How Cloud Computing Is Reinventing Supply Chain Management

How Cloud Computing is Reinventing Supply Chain Management

by Alex Noah — 2 years ago in Blockchain Technology 4 min. read

Regardless of the industry, supply chain management is vital for business growth. In a bid to remain relevant in a competitive business landscape, companies seek to enhance their supply chain management processes through digital technology.

Cloud computing is a quickly evolving technology that organizations adopt to transform and enhance supply chain efficiency. With more businesses scrambling to adapt, the global market size of SaaS supply chain management solutions will hit $5.62 billion by 2025.

This trend is not haphazard. Typically, cloud computing facilitates a large-scale transformation of traditional SCM models. Here are some of the ways cloud solutions are reinventing supply chain management.

1. Track and Locate Products at Any Stage of the Supply Chain

Inventory management is one of the chronic traditional challenges that plague managers. Ideally, supply chain departments need reliable visibility and control.

When cloud-based solutions are coupled with tools like GPS, Beacons, Bluetooth trackers, RFID, and Wi-Fi sensors, supply chain managers can track inventory –regardless of the shipping stage. Having the capability to track and locate products can enhance supply chain efficiency. Most importantly, it makes it easier to gather more data about delays and bottlenecks.

Cloud-connected sensors can log your inventory automatically, thus cutting costs related to supply chain management. As the business landscape becomes more competitive, tracking products on transit can be instrumental in providing superior client service.

2. Enhanced Maintenance of Critical Supply Chain Equipment

Businesses can leverage cloud-based technology solutions to enhance the maintenance of critical supply chain equipment. When used alongside advanced sensors, cloud innovations can identify and notify your team whenever supply chain equipment needs repairs or replacements.

This eliminates the inconveniences associated with sudden equipment breakdown. In addition, intelligent cloud solutions can provide accurate predictions regarding equipment malfunction, servicing, and repairs.

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3. Leverage Big Data to Analyze Efficiency

Cloud-based SCM solutions come with unprecedented processing power, thus making them suitable for analyzing massive data sets. This capability has enabled managers to create complex simulations addressing supply chain optimization, inventory needs, and seasonal issues in the supply chain.

By leveraging cloud-based supply chain tools, businesses can identify weaknesses, fine-tune vital processes, and improve supply chain operations. Most importantly, cloud technology can help organizations analyze environmental factors and identify patterns that could trigger supply chain issues, and respond accordingly.

4. Increased IT Security for Better Business Continuity

Cloud technology has evolved to become a reliable and secure tool for business operations. This aspect enhances business continuity and lowers business disruptions often associated with onsite installations.

Virtualization and redundancy are at the core of cloud computing technology, thanks to a vast pool of resources. As such, these systems can quickly recover from technical glitches or other unexpected disasters and redeploy data.

Advanced security solutions are securing cloud technology without causing any system lags. Unlike traditional onsite SCM systems, cloud-based supply chain systems have minimal downtime, thus enhancing business profitability.

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5. Seamless Access to Supply Chain Management Systems

Cloud computing has eliminated physical boundaries that pose barriers in supply chain management. Today, managers can access cloud-based supply systems from anywhere in the world. And with increasing globalization, seamless access is vital to business success. These supply chain systems support multiple offices across the globe and facilitate real-time access to essential data.

Different supply chain departments can access supply and warehouse reporting and keep the business running. And with the future of work becoming remote or hybrid, employees can access the data from home or on the move.

6. Cost Optimization

The introduction of cloud computing in supply management has led to a drastic reduction in operational costs. Cloud computing solutions can minimize the number of staff required to carry out tasks throughout the supply chain.

For instance, cloud applications can generate automatic reports of incoming inventory at a warehouse, trigger shipments, and book the inventory on arrival. This function minimizes the human workforce required for order processing tasks; thus, you can commit more workers towards other vital roles in the supply chain.

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7. Demand Forecasts and Adjusting to Market Volatilities

With versatile cloud computing resources, businesses can project demand for new products. In the past, supply chain departments relied on sales teams and channel partners to provide demand estimates. But modern SCM departments now leverage cloud computing and advanced statistical models to develop accurate demand forecasts. Notably, machine learning technology has made it easy to identify and analyze causal factors that often influence the demand for new products.

The C-suite managers in the manufacturing industry are conversant with the detrimental impacts of market volatility. After going through the previous economic collapse, managers are always conscious of resource deployment amid an economic collapse.

Cloud computing provides a safety buffer guarding supply chain management companies against volatile markets. Most partnerships between cloud hosts and SCM providers are open to cancelation or negotiation if the market becomes unfavorable. As such, your organization can cut back on costs and maintain superior services at competitive price points.

8. Improved Speed and Scalability

The cloud computing advancements in supply chain management mean that businesses can achieve higher operational speeds despite market volatilities. Real-time access to data enhances fast planning and execution, leading to a shorter time to market. On the other hand, increased access to resources leads to better flexibility and responsiveness within the enterprise.

As the organization’s needs change, your IT infrastructure should also evolve to support the expanding needs. Cloud computing helps you scale your supply chain operations at different growth stages. Typically, cloud-based supply chain solutions employ a flexible use-based model that can be scaled up or down to suit client needs and market conditions.

9. Enhanced Integration of Different Business Platforms

Over the years, the demand for supply chain management systems has skyrocketed. To meet the demand, providers have created numerous platforms. However, most of the existing platforms are not compatible, thus limiting integration with each other.

But with cloud computing technology, you can integrate different platforms through standard protocols. This capability has nullified preexisting digital boundaries that have been the missing link for instant communication and seamless order fulfillment. For instance, Service Oriented Architecture enables various platforms to share information through web services.


While it’s still in its infancy stages, cloud computing technology is on track to become the future of supply chain management. By integrating this tech into SCM, organizations can realize accurate tracking, better security, and lower business expenses.

Alex Noah

Alex is senior editor of The Next Tech. He studied International Communication Management at the Hague University of Applied Sciences.

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