuria - the cloud-based procurement automation platform
We’ve created Prokuria to help organizations gain better control over their procurement process and achieve major time and cost savings. We want to transform procurement operations by following an intuitive and natural step-by-step process.
To achieve this, we automate several procurement functions such as:
RFIs, RFPs, and RFQs
PR, PO, and approvals
Supplier information gathering
Are you ready to take the first step towards more efficient procurement?