Cloud tech and supply chains: Turning supply chains into digital networks

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  Quantumrun Foresight
• March 1, 2023

Insight summary

Cloud technologies have turned supply chains into digital networks that unite the flows of products and services with talent, information, and finances. This optimization allows organizations to adapt to today’s volatile markets and mitigate climate change. 

Cloud tech and supply chains context 

Supply chain management involves coordinating and optimizing the movement of goods, services, and information from suppliers to customers. One common challenge in supply chain management is the existence of silos, which refer to organizational, functional, or cultural barriers that prevent effective collaboration among stakeholders. These silos can lead to problems emerging at a late stage and may limit response options. 

One way to address this challenge is through the use of digitization and the establishment of a “control tower” system. A control tower system connects trading partners and service providers to create an “always-on” electronic community, allowing for real-time visibility and seamless collaboration across the supply chain. By leveraging analytics, cognitive equipment, and smart apps, the control tower system can provide actionable insights and automate execution, leading to enhanced and accelerated innovation. 

Digital supply networks, enabled by cloud technology, have four distinct advantages: connected, intelligent, flexible, and scalable. These advantages drive unprecedented visibility, insights, and flexibility while operating rapidly and at scale. 

• Connected: The entry of cloud tech into the supply chain has enabled end-to-end visibility, allowing organizations to act swiftly to handle disruptions. 


• Intelligent: It has further enabled data flow and unlocked the potential to analyze vast amounts of data, letting organizations derive actionable insights. 


• Flexible: The flow of goods and services has been enhanced through increased visibility of processes and cooperation between stakeholders. 


• Scalable: This collaboration has contributed to reduced lead and response times, lower costs, proactive risk prevention, greater flexibility, and increased transparency. 

Disruptive impact

As supply chains integrate cloud technologies, they can be expected to be reconfigured to become more efficient, reducing time and resource wastage. Cloud-based supply chain systems allow for better coordination and communication between different supply chain elements. Additionally, the cloud allows for dynamic provisioning, multi-tenancy, and improved server utilization, enabling companies to scale up or down as needed. Another benefit of incorporating cloud tech in supply chains is improved decision-making. By leveraging analytics and cognitive equipment, cloud-based supply chain systems provide actionable insights that can be used to make better, more informed decisions. This increased flexibility helps companies respond quickly to changing market conditions.

As such, the linear ‘take, mistake, and dispose of’ model may become redundant. Tools like machine learning and artificial intelligence (AI/ML) systems are expected to be utilized increasingly as companies realize the advantages of digitizing their supply chains. Cloud-enabled technologies such as digital twins that allow simulations of real-world locations and infrastructures can move businesses towards efficient and sustainable practices. Regarding labor, the in-house IT systems and cloud technology hybrid may create a need for management skills spanning service integration, informed purchasing capabilities, contract facilitation, and vendor management and development. Overall, cloud computing and storage technologies will continue to receive increasing investments throughout the 2020s and 2030s. 

Implications of cloud tech and supply chains

Wider implications of integrating cloud technology within supply chains may include:

• Manufacturing firms using cloud-based supply chain systems to enable real-time visibility into production and inventory levels, allowing companies to better manage their supply chain and respond quickly to changes in demand.


• Retail stores utilizing cloud-based supply chain systems to provide real-time data on customer demand and inventory levels, enabling retailers to optimize their inventory management and better meet customer needs.


• Healthcare providers leveraging cloud-based supply chain systems to better monitor medical supplies and equipment, enabling hospitals and clinics to better meet the needs of patients and reduce waste.


• Cloud-based supply chain systems being employed to optimize routes and improve fleet maintenance and deployment, leading to cost savings and improved efficiency in the transportation and logistics industry. 


• Energy firms using cloud-based supply chain systems to enhance oil and gas exploration and production, enabling companies to optimize their operations and reduce costs.

Questions to consider

• If you work in the supply chain, how is your company using cloud-based tech?


• What are the other potential challenges of using cloud tech in supply chains?