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Why Cloud Adoption is a Sound Choice for the Supply Chain

Solo truck on the open road with a sky full of clouds in the background

As supply chains evolve, it's only natural that their stakeholders' needs follow suit. After all, tactics that worked well for a small fleet or in a limited distribution area may fail spectacularly in the face of the unexpected – like a pandemic.

Those who want to keep up must be proactive, and many invest in technology improvements to do so. The need for more adaptive solutions and heightened robustness has prompted many such evolutions. The advent of cloud computing, however, has revolutionized how supply chain stakeholders fulfill their missions.

What makes the cloud such fertile ground for cultivating and expanding supply chain implementations? What do these trends mean for businesses still struggling to find their stride? Here's some perspective on what makes such questions so important and why migrating to the cloud isn't just a matter of preference.

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Cloud Adoption Is a Sound Supply Chain Choice

On a fundamental level, cloud computing is a form of distributed intelligence built around computing hardware that may not be geographically or physically collocated. These implementations overcome the traditional challenges of distanced computation by employing high-speed data transmission, flexible resource management practices, and intelligent software tools. When viewed in this light, using the cloud to power supply chain operations makes perfect sense.

Bridging Physical Gaps

Imagine you owned a distribution hub that stocked food or another perishable commodity. A network of temperature sensors placed at choice locations around the warehouse could gather feedback from the points where your operators needed it most, such as entryways, freezers, and similar locations. Depending on how your facility was wired – or hooked up for wireless – the same sensors could regularly transmit data to a central computer that aggregated the information.

One of the coolest things about this example is its adaptability. If you were implementing such a system, you could take your pick of not only the sensor hardware but also the main computing setup.

Most generic sensors also use broadly interoperable communication protocols, such as Wi-Fi. Such versatility gives you ample leeway to shop around for a software platform that does whatever you want with the data. For example, you might have your temperature monitoring network send you mobile alerts if the climate control system failed or generate in-depth food-safety compliance records.

Low-cost hardware, straightforward network connectivity, and a broad spectrum of SaaS providers make it simpler to upgrade facilities with extensive, data-aware clouds. Thanks to blockchains and similar federated technologies, these implementations are extremely resilient, capable of maintaining information accuracy even in the face of system failures.

Taking Advantage of Established Systems

The at-a-distance benefits of cloud technology don't just apply to physical buildings. It's also extremely helpful for fleet operators.

Companies that move goods along supply chain routes have long been proponents of cloud-equipped fleets. Some common use cases include -

  • Outfitting trucks and vans with speed trackers that communicate with regional dispatch computers to let other fleet drivers know about problematic road conditions,
  • Monitoring drivers remotely to minimize accident risks,
  • Linking vehicle performance sensors with central systems that track individual and aggregate fleet data to anticipate the need for service – before drivers break down on the road,
  • Overcoming traditional cost and implementation challenges associated with setting up computing services at worksites in the field, such as mines, and
  • Tracking order fulfillment data to provide end-users and customers with a better idea of where their shipments are, thus increasing satisfaction.

Once again, this is an area where the cloud makes it possible for a broader range of enterprises to take advantage of their supply chain data. Although routine operations already generated this information in the past, it was only accessible to larger companies that had the resources to capitalize on it. Now, however, you can provide fine-grained tracking information without relying on a third-party delivery driver to scan the parcels at the drop-off point.

Automating Decision-Making Where It Happens

Delays in propagating information lead to poorer decisions. When you make moves based on outdated data, it's exceedingly difficult to ensure you're taking suitable steps for present conditions.

Modern supply chains exemplify how this problem can have catastrophic implications. Warehouses, hubs, and fleets only have so much capacity, and your ability to profit might hinge on whether you use your space to its maximum potential. For instance, if you leave freight sitting outside for too long, it may become unsellable. If your storerooms are empty because you failed to schedule incoming and outgoing shipments properly, then your business might have to eat a significant loss in the form of wasted rent money.

Cloud technologies soothe these pain points. Obviously, getting information straight from the source cuts down on mistakes and heightens efficiency. There's also another huge benefit: their ability to automate your response to continuous feedback.

It's not hard to program basic behaviours into a supply chain monitoring system. Most software facilitates this with straightforward user interfaces, so you don't even have to learn to code.

Earlier, we discussed practices like having temperature sensors sound the alarm for out-of-bounds readings, but that's just scratching the surface. Automated decision-makers can be as intelligent as you like, particularly when you feed them the right kinds of data.

Going back to the food warehouse example, you might have your workers scan items as they go into storage. From there, the supply chain management software could reduce your electricity consumption and lower operating costs by telling an HVAC controller to avoid cooling spaces that don't require temperature control – or pre-cool the ones that will soon become occupied.

Automation also highlights how helpful it can be to use AI and machine learning in conjunction with supply chain networks. It's not always readily apparent which data trends ought to prompt interventions or responses. Getting the hang of things can prove particularly tricky when your sensors or systems generate feedback that contains a lot of noise.

Machine learning is well-known for its power to sanitize information, or clean the data up so that you can draw meaningful conclusions. Best of all, you don't need to sit there and supervise the software the whole time. Letting it learn by itself is the whole idea.

What Will the Cloud Do for Supply Chains in a Post-COVID World?

Before the pandemic, the cloud was just a "nice to have" improvement. True, many supply chain operators had already adopted Internet of Things, or IoT, technologies. It just wasn't a necessity.

COVID-19 redefined everything, including what supply chain stakeholders have to do to succeed. The ongoing 2021 supply chain shortage is a perfect example of what's at stake, and the full ramifications of this event remain to be seen.

It's uncertain whether the 2021 shortage was merely an issue of labor or the combined result of workforce woes, market hesitancy, and similar factors. What's clear, however, is that the industry as a whole dropped the ball. Consider the fact that the pandemic, complete with travel restrictions, border closings, and lockdowns, was already well underway by the time most people began to see the visible supply chain impacts. More widespread usage of data that reflected actual conditions, instead of banking on investors' hopes for a miraculous recovery, might have prevented many of the impacts observed by businesses and consumers that relied on the smooth transit of goods.

Obviously, cloud technologies aren't some panacea for all of these issues. For instance, contributing factors like the Suez Canal blockage most likely would have happened no matter how well-connected the Ever Given had been. Nonetheless, enhanced focus on IoT-powered supply chain tech could have potentially made the problems less dire by:

  • Limiting the impacts of labor shortages by making it easier to operate supply chain facilities on skeleton crews and onboard new hires,
  • Keeping shippers better informed of trends in port berthing availability to avoid massive container backups, and
  • Empowering industry leaders to communicate the realities to government officials more accurately to improve the efficient use of strategic reserves.

The key takeaway from the supply chain disasters of the COVID-19 era will most likely rear its head once the dust has settled. After companies discover just how much money they lost to goods spoilage, flagging consumer confidence, and spiking operational costs, it will no longer be a question of if they should move to the cloud but whether they can do so before they lose everything.

Finally, remember that migrating to the cloud isn't just about improving internal efficiency. Consumers and businesses increasingly clamour for greener, more ethical products and services. Supply chain providers who lack the data to back their good intentions will lose face.

They'll also have a harder time keeping up with the vast majority of their competitors who can provide perk-filled services, like consistent tracking and timetable guarantees.

It's obvious which way the wind is blowing. Cloud adoption is becoming the standard best practice. The only question is how long you have left to get on board.

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