6 Ways the Cloud Benefits the Supply Chain

Businesses are migrating their supply chain processes to the cloud at an increasingly higher rate. Spending on cloud infrastructure experienced 24.7% year-over-year growth in the third quarter of 2022, skyrocketing to $23.9 billion. The sharp increase in investment in the cloud corresponds to a slump in data center spending, indicating that many companies are moving away from legacy, on-premises systems. It’s no secret why — the benefits of the cloud supply chain are compelling.

How the Cloud Benefits the Supply Chain

With cloud-based supply chain solutions, you can increase your company’s productivity and competitiveness in an increasingly global and high-demand market. The cloud provides your supply chain with several benefits, from increased visibility to improved security. Consider the ways cloud technology can revolutionize your supply chain:

Visibility

Having better inventory visibility is critical at every step of the supply chain. Gaining end-to-end visibility lets you see every SKU and order’s real-time status at every point in your supply chain, helping you meet customer demands, anticipate challenges, and devise solutions to keep your supply chain on track. With more supply chains going global, this level of insight is crucial for managing stock levels, making smarter replenishment decisions, and optimizing your operations to reduce costs.

Companies gain unparalleled levels of supply chain visibility with the cloud. Cloud supply chain solutions leverage data analytics to access the volumes of data available throughout a company’s supply chain and generate insights that help businesses improve their supply chain efficiency. With the cloud, you can predict market changes like demand fluctuations and anticipate risks across your supply network.

Some of the best tools you can use to gain supply chain visibility are cloud-based ERP integrations. By connecting your ERP system with sales formats like EDI and eCommerce, you can automatically transfer order, customer, and tracking data between your channels and systems, creating a single platform for managing your marketplace data. Digital storefront integrations keep your inventory availability synced across channels, and integrating your ERP with your EDI solution provides increased transparency for every transaction between you and your trading partners.

The visibility EDI provides also enables companies to meet governmental regulations. For example, EDI helps grocery stores comply with food traceability rules from the United States Food and Drug Administration, which requires records associated with specific events along the supply chain. Audit trails provide complete transaction transparency, making it easier to track documents and locate them when needed.

Scalability

As your business grows, so does your need for solutions that can help you meet demand. With on-premises data servers and software, scaling becomes quite challenging. You have to buy additional data servers and hardware, plus spend time reconstructing your infrastructure, to achieve higher capacity or storage as you grow.

With the cloud, you can scale your solutions up or down as needed to respond with agility to market conditions without upgrading your hardware. Since cloud providers host their infrastructure for their customers, you don’t need to deal with hardware or software upgrades — you upgrade your plan with your cloud solutions provider. If you need to increase your data computing as your workload surges, the cloud provides that flexibility.

An efficient tool for improving scalability with the cloud is a cloud-based EDI solution. Apparel company Trau & Loevner used EDI to manage a higher flow of transactions between trading partners and automate the communication process. Trau & Loevner was able to eliminate manual data entry and streamline order processing to trade easily with top retailers like Kohl’s and JCPenney.

Security

Protecting sensitive customer and transaction data is a significant concern for most businesses. Data protection is vital for operational success, ensuring platforms are stable and transactions are secure.

Legacy solutions can be challenging to protect. You must implement a physical security system to reduce liability where your physical data centers are stored. Another critical investment is in cybersecurity and encryption. If malicious actors infiltrate your data servers, you could face consequences like downtime, costs to recover lost data, reputational damage, and even fines for poor security compliance. Security solutions are vital but could be costly for your company to implement, especially if you are responsible for security patches and software updates.

Cloud-solution providers typically invest in the latest security measures to protect their customers’ data. Providers frequently update security features, upgrade servers, and install firewalls to keep hackers out. With TrueCommerce EDI, for example, increasing cloud supply chain security is simple. The highly secure platform uses data redundancy, encryption, and a complete transaction audit trail to ensure your data is handled safely.

Compliance

Compliance with trading partner and retailer requirements is crucial for avoiding chargebacks and improving relationships with vendors. These mandates can include complete and accurate EDI documents, communication times, lead and delivery times, as well as product quality upon delivery. Meeting partners’ trading requirements is critical for suppliers. Yet juggling constantly-changing mandates from multiple customers can be challenging.

Managing compliance manually is time-consuming and an unnecessary drain on a company’s resources. You can eliminate the burden of meeting EDI compliance requirements by using an EDI compliance solution. These solutions automate the transmission of EDI documents and generate alerts on incorrect documents to ensure suppliers remain compliant.

Solution Management

Managing your supply chain effectively requires leveraging every tool at your disposal to streamline operations and make your systems more efficient. With a legacy data center, you are responsible for hardware upgrades, software updates, and training for employees on new procedures. On-premises data servers also limit your data’s accessibility and restrict connectivity to your trading partners if hardware or software is outdated. Legacy systems require a lot of maintenance and are often inefficient.

In contrast, the cloud requires far less maintenance than on-premises servers and is faster to deploy. Your cloud services provider maintains and upgrades its data servers, removing a significant burden off of your IT team. Instead of installing new hardware and software every time you upgrade, your cloud solutions provider handles everything for you, allowing you to focus on mission-critical tasks.

Cloud services are also more accessible than legacy supply chain solutions. You can access your supply chain management platform on the cloud from any location, which creates a single source of all your data. With the cloud accessible anytime and anywhere, you can increase your supply chain connectivity to take advantage of better insight.

Communication

Global supply chains are demanding higher levels of communication between partners than ever before. Buyers must communicate quickly and effectively with their suppliers to ensure accurate, on-time orders. Trading partners must communicate demand changes to others along the supply chain to prevent overstocking and higher warehousing costs. Without the cloud, communication is slower and often hampered by time zones and geographic locations.

The cloud takes supply chain communication to another level, enabling you to improve your relationships with trading partners and build a more connected supply chain. You can easily send and receive documents from your trading partners using EDI, no matter where they are in the world. Automatic updates can help mitigate supply chain disruptions and keep all of your partners in the loop.

Transform Your Supply Chain with Cloud Solutions

By leveraging the cloud, you can take your supply chain to new heights. Replacing on-premises solutions with the cloud improves your company’s inventory visibility, communication with trading partners, data security, and ease of scaling. With such transformative benefits, there’s no better time to move your supply chain to the cloud.

The TrueCommerce EDI solution is a scalable, cloud-based system that processes and manages your EDI documents while reducing your IT team’s burden and allowing you to do business in every direction. If you’re interested in seeing what cloud-based EDI can do for you, request a free demo today.