Can the Cloud Really Improve Logistics Flexibility?
Martin Pahulje - April 01, 2021
A flexible supply chain logistics management system should be efficient and contain end-to-end visibility. Supply chains are ever-changing and combating disruptions, so logistics flexibility is crucial to overcoming challenges quickly and at low cost. While organizations recognize this, many still struggle to overcome large areas of waste and mismanagement and are looking to new software to overcome it. One of the most valuable pieces of tech architecture is that of cloud computing.
With the ever-growing cloud computing capabilities, companies are eager to implement it into every aspect of their organization, especially their supply chain. When thinking of what cloud computing is, many organizations still only consider the technology that it revolutionizes. While this is a significant aspect of the cloud, it’s not its exclusive use. Companies are inquiring about the cloud's ability to go beyond physical technology and innovate their supply chain logistics as a whole – achieving advanced flexibility and visibility. If this can be done, it will reinvent how businesses plan and manage their supply chain operations. So, the question is, can the cloud improve logistics?
The Short Answer: Yes
You read it; the answer is yes. Cloud computing has revolutionized supply chain management software and is now breaking into logistics. Today more than 50% of logistics providers use cloud-based services, and 20% have plans to implement it in the near future. This is a significant portion of the industry, which may hint at the advantages of cloud computing in logistics. There is no question that cloud-based solutions are essential to maximizing the value of your operations, but it may surprise how evident its improvement of logistics is. We’ll take you through the key benefits of cloud-based logistics management, so you can see for yourself how the cloud will improve your logistics flexibility.
One of the greatest benefits of cloud computing in the logistics industry is forecasting. Using a cloud-based solution such as an Integrated Business Planning Systems (IBP) software can offer up-to-date demand and transportation planning relatively rapidly, thus reducing internal internal processes and an investment in expensive APS systems. Instead, the cloud solution is scalable modular structure (which allows comparatively fast assembly of individual solutions from standardized building blocks), A cloud solution enables rapid implementation via an API and flexible solutions to ensure that you know exactly when products need to be where, so you can prepare transportation in advance to ensure timely delivery. This will save you significantly, not only reducing the cost of last-minute preparations but also allowing you to utilize storage in the off-season to pre-load future supplies.
With better planning, you will be much more flexible when disruptions arrive. While it can be costly to back-stock too heavily, forecasting will provide you with a reasonable amount of inventory in-stock to defend against shortages. You will also have real-time warnings of stock depletion, fuel shortages, shipment rerouting, and more, giving you more time to adjust accordingly. Speaking of real-time information, this leads us to our next benefit.
Real-time: Pricing & Inventory
Costs in the supply chain are dependent on every aspect of the value network, so it is crucial to manage them from the beginning. Understanding the price associated with every logistics element is critical to controlling costs with finesse. This is a significant challenge for many organizations as supply chain pricing frequently fluctuates, depending on market conditions, demand, and even weather. As a result, real-time pricing can make or break your margins, and cloud computing will equip you with that. In tracking high-risk elements of the supply chain, you will be prepared for drastic price changes from suppliers, weather patterns, and transportation delays, allowing you to quickly communicate if price adjustments are necessary on your end.
Additionally, cloud services will allow you to manage your inventory in real-time. With automated technology, you will have constant access to your inventory, providing you the information you need to manage storage, shipments, and supply. You will be able to quickly respond to demand fluctuations without the potential of wasting inventory for emergency buffers. The data flow provided from the cloud will furnish you with the inventory monitoring and control that is necessary to minimize costs.
Manage Multiple Systems
Transportation management systems (TMS) and warehouse management systems (WMS) are instrumental to controlling procurement and shipping in the supply chain. However, multiple systems and multiple users can get complex and increase the risk of human error. Additionally, these systems can give you conflicting information, providing various transportation and cost options, which can be timely and challenging to differentiate. With cloud solutions, you will reduce the number of various software programs used and better coordinate information from the ones you need. With more transparent and less contradictory information, you will be able to make more precise decisions faster. In improving communication, you can prevent delays caused by miscommunication or missed opportunities due to conflicting data. With the development of new software and technology seemingly every day, it is incredibly beneficial to implement an overarching system such as the cloud to have your supply chain solutions working cohesively.
Equipment & Utilization Patterns
For repetitive systems such as logistics and supply chain operations, it is vital to have technology that can recognize patterns. Cloud computing takes and analyzes metrics in various ways to perceive patterns in the supply chain, expediting future supply chain operations. These metrics include information such as how data is utilized, the most frequent freight movement, and the most common products and materials used. The patterns recognized are then delivered to the user so that they can capitalize on operations, increasing abundance or eliminating wasteful excess. The information in these patterns will give you the information required to improve logistics, determining everything from where bottlenecks commonly occur to transportation routes that see the most delays.
Furthermore, recognizing patterns will prepare you to synchronize processes. Numerous behind-the-scenes operations are running within a supply chain at any given time, so identifying patterns such as receiving shipments from suppliers will equip you to synchronize these processes in the future. With the combination of pattern monitoring and forecasting, you can maximize the value of your resources through careful coordination, saving your organization valuable time and money. As supply chain and logistics planning are all about optimization and efficiency, it's paramount to analyze the patterns and synchronize operational processes to continuously improve upon them.
The final benefit we will discuss brings us back to the beginning; flexibility. In addition to cloud-integrated logistics providing data in real-time, it also makes data accessible to your entire team, no matter the time or location. Universal accessibility eases the strain of managing processes that require round-the-clock insight, especially for organizations spread across various time zones. Logistics managers will have access to projects in real-time from a remote location and still have access to immediate resource deployment if a response is needed. Your entire team will have complete control of critical processes at all times, increasing the flexibility of implementation and management.
As well, as mentioned earlier, cloud computer enables tried and tested services to be bundled up into independent, flexible modules. Customers can then easily combine different modules: for instance, a microservice can be implemented quickly and reused. For a company such as flexis, the goal is to make these types of services available in cloud app stores of large public cloud operators such as Amazon (AWS) or Microsoft Azure.
Supply chain logistics management is a complex task, but cloud-computing will optimize it in a plethora of ways. Improving features such as pattern analysis, control of multiple systems, and real-time information gathering will increase logistics efficiency and flexibility like never before.