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Editor's Blog

How the Cloud Impacts Supply Chain Management


By Amanda Peterson

Businesses around the world have realized the benefits of integrating cloud-based solutions into their supply chain strategies. In fact, some studies show a 75 percent increase in efficiency and profitability for businesses who make the change. Although cloud deployments in the supply chain have historically lagged behind other sectors, that is quickly changing. From retail corporations to automotive manufacturers, many organizations are recognizing the many benefits the cloud can have on their supply chain operations. In an interview with Forbes Magazine, Oracle CEO Mark Hurd suggests that emerging cloud technologies provide a solution for “reducing costs and increasing innovation.” 

When organizations integrate cloud-based solutions into their supply chain management systems, they can do more than reduce costs and increase innovation. Here are just a few ways in which the cloud positively impacts supply chain management: 

Support Growing Operations

One of the cloud’s greatest benefits is its scalability, meaning that it can handle growing or diminishing resources to meet business demands. For example, as a business experiences growing demand for a specific product, the respective supply chain management provider may need to increase production by factors of five, 10 or more. The cloud can accommodate the necessary bandwidth and processing capability that each new order requires. Within minutes, the supply chain management provider can extend the services of the cloud to meet new growth. 

Reduce Costs

As Hurd suggested, cloud technology reduces operational costs for the supply chain. Employing cloud resources eliminates the need for businesses to invest in substantial hardware and software expenditures. Additionally, cloud-based solutions can reduce the amount of workers needed to perform certain tasks. The cloud can be used to perform administrative duties, like generating reports, whereas employees can be reassigned to other aspects of the supply chain.   

Improve Competitiveness 

Cloud-based solutions can help businesses best their competitors by increasing internal efficiencies. Because cloud solutions are cost effective, they’re accessible for small and large businesses. Cloud-based platforms are more affordable than their on-premises predecessors. The cloud’s scalability, cost efficiency and ability to help small businesses maximize their supply chain capabilities, make it a great tool for businesses who want to operate at greater capacities than they could before. As competition between small- and medium-sized businesses and enterprise corporations increases, cloud-based solutions can give the underdog a fighting chance, helping small businesses become more agile and quick to respond to problems. 

Amanda Peterson is a contributor to Enlightened Digital and software engineer from the one, the only New York City. When she is not trying to find the best record store in the city, you can find her curling up to watch some Netflix with her Puggle, Hendrix.

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