Cloud-Based Vs Localized Supply Chain Management

By Gokul Siddharthan J, DCMME Graduate Student Assistant

Cloud Based Supply Chain

A cloud-based supply chain management provides numerous advantages over a localized model. The cloud makes the system more efficient, affordable, infinitely scalable, safer and easier to integrate into the current systems. Also, Cloud-based solutions have low initial investments, quick to deploy, continuous upgrades, and low maintenance. The shortfalls of a rigid localized supply chain management make it not suited to the dynamic challenges of today’s business needs.

A localized system limits the innovation that a company can do. The investment that’s required to constantly upgrade and maintain fluctuates and can strain a company’s resources, which can be focused on product innovation. A rigid supply chain may not just hinder the growth but also risk that company’s survival.

Cloud-based systems are more affordable and they come along with capabilities that are expensive in localized systems. The scale of the cloud companies can drive down the prices and increase the capabilities offered as their customer base increases. Such systems require new systems administrators, complex infrastructure, expensive equipment that aren’t feasible for an individual company. Affordability along with a constantly upgraded supply chain management system offers benefits far more than localized models.

These systems are more efficient with the power of automation and data analysis. It can be used to identify and eliminate wastes in the flow of information and goods by making the system more transparent and providing less strain on the budget. The fear of downtime or data loss that could result in loss of profits is eliminated. A cloud-based model has more redundancy and better fail-safe methods that suffer less damage than localized models.

Another big benefit of the cloud model is the transformation can happen at a slower pace. You can select which part of your supply chain is required to go into the cloud to deliver the best value. The migration can be prioritized and implemented at a speed which is deemed comfortable for the organization. The management, maintenance and upgrades can be outsourced to the service provider, and since they are providing it at a large scale the costs are driven down substantially. Other benefits are an easy to use interface, an intuitive user experience, better analytics, all of which can be accessed online from anywhere at any time from any device.

A cloud-based model eliminates most of the routine everyday tasks and is a step forward in continuous improvement, allowing the company to focus on the tasks that truly matter. Most businesses can benefit from updating their supply chain model to cloud-based, thus improving their ability to stand out in the competition.

Sources:

https://www.scmr.com/article/why_supply_chain_leaders_are_moving_to_the_cloud

https://cerasis.com/cloud-based-supply-chain-management/

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