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Written by Skill Dynamics

Five Ways the Cloud is Changing Supply Chain Management

There is no doubt that the accelerating pace of change in business shows no sign of slowing down. Customers now have high expectations, products are updated and introduced faster than ever, new companies are cropping into the market daily. In such conditions, a lack of agility and scalability can cost an organization dearly. This explains why technology is now playing an essential role in today’s evolving corporate world. Cloud computing technology has been introduced and many companies are opting for it to ease their operations, especially in the supply chain.

Cloud supply chain management

The Cloud has enabled supply chain management providers to make the most of a new era of processes, specifically those relating to the ethereal space. Previously, supply chain management has relied on physical, in-person processes and now the use of modern technology is the key to effectiveness.

cloud supply chain
cloud supply chain

So how is cloud computing technology impacting supply chain management?

  1. Cost Reduction

What about cloud supply chain? The first and foremost impact of cloud is on cost reduction, which is what every organization strives for. With the power of cloud, a company can reduce its operational costs significantly. This can be done through the automation of monotonous back office tasks which in turn ensures that employees are productive in more important tasks. For instance, this can be achieved through the natural reduction in shipping times and duplicate orders that will come about when integrating with an automated shipping platform. Many companies have understood that an automated shipping platform with a Warehouse Management System will lessen their processing cost per order. In fact, the more you automate, the more your staff are effective and productive and the more your processing costs decrease.

  1. Integration

It is essential that your supply chain is consistent throughout the user experience and this depends on the ability to integrate across multiple platforms. The cloud allows you to make Electronic Data Interchange possible (EDI) which standardizes and automates things like invoices and purchase orders, which can later be shared electronically between trading partners. Integrating such technologies remove the need for masses of manual data entry, breaks down data silos and eliminates human error. For example, if you use EDI within the shipping process it can also facilitate improved shipping rates by integrating with a number of systems, such as those of 3PL providers, once integrated it can then determine the least expensive way to fulfill an order.

  1. Data Analysis for Business Intelligence 

Today, data is everything. The supply chain cloud has the ability to organise and analyse data at a speed far beyond manual human capability, which can give the retailer a competitive edge in the market. From warehouse management to customer retention, the use of data proves to be highly efficient. You will easily get to know how much stock to order for a particular product or even if there are serial returners in customer database that should be excluded from discounts and promotional materials. In a recent study by Brightpearl, conducted on more than 200 US & UK retailers and over 40% of the retailers, they found an increase in intentional returns which they indicated had a strong impact on their margins. Such data is key to anyone that wants to stay competitive within their industry. Through a good analysis of customer behaviour, businesses can adapt their strategy to give the optimal experience for the customer without compromising their profit margins.

  1. Sustainable Scalability 

Another advantage of a supply chain cloud based solution is that it can grow along with your business in a highly cost effective manner. For instance, if you need to increase production in a small time frame, then you won’t be worried about whether or not you have that processing capability, no doubt your provider will have a pricing structure that makes it easy to expand. Besides, analysing data will provide you with the information to fix inefficiencies within your supply chain, therefore contributing to your growth. The cloud allows for sustainable growth, at your own pace.

  1. Convenience

Convenience is something all consumers look for. They expect visibility at every step of their purchase, speedy updates, ease of use and total accessibility have become the norm. According to a recent survey conducted by Brightpearl, over 70% of online shoppers would search for an item elsewhere if it was unavailable, rather than wait any length of time for it to come back into stock. Customers increasingly want their products to be delivered as quickly as possible, and it all starts in the warehouse. This can be done through automatic warehouse routing and automatic fulfilment which are the key drivers behind getting an order processed and delivered to the customer quickly. According to a report from Alix Partners the maximum delivery time that the average US shopper will contemplate is now only 4.5 days, and with the advent of Amazon’s one day delivery we can expect to see this figure continue to drop.


The role of the cloud in today’s supply chain is becoming more and more important as companies recognize its efficiency. With the development of the cloud, companies now have quicker and more efficient data access to their supply chains. Businesses of all sizes can benefit immediately by upgrading to cloud supply chain management service model, which makes them free of repetitive, mind-numbing tasks. Employees are finally able to really focus on increasing company profits and enjoy peace of mind about the operation of their supply chains. See also – supply chain trends.

Skill Dynamics