Three Digital Pillars of Supply Chain: Cloud Technology, Management Systems, and Automation

Every digital journey has to start somewhere. For supply chain digitalization, it begins with cloud migration, introduction of management systems, and the automation of repetitive processes. While there is no rule that you must integrate all three, each one has a lot to offer, and the cumulative effect of cloud migration, automation, and a well-made MS is sure to elevate any supply chain, bringing the company into a new era.  

Below, we will cover the basics of cloud technology, management software, and automation as they pertain to supply chain. This article was created to answer the questions  business owners, change managers, or tech employees may have as their company considers digitalization. If you still have questions once you are through – do not hesitate to contact us.  

According to Gartner, a leading IT research company, over 95% of new digital workloads will be deployed on cloud-native platforms by 2025. The reasons for such a forecast are clear; the ability to store, access, and manage data via cloud technology is a supply chain game-changer with undeniable benefits. Wide remote access to information empowers business owners with more tools to grow their business and create better customer experiences. Some key improvements that come with the shift to cloud are: 

• Real-time control. Cloud-based technology supplies employees with live data, allowing them to react quickly to changing circumstances.  
• Transparency. The significant increase in visibility maximizes control over supply chain operations and provides business owners with a relevant picture of their processes.  
• Quality Assurance. The clear understanding of every aspect of how the company is running presents a direction for improvement by pinpointing bottlenecks and risks.  
• Cybersecurity. Cloud service providers equip their solutions with built-in defenses against malware and potential hackers. 
• Communication. A connected supply chain creates a more unified, collaborative experience for everyone involved. The shift to cloud allows more employees to witness and understand not just their individual role, but the flow of the entire process.  

Cloud platforms are diverse virtual storage spaces where companies can keep, back up, and recover their data, as well as create cloud-native applications. In supply chain, they serve a variety of purposes, most importantly, the centralization of data and remote access to the real-time state of inventory, warehouses, orders, and freight operations. 

According to Linkedin Pulse, the top three providers of cloud services in 2022 are Amazon Web Services (AWS), Azure, and Google Cloud Platform (GCP). All three offer many common cloud features, like databases, cybersecurity, storage, mobile networking, and more. However, when choosing the option best suited to your business model, there are certain differences to consider.

The oldest player of the three, AWS offers the widest selection of services that can cater to niche cloud needs. For example, their Snow tools allow you to upload offline data from older data carriers into the cloud, or physically access data in remote locations on call. Such options can be great for a suburban supplyh chain company that has just begun to get digitalized and does not know where to start. On the other hand, the abundance of AWS offerings can overwhelm users that just seek a basic cloud package.  

In case you are on the fence about AWS and want to learn more, Innovecs has recently achieved Amazon Web Services Select Consulting Partner status in the AWS Partner Network (APN); we can help you get a better understanding of this platform.

Azure is a solid choice for Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), offering businesses a wide range of services to build and test applications. Azure’s open-source computing can simplify your developers’ job and accelerate the creation of new products. However, this platform is best suited for, and usually runs on Microsoft, which can mean a steep learning curve for outsiders and companies at the start of any kind of digitalization. 

GCP prides itself on its user-friendly interface and great processing rates, making it the cheapest and fastest of these choices. According to a comparison study by The Stack, “GCP’s worst performing machine outpaced both AWS and Azure’s best performing machines (…), while GCP’s top-performing machine had 165% and 237% more throughput than AWS and Azure respectively”. As a downside, GCP has a smaller selection of services and programming languages than its rivals. But, being the youngest platform of the three, one can gamble on GCP adding the missing pieces in the near future.  

For every benefit it will bring into your business, cloud migration also has some recurring challenges. The first and the most obvious one is the initial investment, which includes the costs of training your employees, rewriting applications, purchasing the tools that facilitate migration, and bandwidth. It is wise to start cloud migration from a place of financial stability; re-educating staff will take time, training, and a sound change management plan.  

In addition to the overall cost of migration and steep learning curve for the employees, other potential challenges may look like: 

Introduction of management software into your supply chain is an integral part of the broad process of supply chain management (SCM). These solutions respond to the needs of your supply chain, digitalize menial processes, and maximize efficiency. This, in turn, makes the business more profitable and introduces opportunities for growth.  

Each type of supply chain management system addresses a separate segment of supply chain, but all of them share similar goals: increased visibility and transparency, heightened control, and, as a result, a boost to the overall quality of the supply chain. Now, let us take a closer look at the specifics of different management systems. 

• TMS. Transportation Management Systems help to plan, track, and improve the movement of goods from one supply chain link to the other. A good TMS can help shorten delivery times and minimize the risks of losing cargo with GPS tracking.  
• WMS. Warehouse Management Systems oversee storage space activites. This includes temperature control, storehouse design efficiency, pick & pack, and remote access to robots and automated processes.
• IMS. Inventory Management Systems focus on stock control. They can forecast demand through data analysis, optimize locations of sensitive goods, and cycle count inventory through special auditing techniques. 
• FMS. Freight Management Systems optimize third-party logistics, including booking and pricing freight. 
• LMS. Logistics Management Systems broadly refers to the sum of software that helps to manage a given supply chain. They can include the previous, more specific management systems or take on some of their features.

Like cloud migration, the biggest obstacles with implementation are the costs and the time spent training the professionals who will deal with the new software. Supply chain management systems must be thoroughly tested and built with a focus on scalability to support the company’s growth.

Making a robot do the boring parts of your job used to be a sci-fi dream. Today, it is a natural part of modern supply chain. Automation can be fixed or flexible, hard or soft, programmable or integrated – depending on the needs and financial capacities of your business.  

• Fixed (hard) automation is the straightforward use of robotics. Specialized equipment takes on menial repetitive tasks. The high cost of implementation pays off in the long run, but once the process is established, it is difficult to change.  
• Programmable automation receives commands via computer program. It is more diverse and takes on the tasks in clusters, according to the requirements. The requirements themselves can change slightly between tasks, so that the overall type of request stays consistent, but the details vary. 

• Flexible (soft) automation is a subset of programmable automation. Through the computer, a human employee can reprogramthe machinery from task to task. This type of automation is fast and easily adaptable between sequences, but has high implementation costs.   
• Integrated automation is a sophisticated system that can move through several stages of the production process with little to no human intervention.  

For supply chain and logistics, the most popular automation solutions usually involve machine learning (ML), or robotic process automation (RPA).  

ML is a way to teach a computer to make its own decisions, within scenarios that are built into its code. The computer’s artificial intelligence relies upon analyzing previous data and applying the knowledge of the past, to get the desired result in the future. As such, AI, ML, and data science often go hand-in-hand. In supply chain industry, machine learning helps to predict future trends, forecast demand, and provide data analytics devoid of human error.  

RPA employs robots, or “bots”, to handle the repetitive tasks previously done by humans. Implementation of RPA to the supply chain minimizes human errors, speeds up assigned processes, and frees up employees for more pressing matters that need a human touch.

The types of Robotic Process Automation fit into three categories, depending on the amount of human management they need.  

• Attended Automation is a user-operated bot that relies on constant external control and is used to make a worker’s job faster and easier, without fully replacing them.  
• Unattended Automation is a solution that runs in the background, triggered by simple repetitive tasks.  
• Hybrid Automation combines the two previous types and creates an automated end-to-end workflow.

Automation is a process that requires careful preparation. The more planning you put into the process beforehand, the less adjustments you will have to make on the go. Good automation strategy is key to saving money and time. These simple, yet crucial steps should be taken before automating supply chain processes: 

• Define the areas of focus. Each automation solution serves a unique purpose. Goals like increased speed, improved performance, error reduction, or a higher level of customer service will help to guide your choice of RPA. This is your “why?” 
• Look for patterns. Automation addresses repetitive and mundane processes with leeway for human error. This is your “what?” 
• Communicate with the team. Prepare them for upcoming changes, and be patient during the adjustment period. Create a clear roadmap to visualize the journey,and provide company-funded workshops and seminars to empower employees to learn new skills and grow professionally. 
• Choose the automation system. The choice must serve your company’s goals and be realistic in terms of budget, timeline, and skill requirements.  

The three pillars of digitalization that we have discussed today all increase the efficiency of supply chains in their own way. Cloud technology, when used to the fullest, provides a storage for data, a foundation for software development, and an all-seeing eye that gives employees access to all relevant information from every link of the supply chain. Management systems give structure to all processes within supply chain and make them more governable. Automation saves the company time and money by taking on the repetitive tasks and streamlining operations in a risk-free way. 

Introducing innovative technology into your supply chain can be as overwhelming as it is beneficial. Extra support in such endeavors your digitalization journey is essential for smooth integration. Innovecs can help your business take the first steps towards digitalization, or expand on software solutions already in place. We have a decade’s worth of expertise in cloud computing, machine learning, and development of supply chain management systems. If you have any questions – drop us a line.