The next transformative opportunity is adopting cloud-based platforms for supply chain management. These platforms empower supply chain professionals with real-time communication and information sharing, enhancing transparency and problem-solving and giving them more control over their operations.

Cloud-based collaboration tools are transforming supply chain management in significant ways. One of supply chain managers' most complex challenges is achieving transparent collaboration with multiple global suppliers and accessing real-time information simultaneously. Leveraging cloud-based platforms and digital tools makes it possible to track orders end-to-end in real-time, access data needed for efficient problem-solving, and communicate and coordinate with one or more suppliers throughout the supply chain. They are the next generation of supply chain management tools for seamless and efficient supply chain management.

No More Isolation

In traditional supply chains, each part works in isolation with limited data sharing. The manufacturer, warehouse, logistics, delivery services, order management, and other operations are not seamlessly coordinated. Cloud-based platforms change this by fostering a sense of unity and collaboration. With everyone in the supply chain and the buyer using the same cloud-based platform and digital tools like shared dashboards for collaboration, supplier relationships are strengthened, problems are detected earlier and resolved more efficiently, workflows are optimized, and efficiency is enhanced.

There is no more isolation in the supply chain. For maximum effectiveness, cloud platforms are integrated with communication tools. They include messaging, video conferencing, and task management to streamline communication. These digital communication tools support efficient and on-demand communication so that supply chain issues can be promptly addressed, along with the ability to share documents as necessary.

Many Benefits of Cloud-Based Platforms

Data rules today, but the challenge is accessing the data needed for good decision-making. Cloud-based platforms support the ability of supply chain managers and suppliers to make decisions faster based on the most current data and information. In today's dynamic business environment, the ability to adapt quickly to market changes is imperative. Real-time analytics can detect risks due to market changes, natural disasters, or supplier failures and support supply chain strategy development and contingency plan execution. Risks can be minimized through information that would be slow to access without a cloud-based system.

In addition, operations can be streamlined because efficiency is improved. The cloud-based supply chain management system can use machine learning algorithms to detect supply chain anomalies like shipment delays and inventory shortages and send real-time alerts. Machine learning, a subset of AI, enables the system to learn from data and make predictions or decisions based on that learning, thereby enhancing the system's efficiency and accuracy. The cloud system is also scalable up or down based on operational needs, avoiding the cost of excessive IT infrastructure.

Another advantage of digital collaboration tools in a cloud-based system is better collaboration between the buyer and suppliers, which fosters innovation. Staying competitive today requires the ability to innovate. In traditional supply chains, some suppliers can contribute innovations but lack an easy way to approach buyers. They are “lost in isolation” in dispersed siloed supply chain operations with minimal integration. An integrated supply chain promotes innovation through collaboration at less cost and in real time.

The Real World of Cloud Supply Chain Management

Many companies are already using cloud computing platforms to transform their supply chains. Proctor & Gamble is an early adopter and continually finds ways to leverage cloud computing to benefit suppliers and customers. For example, in its India-based business, sales increased by $400 million between 2019-2024 due to what it calls supply chain 3.0 initiatives to implement end-to-end supply chain transformation. Cloud computing enables companies to escape the piecemeal approach that was historically used by adding multiple systems. One of P&G’s transformation strategies included geotagging deliveries to collect data via the cloud computing platform. Dynamic tracking tools like IoT-enabled cloud platforms can track shipments, inventory, production, and orders in real-time. With AI and machine learning distributor ordering, P&G can predict distributor shipments and replenishment needs.

Lockheed Martin, a global aerospace and defense company, leverages cloud-based supply chain solutions to manage its complex supply chain. This enables the company to respond quickly to changes in demand and industry disruptions. Real-time analytics tools leverage cloud computing to adjust demand forecasts dynamically based on incoming data. The company experienced a 15% reduction in disruptions in its supply chain.

A food service supply chain company serves over 10,000 franchise stores in the U.S. When the onsite server provider continued to experience too many outages, bringing the fulfillment website down, the food service company was challenged to serve its stores promptly. The company also had a variety of unaligned legacy systems that were becoming outdated. A new SAP infrastructure was created using a cloud solution offered by Deloitte Cloud Managed Services. All managed service applications were built into one provider, creating a smooth and transparent integrated architecture. Business disruptions were minimized, and costs were optimized. By using one provider, problems get solved faster, providing a sense of relief and ease.

These three examples show that implementing cloud-based systems for supply chain management does not have to occur all at once. Systems can grow with the company, adding features as needed.

Creating a Connected Supply Chain

Cloud-based tools are transforming supply chain management by creating a more agile, connected, and responsive ecosystem, which is critical for addressing modern challenges. Cloud-based platform providers offer options for businesses of all sizes.

For instance, Oracle Fusion Cloud Supply Chain Planning offers comprehensive supply chain planning capabilities, including demand management, inventory optimization, and supply planning, all integrated with real-time analytics. SAP S/4HANA Supply Chain Management provides end-to-end supply chain visibility and control, with features such as predictive analytics and intelligent automation. Microsoft Dynamics 365 Supply Chain Management platform is cloud-based and uses natural language processing-based AI capabilities to provide insights and recommendations for improving supply chain operations. These cloud-based supply chain management systems are modernizing supply chain management, which is good for buyers, suppliers, and customers.