What do companies who have an advanced supply chain do differently than their less mature counterparts? A recent report from Gartner (in partnership with Supply Chain Digest) provides one clear insight into a competitive differentiator:
The more advanced a company’s supply chain is, the more likely it is to have acquired cloud-based systems.
The results from the survey of nearly 500 supply chain professionals show that 18% of level 1 supply chains (least mature) are using some type of cloud/software as a service (SaaS) solution for supply chain management, versus 57% for the most mature level 4 companies.
Gartner anticipates significant expansion in both “private” and “public” cloud deployments, however it still expects that by 2021, approximately 60% of all supply chain software deployments will be traditional license models–a small decline from current levels. Supply Chain Digest editor Dan Gilmore disagrees, writing, “I believe Cloud will take a bigger share by then, as I have argued in the past.”
Another recent report from SCM World demonstrated that cloud solutions improve supply chain performance. SCM World identified Sales & Operations Planning (S&OP), Transportation Management Systems (TMS), Spare Parts Management and Store Shelf Optimization as the most cloud-friendly supply chain processes with the most capability to deliver the network effect throughout a supply chain. According to the report, “the network effect is maximised for functions that are best served when a large number of suppliers and/or customers benefit from rapid access to information that can streamline business.”
Rapid access to information is the fuel that drives collaboration within the supply chain. It’s no surprise that 46% of the SCM World respondents said that greater supply chain collaboration leads to problems being solved twice as quickly. Because cloud-based platforms facilitate more effective collaboration, companies with large-scale supply chains are adopting cloud solutions in increasing numbers in an effort to increase agility and improve response time to their most challenging problems.
As a the leader and pioneer in cloud sales and operations planning, Steelwedge has been advocating for years that S&OP belongs in the cloud. So, we’re always pleased to see reports that validate the success of cloud applications for supply chain and S&OP. What do you think? Will cloud solutions for supply chain management expand more rapidly than Gartner predicts? What else does the future hold for supply chains in the cloud? Let us know in the comments.