During the Covid-19 pandemic, the concept of a supply chain has become much more visible to the public. Suddenly, food and other necessities, such as toilet paper, disappeared from store shelves. At first, this seemed much like temporary shortages we had seen before, caused by winter storms, floods, and hurricanes. But once it became clear that some of these shortages weren’t going away quickly, and that the problems were worldwide, not just local, then the realization set in that there were much bigger issues at play.
The problems caused by an inability to deliver enough computer chips, building supplies, and automobiles were felt by most consumers, bringing supply chains and their challenges to the forefront of the news and government.
Who Do Supply Chain Disruptions Impact?
It isn’t only consumers who have suffered from supply chain disruption. All the companies that are trying to get those products onto store shelves or into customers’ hands have experienced challenges as well.
When a company cannot live up to customer expectations, such as ship dates and product availability, it tends to erode the customer’s trust in the company. This process happens again and again at all the links in the supply chain. One manufacturer cannot get the raw materials, so it cannot supply its product to the next company, which cannot deliver to the retail store, and so on.
Organizations that pride themselves on customer service and customer retention are left scrambling to keep those customers. We can get away with blaming the situation on the pandemic or other factors “beyond our control.” However, at some point, people get tired of hearing that and just want us to figure it out and deliver what we promised.
How Can Technology Help the Supply Chain?
As is often the case with complex problems, such as supply chain disruption, at some point, executives will turn to the CIO and ask what technology can do to help. Fortunately, there are several innovations that can be used to get a handle on supply chain issues.
Those companies that invested early in adopting these technology solutions have already experienced an advantage over their competitors that are only now realizing the need for such investments. The technologies that have been most impactful in helping companies develop a more resilient supply chain, which can withstand and bounce back from both short-term and long-term disruptions, are provided through cloud-based solutions.
Here are a few ways that cloud computing is such a good fit for a resilient supply chain:
One of the fundamental causes of supply chain issues is the inability to adapt to changes in demand. If you have traditional systems that are perfectly adequate for a consistent demand, it can be difficult to quickly expand if there is a sudden spike in demand. Conversely, if you build your system to support a high demand, then decreased demand could mean that you have wasted resources and costs, which may eat up any profit you would have made.
Cloud-based systems are designed to be scalable. That is, you can increase or decrease the resources depending on the current need. These changes can also happen quickly to ensure that you are only using what you need when you need it.
The global supply chain is distributed across multiple continents. It is important to be able to access the systems and data from anywhere. Additionally, the systems themselves need access to the sources of their data, which is often spread out across the country or the world.
For instance, oil companies have sensors that are collecting data from the oilfields and pipelines. Trucking companies need to know where the packages are at any time. Manufacturers have IoT devices collecting data at various plants and warehouses. Cloud-based systems are able to provide connectivity and compute resources close to where you need them. This was much more difficult with traditional systems.
The cloud solution providers are putting a great deal of research and funding into developing solutions that are targeted to various verticals. For instance, Microsoft, SAP, Oracle, and many other companies have created manufacturing cloud offerings that are specifically tuned to the needs of that industry.
Rather than needing to take a generic solution and try to find ways to make it meet your company’s needs, you can look at the countless offerings that have already been implemented and proven to find and tackle supply chain issues. These solutions use AI and machine learning to analyze business data for the purpose of improving forecast accuracy.
It’s clear that the shortages caused by supply chain issues are still with us, and will most likely remain for some time. Even if Covid-19 someday becomes a thing of the past and our supply chain becomes more stable, it’s important to put in place measures that will help prevent such a massive disruption to society. Cloud technology, which — by many accounts — is still in its infancy, is sure to play an important part in the effort to develop a more resilient supply chain.
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