Sourcing and procurement specialists are often concerned primarily with broad operational issues at their respective firms: how transportation can be improved for energy efficiency, for example, or how sustainable supplier management can improve business partnerships and communicate a brand image that is forward-thinking and environmentally conscious. And of course, business cost reduction is always a chief concern.
Given the sheer number of topics that supply chain management executives need to address, it can be easy to become lost in the details or overwhelmed by the breadth of factors at play. Nevertheless, it's important that professionals who oversee their companies' distribution networks take an occasional look outside their direct field and its particular set of concerns. Cloud computing and big data are areas of great growth and development that promise to help supply chain managers do their jobs more effectively.
The problem of data in managing the production supply chain
Companies in the manufacturing and consumer goods sectors are already discovering the benefits of Software-as-a-Service (SaaS) solutions - another term for programs that run in the cloud - for managing their strategic sourcing networks. The primary benefit of SaaS applications in this regard is their ability to analyze and deliver data in more powerful and efficient ways.
Being able to access the right kind of information is integral to supply chain optimization - but it is not always as easy as it should be. In a column for Manufacturing Business Technology, E2open Chief Marketing Officer Michael Schmitt suggested that data is a double-edged sword when it comes to maintaining healthy and profitable business-supplier relationships.
"Better information leads to better decision-making. But incomplete, inaccurate, or untimely information can be worse than useless - it can be actively damaging to your business. Demand instability is a perfect case in point. In this environment, success hinges on the ability of the entire trading partner network, not just the brand owner, to reliably and cost-effectively manage demand volatility," Schmitt wrote.
Data is crucial to the risk management process, and as companies' information sets grow to a volume that could be considered big data, high-capacity, cloud-based analytics applications will become necessary to help executives understand how they should tailor their operations based on that data.
Looking to cloud applications for enterprise resource planning
What's more, those decisions need to be made as quickly as possible so that the proper courses of action can be taken. And in order to make decisions both quickly and accurately, real-time data is essential.
Many companies are turning to cloud analytics platforms in order to obtain continually updated insights into their suppliers. Kenandy CEO Sandra Kurtzig explained in a recent post for InformationWeek how cloud-based applications allow manufacturing companies to stay agile and adaptive in a dynamic, changing market.
"Agility is the ability for a company to react quickly to changes in business conditions without a lot of disruption. That means the ERP system has to be easy to use, customize and integrate with existing technologies. It has to offer continuous visibility. The agile manufacturer needs to respond quickly when requirements change," Kurtzig wrote.
Kurtzig gave the example of a manufacturing supplier running out of a particular part. In order to effectively bounce back from this situation, the company needs to be able to determine in a very short amount of time where else they can obtain the item so as to avoid letting productivity suffer and losing revenue. Alternatively, cloud-based enterprise resource planning tools can also let companies know when a part becomes available for a lower price with another supplier.
As the American manufacturing sector begins to regain traction, having fast access to the kinds of insights that SaaS solutions make available may prove to be the determining factor in a company's ability to stay at the top of the field.