As a result of the pandemic, the vulnerabilities and weaknesses in many businesses’ supply chains were brought to light. But even before 2020, businesses had been dealing with unpredictable trade policies, increasingly complex consumer preferences, shorter-than-ever product lifecycles and rollout times, and various other supply chain issues. To compete – and thrive – in this challenging landscape, many business leaders are taking a closer look at their current supply chain operations, with the urgent goal of making them more resilient, efficient, and cost-effective.

A recent, in-depth report from Oxford Economics revealed – somewhat unsurprisingly – that “Business works best when every part of an organization, including its external partners and customers, is agile and interconnected.” This is especially true of supply chains, as they are comprised of so many interdependent moving parts.  

The traditional linear supply chain is (as the saying goes) only as strong as its weakest link. Traditional supply chains often contain gaps and silos where supply chain managers simply lose sight of their partners, as well as the goods and materials they’re responsible for. But when supply chains are connected – when everyone from the raw goods supplier to the delivery driver are part of the same network – the opacity is removed. Cloud solutions help to innovate processes across every link in the chain, from planning and sourcing to manufacturing, distribution, and logistics. These modern supply chain technologies help to connect all the teams and moving parts across the business, to automate processes and functions, and, ultimately, to help solve many common supply chain issues. For today’s businesses, cloud supply chain solutions help to power a more intelligent, scalable, and resilient supply chain, which drives growth and competitiveness across the company.  

Cloud solutions help to innovate processes across every link in the chain, from planning and sourcing to manufacturing, distribution, and logistics.

What is cloud-based supply chain management? 

Instead of a serial view of the links in a linear supply chain, a digitalized, cloud-based system views the supply chain as a connected network. This “network” view of the supply chain makes it easier for teams to work together more collaboratively and helps to minimize risks the moment they present themselves. The connectivity of a cloud-based system coupled with the power of artificial intelligence (AI) and machine learning means that the more data that goes in and out of the supply chain network, the better the accuracy when it comes to demand forecasting, automating processes, and orchestrating the myriad of moving parts that make up the operation.  

When a cloud-based system gives supply chain managers real-time visibility across the entire network and all its partners, it’s referred to as a supply chain control tower. The data captured from all devices and systems within the network is on a 24×7 cycle. All the incoming and outgoing data must be captured, analyzed, and understood – mostly in real time. This is why cloud connectivity is so essential to the functionality of the best modern supply chain solutions.

Why is supply chain visibility so important in today’s economy?

Supply chain visibility is the ability to track products and all their components, from raw materials to their arrival at the customer’s front door. Maintaining visibility within a company’s own operational borders can present a significant challenge. However, when overseas supply, manufacturing, and logistics partners are brought into the mix, it can become very difficult to keep everything in view. To achieve meaningful and accurate supply chain visibility, today’s best businesses use cloud-based supply chain technologies to provide real-time data across all their operations. With the centralized, cross-business visibility that smart supply chains bring, businesses can achieve greater efficiency and responsiveness while better mitigating supply chain issues.

Screenshot showing supply chain visibility
Process visibility can help solve the most common supply chain issues.

Supply chain planning, demand forecasting, and inventory management

Supply chain planning is a forward-looking process that helps to synchronize and optimize all the links across the supply chain – and the business functions that support them. This includes sales and operations planning (S&OP) as well as managing inventory along with supply and demand. It has always been a tough challenge for supply chain managers to strike an accurate (and profitable) inventory balance. Cloud-based supply chain solutions with AI and machine learning at their core help businesses add accuracy and speed to their demand sensing and demand forecasting strategies. Complex data sets can be analyzed quickly and sudden risks or trends can be captured and acted on in real time. 

Supply chain analytics: What you don’t know can hurt you

Advanced supply chain analytics helps businesses get a more accurate understanding of both known and unknown risks. Using analytics, supply chain managers gain the ability to gather and process data with speed and flexibility. These data sets can come from customer behaviors and feedback, news and market trends, as well as real-time input from Internet of Things (IoT) devices and assets across the breadth of the supply chain. 

Additionally, many businesses do not have a clear idea of what is going on in the lower tiers of their supply chain, particularly when they are geographically dispersed or remote. However, it is within these tiers that many of the worst potential risks and supply chain disruptions may lay hidden. Supply chain analytics can process data curated from a wide range of sources to help businesses choose and verify the best suppliers and partners in the first place and to warn if risks are imminent.

What is on-demand logistics? (Hint: Shipping meets ride share)

The Amazon Effect refers to the increasing demand for both B2C and B2B customers to receive speedy or next-day delivery. A 2021 research article in Harvard Business Review reminds us that “E-commerce success depends on the last mile. Today’s consumers aren’t keen on excuses, especially when it comes to accessibility, affordability, and convenience.”

Modern businesses are learning that no matter how terrific their products and services may be, their ability to compete very much hinges on their logistics performance. On-demand logistics solutions mean that companies can deploy freight and delivery options where and when they are needed, giving businesses access to a robust and distributed shipping network without having to pay for the upkeep of a large fleet sitting idle when not needed. 

See how Uber and SAP are collaborating to deliver on-demand logistics. Learn more.

IoT networks help solve your supply chain issues

Cloud-based supply chain solutions underpin IoT networks, allowing companies to communicate in real time with all the mechanical assets across their operations. When augmented with smart technologies like machine learning, these software solutions can not only gather and manage vast amounts of complex IoT data, they can also analyze and process it on demand to deliver powerful insights and recommendations.

For example, a McKinsey report shows that when IoT networks deliver predictive maintenance intel, it typically reduces machine downtime as much as 50% and increases machine life by up to 40%. Additionally, AI and machine learning tools can use IoT data to help to automate more efficient and resilient processes and workflows – even learning from experience to be increasingly accurate and predictive over time. 

Translating supply chain optimization into measurable business benefits

A 2020 article in Forbes states that “Companies don’t have crystal balls. They do, however, have the next best thing: data. By digitizing their factories and supply chains in ways that facilitate data collection and analysis, enterprises can mine past and present operations for intelligence that helps them predict future business outcomes.” And the beauty of intelligent cloud-based solutions is that from the moment you start using them, they begin to capture and deliver the very data that businesses need to attach ROI and quantifiable benefit to their software and operations investments.

Here are some of the main cloud-based supply chain benefits:

Supply chain transformation: What are the next steps for your business?

Digital transformation – like all business initiatives – begins with good communication, clearly shared and understood KPIs, excellent change management protocols, and well-planned road maps. A supply chain maturity assessment can prepare you for your transformation journey by determining your current situation and helping set realistic goals and put an actionable plan in place. 

Explore SAP supply chain management solutions

SAP Integrated Business Planning is a cloud-based solution that integrates all supply chain and business planning functions on a single platform.