The concept of a supply chain was born out of the creation of the assembly line, dating back to the early 20th century. Each function, from planning to delivery, had its place. And if everyone did their part, just like a well-oiled machine, manufacturers could expect high margins and growth. It worked so well that as manufacturers modernized supply chain management, introducing technology and automation to help them move faster and smarter. But the foundation of supply chain was still tied to the original linear, siloed, rigid approach of early mass production.
The problem is that today’s world looks pretty different than the business landscape of 1905 — or even 2015. Optimizing at the functional level, with a focus on achieving the lowest cost, will no longer produce the best possible results for the organization. Walled-off systems can no longer handle the pace of change — or deliver the agility necessary to keep up with customer demand shifts, market disruptions and growing supply chain complexity.
Businesses leaders across industries know they need a new approach. They want a supply chain that’s modern, resilient and fully optimized to deliver the greatest possible profit to their organizations. Who wouldn’t?
The challenge is, where do you start? This blog post will walk you through the key steps you should take to increase supply chain resilience and profitability — by shifting to the cloud and taking full advantage of the technology innovation available today.
Step 1: Use the cloud as a launchpad for digital transformation
Enterprises today want a supply chain that’s modern, resilient and fully optimized. To get there, they must first make a leap over to the cloud. By shifting from on-premises computing resources to the cloud, businesses can achieve a significantly higher level of agility and speed, which enables them to pivot and shift on the fly in response to supply chain disruptions.
Businesses also gain the ability to consume innovation faster and cheaper. With on- premises technology stacks, it’s time-consuming and expensive to upgrade to new functionality. But on the cloud, this can be done in minutes or days, versus months or years. And finally, companies are able to process information — running scenarios across merchandising, manufacturing, logistics, warehousing and distribution all at the same time, with unconstrained computing power. They can scale up and scale down quickly, on-demand. Rather than using one CPU for 100 hours, companies can use 100 CPUs for one hour, compressing planning time from days to minutes. They’re no longer constrained by long batch cycles, and they can finally put their investments in artificial intelligence (AI) and machine learning (ML) to better use.
This speed and agility in decision-making will be a pivotal aspect in determining supply chain winners and losers in the years ahead. Those organizations that can spin up a new scenario based on real-time market factors, and execute on that scenario in minutes, will gain a competitive edge.
While cloud gets talked about a lot in supply chain, the concept of cloud computing has still struggled to really get traction for a handful of reasons — most notably integration and data challenges. This brings us to Step 2.
