Cloud-based applications continue to penetrate the supply chain management software space as more operations are eager to embrace the advantages which it maintains over traditional options, but what is this latest trend in technology stands for in logistics perspective?
The term “Cloud Computing” refers to a shared software and/or information that users access via the web. Rather than storing information on their own physical servers or computer hard drives, users rely on servers that are maintained by the cloud computing software providers. From the user perspective, all information is stored and readily accessible online in a 24/7 format, and from various types of devices, such as desktops, laptops, tablets, and smartphones. That being said, instead of using their own physical servers or hard drives to store the software and information, more and more logistics professionals are subscribing to these software services that are housed and accessible online.
According to the latest survey from “Logistics Management Technology Usage Study”, 18% of responding logistics professionals say they’ve already adopted cloud-based solutions, 37% are evaluating them, 13% don’t actually see cloud-based solutions as an option, and another 26% say they’re not sure of their company’s interest in cloud computing.
Of course, there are pros and cons of cloud computing for the users. Key concerns that logisticians cite in relation to cloud computing include security, system reliability, privacy, and backup plans. On the other hand, companies that are strongly considering cloud solutions say ability to access from anywhere, bandwidth, capacity, and the fact that current supply chain management software providers are swiftly moving in that direction, are driving their decisions.
There will always be negative opinions for any technological advancement, but what are the real advantages of clouding which has already become a revolution in our daily lives?
- Real-Time Pricing: Quickly understanding the price associated with every logistics element of your supply chain allows you to control your costs with finesse. Pricing elements within transportation and warehousing can fluctuate based on any number of factors, such as weather, market conditions, or demand. With so much volatility, on the fly adjustments can make or break margins.
- Real-Time Inventory: The inventory you have on hand is your most direct means of controlling for risks and optimizing costs. Real-time inventory management allows you to maximizing your ability to respond to demand fluctuations while holding onto your buffer against emergencies. Data flow from the cloud gives you infinitely more precise control over your inventory levels.
- Equipment and Utilization Patterns: Within any repetitive system, pattern recognition is essential to optimization. Cloud-integration allows metrics to be taken and analyzed in a myriad of ways to expedite making those patterns apparent within shipping and procurement. From how equipment is utilized to the most frequent freight movement, cloud-based software systems help discover patterns and utilize them to better capitalize on abundance or eliminate wasteful excess.
- Accurate Merge in Transit Model: When trying to coordinate the union of a number of components from several suppliers, possibly from all over the world, synchronizing processes is paramount to efficiency. Within certain situations, having processes synchronized down to the hour might be required. Logistics solutions that allow for real-time monitoring through the cloud makes accurate models of merge in transit possible for the first time.
- Office Resource Flexibility: Cloud-integrated logistics not only provides more data in real-time, it makes it accessible to your entire team, regardless of location or time. Universal accessibility makes processes that require round the clock oversight far more easily handled. Logistics managers can observe processes in real-time from remote locations and allows immediate resource deployment in case response is needed.
Despite the unanswered questions surrounding cloud-based supply chain software offerings, adoption rates for this web-based, vendor-hosted deployment model are clearly on the upswing. By the end of 2016, analysts predict that roughly 40% of supply chain applications will be delivered in the combined cloud, which encompasses public and private clouding.