Author: Paul Bell, Chief Experience Officer,Yojee
In supply chain everything is changing, including increased customer expectations, shorter product lifecycles, and shifts in demand, among many other factors.
In earlier times, the business environment was more stable. In such conditions, with more predictable business cycles, effective supply chain teams built strategies focused on establishing low-cost manufacturing locations distant from their consumers, rationalizing the supplier base, and reducing stock with lean methodologies like just-in-time (JIT) deliveries.
In today’s environment, the old strategies need to be redefined for the supply chain to be considered a digital supply network that integrates the physical flows of products and services, talent, information, and finance.
Companies look at moving their supply chain into the cloud in search of the following, based on Supply Chain Digital research:
1. COST SAVINGS
A key benefit is that you obtain cost savings through a reduction of your operational expenses (OpEx). This is achieved with the automation of menial tasks that, at the same time, allow for higher efficiency and accuracy.
Examples are the reduction of shipping times and duplicate orders that are avoided by using automated shipping platforms such as Shopify, ShipStation, and Shippo. The integration with a Warehouse Management System (WMS) and with a Transportation Management System (TMS) lower your processing cost per order to great extent. With higher automation, you free up resources to focus on more strategic tasks together with an increase in efficiency and accuracy. In short, you do more and better with less.
With the cloud, the integration goes beyond the four walls of your company. It is all about your network. Removing the silos within your organization is not enough. The cloud facilitates Electronic Data Interchange (EDI) which helps with the transmittal of invoices and purchases orders electronically among the participants in the supply chain.
When EDI is integrated with your ERP, there is no manual input, which means no human errors. In the case of shipping, integration may lead to savings. If EDI is integrated with the systems that your 3PLs are using, it can show you the lowest cost for the fulfillment of your orders.
3. POWER OF DATA AND ANALYTICS
Having your supply chain in the cloud provides you with powerful data analysis and analytics at an incredible speed that manual human capabilities cannot match.
This data power can provide you with a competitive advantage or edge, and in many cases, it is vital for your business survival. Data helps you to build your strategy from warehouse and logistics management to customer service and customer retention. It helps you to answer when and how much and you need to order for a particular SKU, quantify the impact of a promotion, what the lowest cost for shipping is while meeting your customer’s requirements.
The cloud-based solutions offer data analytics which may include data analysis, predictive analytics and prescriptive analytics. If you take logistics as an example, data analysis provides you with information about past shipments, such as a comparison between ETA and actual arrival of shipments as well as planned cost against actual cost. Predictive analytics goes a step further and anticipates when your customer will receive the order. With prescriptive analytics, the system will make the decisions based on the rules you set. It will award a shipment to the lowest bidder, for example.
You grow together with your cloud-based solution. This is a fundamental advantage that allows for real scalability. It adapts to the needs of your business. This is why cloud-based solutions are cost effective as opposed to on premise solutions in which you need to determine if they have the processing capacity to accompany your growth and incur high overhead costs.
5. AGILITY AND RESPONSIVENESS
Consumers have higher and higher expectations. They want their orders processed and delivered fast. With the upcoming Amazon’s one day delivery, consumers will demand even more from the supply chain.
To meet such increasing customers’ expectations, supply chains need to become agile to respond to changes fast. Visibility of the network – beyond your organization – is fundamental. How can you achieve this visibility?
The answer is a control tower. Control tower is defined as a central hub with the required technology, organization, and processes to capture and leverage transportation data to improve visibility for the short-term and long-term decision making.
CONSIDERATIONS FOR MOVING YOUR SUPPLY INTO THE CLOUD
- Focus on high-value processes to streamline. This implies evaluating processes for potential impact, business criticality, and capability gaps. Oracle suggests targeting those for transformation.
- Build better, faster collaboration for better supply chain performance.
- Reduce SCM costs and help companies create new revenue streams.
- Be mindful that the fundamentals of supply chain remain unchanged and set KPIs and metrics.
- Be aware and prepare to minimize downtime.
- Mitigate the risks of data loss.
- Plan and manage resources effectively.
At Yojee, we feel that when someone engages our software platform to help transform their logistics function, we focus on their holistic migration, onboarding and success to help them drive value from their investment. As we walk hand in hand with you in this major transformation, your ROI will be greater with our safe, proven, and step-by-step rollout.