Advantages of Cloud Computing for Supply Chain Management
- What is cloud computing?
- Re-imagining SCM using the Cloud
- Why is the Cloud essential for business?
What is cloud computing?
Cloud computing, often referred to as ‘the Cloud’, is simply the process of running programmes and storing data over the internet, rather than using a local or personal server. The Cloud is not only taking over personal services, but also professional ones. Companies who offer cloud-based services typically charge a ‘subscription’ fee, which often proves more cost-effective for smaller businesses. This subscription fee gets you to access to a cloud server; that is, a virtual private server (VPS) hosted across multiple machines rather than just a dedicated server in one location. There are plenty of options to choose from when it comes to the Cloud such as infrastructure, platform, and software- and even these can come in three types of deployments: public, private, or hybrid.
We are currently experiencing generation 2.0 of web platforms, which has seen the web evolve away from content and towards applications. This means that the bulk of user data and applications reside within the Cloud- for instance, email, financial management and supply chain management– and there has been a shift away from displaying information and data using locally installed programs towards supplying large quantities of information from a browser.
Re-imagining SCM using the Cloud
Companies can be reluctant to move their data over to the Cloud for multiple reasons. Management can be wary of adopting cloud-based supply chain management due to security concerns over data breaches and loss of irreplaceable data. The potential lack of security in the use of Cloud computing can lead to distrust among users. And in a supply chain, you risk more than just your own company’s data- you also have some level of access to your supplier’s and customer’s data as well.
But the risks of using the Cloud for your supply chain management are no greater- though maybe different- than the risks you run using an on-premise IT solution, and the “traditional” view of supply chain management is no longer the best option for most companies. As supply chains become more complex and globalised, it’s important for companies to invest in the right tools that will allow them to effectively manage their operations.
Why is the Cloud essential for business?
The cloud offers your business may benefit that will ultimately positively impact your supply chain performance.
Moving to the Cloud eliminates expensive software setup and the ongoing cost of running and maintain data centers. In the long run, it allows for the reduction of costs associated with managing and maintaining IT systems since, rather than purchasing expensive systems and equipment, you reduce costs by using your service provider’s resources and only pay a subscription fee.
Cloud computing provides an on-demand service, meaning you have a vast amount of computing resources and data always at your fingertips. This allows for greater flexibility and responsiveness, and it takes some pressure off your supply chain planning and management. The Cloud is connected to your resources so you’re constantly able to get up-to-date content allowing you to make informed decisions with the right information.
The Cloud allows for greater collaboration because it gives your business the ability to communicate and share data more easily than traditional tools do. Using the Cloud allows you to make it easy to share your supply chain information across multiple locations and with external collaborators.
To keep up with growing demand, companies currently will use multiple systems which can cause displays. The Cloud allows for the consolidation and coordination of data. The Cloud can also rapidly respond to meet new demands in terms of size and volume, making it a valuable tool for organisations of all sizes since it allows for supply chain growth and scalability.
Consolidation of your Systems
Increasing supply chain size and complexity means that your business has a high volume of documents that are being exchanged electronically between your company, suppliers, and buyers. Using the Cloud allows for these documents to be found in one location.
Despite concerns, the Cloud is actually incredibly secure for computers, network, and information security. In the case of the Cloud, the major concern in more often data loss rather than data hacking. However, both are protected against this by Cloud service providers through encryption and other measures, and investing with top Cloud providers can really pay off.
The digital age and globalisation mean that your business needs to be more connected to succeed. As your supply chain grows and evolves, your methods and tools should be as well. Explore the benefits of utilising a cloud-based solution such as EazyStock to achieve inventory optimisation.
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