Cloud-based supply chain software and applications are revolutionizing supply chain management today, scaling operations from small businesses to complex enterprises. Cloud supply chain software solutions are showing significant increases in implementation — so much so that not having one in place makes you an outlier.
Through our research, several key insights emerged.
The focus on achieving higher supplier quality, forecasting accuracy and inventory optimization while driving down manufacturing cycle times are priorities today. As a group, the senior management teams leading supply chains recognize the urgency of reaching these goals as quickly as possible. Due to the quick nature of deployment and configuration of cloud supply chain software, more manufacturing teams view the cloud as a fast path to accomplishing goals.
- Gartner expects that by 2020, over 90 percent of spending on supply chain execution systems will be for cloud supply chain solutions.
- By 2023, talent shortages in the supply chain for 75 percent of the top 500 manufacturers worldwide will mostly have been mitigated by the use of supply chain digital assistants.
- Sixty-five percent of surveyed supply chain professionals believe that supply chain management (SCM) technology — including cloud computing — is a source of competitive advantage, according to a recent Gartner study.
- Cloud-based supply chain management software solutions are set to surpass $11B by 2023.
Succeeding With the Cloud’s Speed and Scale
For all manufacturers, recent years show massive upticks in growth. Many were expecting average or slow demand, only to be surprised by the rapid increase in orders and buying activity by existing and new customers. The challenge is managing their supply chains to keep up. Ask a supply chain executive about cloud computing, and they only want to know if it can deliver more speed, scale and accuracy. None of them care about the technology; all they want are results. Cloud applications and platforms are the growth catalysts that will keep improving supply chain performance while catalyzing and fueling global manufacturing growth.
Cloud Supply Chain Software Key Insights
The ten ways cloud computing is revolutionizing supply chain management include the following:
1. Supplier quality management features are delivering real-time updates on the latest inbound shipment inspection and quality levels, making sure the bill of materials (BOM) only defines the highest quality components and raw materials.
Getting a 360-degree view of every quality measurement from start to finish reduces costs and increases customer satisfaction. Cloud-based SCM applications can track and report quality levels by production center, product and customer level. Another benefit of having a cloud-based SCM system is the ability to monitor and trace any assembly, component or subassembly throughout the supply chain in real time. With cloud-based SCM apps and platforms, quality becomes a more pervasive part of the system of record in any business.
2. Applying cloud-based business analytics and manufacturing intelligence allows manufacturing cycles times to improve.
“Manufacturing cycle time” has to do with the time elapsed between an order’s origination until a product is created and stored in inventory. Making improvements to this valuable manufacturing metric requires consistent and clear data.
Cloud-based solutions allow quick gathering and access to data from multiple points across the globe. Without the cloud, sizeable multi-national warehousing operations are stuck operating in accordance with time zones and geographical locations. With cloud computing, any member of any section of the supply chain can access and exchange data with other users. Communication is a fundamental piece of the supply chain, and cloud-computing takes this to the next level.
Improving cycle times starts with knowing why and where delays happen in the manufacturing process. With the real-time applications of the cloud, you can stay at your most competitive. As a product finishes its cycle, the information about its manufacture can lend valuable insight into any possible improvements. Even now, there are software solutions available that provide real-time updates on how a particular product performs and eventually impacts financial results.
3. Using the overall equipment effectiveness (OEE) metric is providing users with the knowledge of which machines and tools are in the best health and if they fit the current production run.
Manual calculation of a machine’s performance and health are time draining practices of the past. With cloud-calculation of OEE, decisions that affect product manufacture can be made quickly from anywhere.
OEE is an invaluable measure of a production machine or tool’s health. It can also be used to measure a product line, production team or an entire production center’s performance. An OEE metric tracks everything you would need to determine a machine’s health, performance and when maintenance is required. This metric, as explained by IQMS, is calculated using a formula that measures availability, performance and quality. Cloud SCM allows for the easy gathering and analysis of OEE data. With no borders between the various networks involved, thanks to the cloud, this data can be sent and received from operations across the globe.
4. Scalable cloud-based applications are automating compliance and reporting so that valuable time isn’t lost by manually preparing industry and government filings.
Compliance with the many rules and regulations of various government or industry institutions affects much of a supply chain. These reports require careful input of data and can drastically decrease the productivity of employees tasked with their creation and delivery.
For medical device manufacturers, cloud-based compliance applications remove the burden of spending their valuable associates’ time cataloging records and reporting them. The U.S. Food & Drug Administration (FDA) requires that every manufacturer maintain device history records to the batch, lot and unit level. A cloud-based application capable of producing federal device history records (DHR) is a significant time saving and competitive advantage. Medical device manufacturers also need to stay in compliance with Current Good Manufacturing Practice (CGMP), CFR and FDA requirements, as well as ISO 13485 and 9001 standards.
Cloud-based computing, while helpful for all parts of the supply chain, is beneficial to niche providers. Each industry has its own set of regulations in place to ensure safe creation and transport of goods. Without quick access to parts of the supply chain, companies with ties to multiple niche industries would see a slowdown due to time wasted filing these types of reports.
5. Attaining real-time track and traceability performance is becoming more achievable with cloud-based applications that scale across supplier networks.
The more production locations a manufacturer has, the more critical supply chain visibility is to maintaining quality levels and gaining data used for product tracking. Cloud-based track and traceability features save many manufacturers from the variable expenses of a product recall by catching product quality problems early.
As your enterprise thrives, the need for rapid scalability increases. Relying on in-house software can lead to wasted resources when new solutions need to be integrated. If your inventory is growing, you need to meet the scaling challenge as quickly as possible. Taking time out of production, or any part of the supply chain, for new software integration and training can be a drain on valuable resources.
Without the need for new software, inventory errors brought on by a transition vanish. Everything in use before the need to scale up will still be in place. If your supply chain was working before you started to take on inventory, scale up and move on!
6. Integrating with diverse applications, databases and systems using APIs (application programming interfaces) is helping to scale manufacturing strategies faster than ever before.
APIs are a factor that’s driving the proliferation of cloud apps and platforms across manufacturers’ many production and plant locations. Serving as the glue between systems, APIs create real-time integration links between systems that enable more efficient data sharing, collaboration and transaction accuracy. Integration costs continued to plummet as APIs became more pervasive and broader in scope.
This ease of integration frees up vast amounts of time that can be spent in a more valuable way. As cloud-based solutions continue to grow in demand, you can expect to see even more game-changing additions included in their software suites. With flexible APIs in place, cloud computing can bring together a variety of different applications without excessive time spent integrating new software into your supply chain.
7. Cloud-based warehouse management systems (WMS) are enabling higher supply chain performance by optimizing order management and production planning across all warehouse locations.
Knowing inventory levels throughout supply chains makes inventory planning and management more efficient for each production center.
Cloud-based WMS and ERP (enterprise resource planning) systems generate data sets over time that show patterns, making it possible to anticipate shifts in demand. Not only does meeting demand keep your inventory moving, but it also fosters fantastic customer relations. With quick demand calculations and easy to access data, demand problems should never come between you and a customer.
These insights allow improved forecasting accuracy, which in turn makes optimizing manufacturing schedules all the easier. Also, with cloud-based WMS, ERP and analytics systems designed to optimize inventory, order management and fulfillment, manufacturers can expect to see profit and revenue growth gains.
8. Reducing order cycle times and rework by automating pricing, quoting and customer approvals with a single integrated system is becoming more common.
Product quality problems often begin when an incorrect or incomplete order gets created. Errors in pricing, quoting, product configuration or delivery instructions all introduce errors, slow down orders and drive down product quality. Automating pricing, quoting and customer approval workflows with a cloud-based application help reduce order cycle times and improve quality. Order accuracy goes up along with customer satisfaction, while delays in paying invoices drop, which reduces days sales outstanding (DSO).
9. Integrating product development, engineering, supply chain management and production planning on the same platform is increasing new product introduction success.
Instead of rushing new products into an initial manufacturing run, manufacturers who excel at product quality are willing to sacrifice a few weeks to get the product right. Readiness reviews and the highest priority problems or bugs find a resolution, and the schedule gets shifted to support higher quality. Cloud-based applications are integrating product development, engineering, supply chain management and production planning teams on a global scale to reach higher product quality levels.
10. Companies can measure perfect order performance with ERP software.
As a manufacturer, if you can deliver products on time, to the right place, with the proper documentation on the first try — then you can assume your perfect order performance statistics are doing well. The challenge to maintain this statistic grows as complexity in orders and configuration rises. Tapping into cloud-based analysis from ERP software can provide valuable information on retaining your perfect order performance in complex situations.
Cloud SCM software is on a meteoric rise with all forecasts expecting huge increases in value and implementation in the coming years. As cloud supply chain management software grows more agile and scalable, it will be impossible to avoid using it to stay competitive.
If you’re looking for SMC solutions, take a look at our requirements template to find a package that best suits your needs.
How has implementing cloud supply chain software improved your efficiency? Let us know below!