Why cloud computing will support more resilient and responsive supply chains
Cloud computing is the single most important tool supply chains need to future-proof their operations says new white paper
If it wasn’t clear prior to 2020, it certainly is now: Supply chain risk needs to be better managed and cloud computing will be a critical tool underpinning this drive.
That the conclusion of Reuters Events, Supply Chain’s new cloud computing in supply chain management white paper, made in partnership with China Telecom (Europe), and which is free to download now.
Why cloud is needed at the ground level of supply chains
The issues that have be brought to the fore in supply chains since the pandemic have starkly illuminated how an older way of doing business produces vulnerabilities and prevents rapid reaction to emerging situations. Hived-off teams working on spreadsheets and wading through physical documents are not enough to function properly in a modern, global economy and cannot adequately handle the extremes or, increasingly, even the day-to-day of supply chain operations.
When it comes to understanding a logistics operation, the gaps are substantial in a localised system relying on file transfers. These set-ups cannot grasp where individual shipments are, where bottlenecks are building, how suppliers are faring, how demand patterns are changing, and what stage documentation has reached with the level of granularity and speed required to make a supply chain that is not only well-informed, but also reactive.
Therefore, the single most important enabler of improvement in supply chains will be cloud computing.
“I think what has happened in the last two to three years has been a full recognition of cloud computing as the future for data management in the enterprise, not only for supply chain,” thinks José (Pepe) Rodriguez, Managing Director and Partner with Boston Consulting Group (BCG), who is one of the many experts interviewed in the research.
“I think that organisations have shifted their perspectives from maybe cloud as an option to a cloud-first [approach] in terms of solving data problems for their customers, internal customers, and the business functions within their companies,” he comments.
“I think everybody agrees that cloud is the future,” concurs Luiz Felipe Bouças, Global Logistics Director for Kraft Heinz.
Where cloud completes the picture
Ultimately cloud is a bridging technology that builds connections across organisations and acts as force multiplier for tasks that require heavy computing power and as an enabler when rapid communication is required.
With the capacity to access an entire organisation’s tech stack in a common framework, have a single data pool, and operate a shared data layer, the holy grail of modern supply chains may finally be in sight: End-to-end visibility.
This is the view of brewing giant AB InBev, as in the opinion of Erik Novaes, VP of Procurement and Sustainability, they “Understand that in the future, this kind of technology and this end-to-end knowledge about the process is going to be a must…. So, we are going to keep investing.”
“I believe cloud is a huge enabler that allows us to speed up the process of providing visibility end-to-end across our supply chain,” adds Pieter Bruyland, AB InBev’s VP of Solutions.
BCG’s Rodriguez says that for one pharma client they worked with, moving over data on shipments from their distribution partners to the cloud, allowed them “to gain a whole new level of visibility to what was happening in their transportation. I remember helping them use this data to identify efficiency opportunities. For example, just having a global view of transportation modes being utilised between air shipments and surface shipments, and being able to compare that to their stated policy or budget allowed us to find places where the execution was deviating from those budgets and just attaining the budget would result in a significant value improvement.”
These kind of benefits are what is driving apparel giant Under Armour towards cloud platforms. “The aim, as we look at 2021 in [terms of] our digital transformation, is that we're going to have demand, inventory and supply planning all in one solution, one platform, 100% integrated,” explains Doug Korba, Senior Director, Global Supply Planning. “From that we will be able to see what's happening on the demand side and then correspondingly react from a supply perspective and then pass that through our collaboration portal to the factories.”
A flexible solution
“There are two predominant, connected reasons for moving to the cloud,” argues Andrew Underwood, Operational Transformation and Powered Procurement at KPMG
“The first is for more flexibility to allow upgrades of IT, which can be completed at lower cost and more frequently in a cloud environment. Secondly, the cost of using the cloud is reducing and so more data can be held at lower cost.”
Unlocking this additional data and analytics capability produces a variety of benefits.
For Kraft Heinz, they can now run “Much more powerful capabilities, such as what-if scenarios capabilities … from cloud in a much easier way [that is] embedded in the software,” says Bouças, which is “a huge plus.”
Supply chain operators are also finding that development and deployment cycles for analytics programs are shorter when using the cloud. According to Bruyland, AB InBev are getting have found that one of “Internal benefits of leveraging cloud products and not building [through] legacy is the reusability.” So, if they build a product through the cloud and test it in one region, then the “other zones will be caught up right away, because it already works. The platform is there, and then they just need to copy-paste.”
The benefits springing out from cloud computing, both in the immediate future and further out as new technologies mature, doesn’t end there. If you want to explore these additional benefits, find out more about how cloud is changing supply chains for the better and understand how to implement cloud computing effectively, download the cloud computing in supply chain management white paper now!
With your free download you will get more than 30 pages of detailed insight into cloud computing in supply chains, including:
- The views and insights of technology leaders from companies including AB Inbev, Accenture, BCG, KPMG, Kraft Heinz and more.
- Multiple case studies of how cloud computing has achieved real-world gains within supply chains.
- Data and analysis about how supply chains are being changed by cloud computing.
- Advice and guidance on how to transition successfully to the cloud and be resilient.
- Insights into future technologies enabled by cloud computing that will unlock productivity gains.