In the race to digitalize their supply chains, many companies are finding they are already well along the path. Their progress is thanks to the rise of cloud computing and its ability to streamline workflows, connect business partners, and offer greater access to business-changing data. The trend is affecting work both inside the warehouse and up and down the supply chain, helping companies get closer to their IT modernization goals—and improving operations along the way.
The cloud computing market has grown rapidly over the past few years—in adoption as well as infrastructure, spending, and development. Worldwide end-user spending on public cloud services—those owned and operated by third-party service providers—is expected to grow 21% this year, up from 19% in 2022, according to Gartner Inc. data released late last year. Those services include everything from software-as-a-service (SaaS) offerings, such as Zoom, to cloud-based platforms, like Amazon Web Services (AWS). The expected increase will bring total end-user spending to about $592 billion in 2023. And although a shaky economy may threaten companies’ IT budgets this year, researchers say the growing popularity of the cloud will preserve it as one of the tech sector’s hottest areas.
“Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending,” said Sid Nag, vice president analyst at Gartner, in a press release announcing Gartner’s cloud spending forecast. “Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic, and scalable nature.”
Providers of cloud technologies for supply chain agree, emphasizing their ability to connect workers both on and off site to each other—and to supply chain partners—as a way to increase visibility across business networks. They say those aspects of the cloud help promote safer workplaces and create stronger supply chains. Two cloud technology providers offer pointed examples to make the case.
Technology company Matrix develops solutions that improve safety in industrial settings; its latest web-based application harnesses the power of the cloud to help warehouses, distribution centers, and manufacturing plants create safer workplaces by avoiding equipment collisions. The company’s OmniPro Cloud technology connects to its “OmniPro A.I. Collision Avoidance System,” an artificial intelligence (AI)-based forklift-mounted camera system that detects objects in a vehicle’s path to prevent crashes in the warehouse and the yard. The cloud solution provides 24/7 access to software tools, real-time metrics, and analytics used to slice and dice the collision data, giving managers both on and off site access to information they can use to improve workflows, adjust facility layouts, and more, according to Mark Stanton, Matrix’s vice president for industrial business development and sales.
The anti-collision system in itself improves warehouse safety by alerting forklift drivers in time to avert a crash. But as Stanton explains, the cloud-based analytics piece takes the solution further.
“[The cloud] makes that information available to team leaders and management, as and when necessary,” he explains. “It’s all very well having that technology on the fork truck … but management needs to understand what’s going on in that facility [so they can] take action, generate reports, or provide other data that allows the operator, and the facility, to be as safe as possible.”
The cloud system analyzes a wide range of data, including average daily breaches per machine and breach trends over time. It also provides an event graph that includes time-stamped alerts and warning-zone breaches, and can filter data by zone or location as well as by person or piece of equipment. This not only allows managers to track safety and performance but also helps them identify high-risk areas of a facility and pinpoint the most dangerous hours of the day or days of the week. On a financial level, the system’s cloud-based subscription model reduces IT expenses and allows for upgrades with minimal impact on a company’s resources, Stanton notes.
“It’s available to anyone who has authorization to access the system—24/7/365,” Stanton adds. “And whether it’s our system or others, once it’s in the cloud, it can be shared with other systems using APIs [application programming interfaces]. If you start combining different data from different systems, you can get a more holistic view of what’s going on.”
Stanton and others argue that providing that wider view of a workflow, an operation, or even an entire supply chain helps build more efficient, effective processes.
“You can have a very effective WMS [warehouse management system], but there are things happening outside of the WMS that are [keeping it from being] as effective [as it could be],” he says. “If you can take a step back, you can see where those bottlenecks might be.”
Tech firm Systech provides digital identification and traceability software for supply chain applications, a service that’s hard to imagine without the use of the cloud, according to Girish Juneja, Systech’s general manager and senior vice president of its parent company, Dover Corp. Systech’s software solutions provide product traceability from the manufacturing line, through distribution, all the way to the end-user by combining serialization, tracing, and authentication technology that is accessible via a cloud-based application. The solutions have been widely used in the pharmaceutical industry and are also applicable to food, health care, and other industries that rely on product identification and tracking for quality control.
“Increasingly, this need to track product from the first unit of a package [through the entire supply chain] is becoming pervasive,” Juneja says, explaining that doing so requires connecting trading partners—the manufacturer, distributor, third-party logistics service provider (3PL), retailer, and others—via a single technology system. “Many participants in the supply chain don’t ‘live’ on the same system. So if you ask them to be a part of this track-and-trace chain all the way, the only way they can participate … is [through] a cloud-based solution.
“Without the cloud, what we are talking about would be hard to accomplish.”
Juneja describes the system as a trail of “digital crumbs” that creates a transparency among trading partners that can help solve some pretty big supply chain challenges—like the disruptions and product shortages experienced during the height of the Covid-19 pandemic. When all supply chain partners are connected, he explains, it becomes easier to track inventory across an entire network and move it around when demand shifts or problems occur.
“We have seen how big events can disrupt the entire supply chain and have repercussions [that are felt] even after the event is over. We want to solve that through a digital supply chain,” Juneja explains. “What we have seen post-Covid is that there is a higher appreciation of the need to drive transparency in supply chains.”
The bottom line: Greater transparency among trading partners opens the door to better communication, better collaboration, and, ultimately, better decision-making.
“You need to understand the different supply chain events, because if you do, you can impact your business positively,” Juneja says. “Cloud-based digital technologies help make this possible and therefore help improve business—through situations that we’ve seen and others that may come.”
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