If Covid-19 has taught us one thing, it’s that we can’t simply optimise for what the new normal is. There is no new normal.
Yashwin Bhoola, MD: supply chain and operations at Accenture in Africa
If a supply chain is to survive, it has to be anti-fragile so it can continuously evolve to respond effectively to whatever’s thrown at it. Anti-fragile is what most are branding as resilience 2.0. It refers to a system’s ability to not just be resilient to change, but be strengthened by the change. Cloud allows this. It opens up myriad possibilities for the supply chain and enables leaders to manage service levels and cost, build resilience and ensure responsible operations.
In light of the recent happenings in South Africa, companies need to be more meticulous about how they operate their supply chains to ensure accessibility, affordability, and stability over time. Managing this in the cloud will allow a more seamless recovery in the short term, and minimise the risk of complete disruption in the chain.
Cloud is more than just a cost-saving
Cloud does save companies money. They benefit from the economies of scale of thousands of customers, and agile, best-in-class prebuilt components managed by a service provider. But cost savings are just the beginning.
The cloud has become critical to every supply chain. Cloud provides technologies that allow companies to process huge amounts of data – from virtually unlimited sources across the entire supply chain – at speeds and volumes never before possible. Companies using the cloud gain the flexibility to quickly adjust the amount of computing resources as needed, reduce the time and cost to develop and deploy new applications, and benefit from visibility across operations and the entire value chain for faster, more-informed decision-making.
Cloud enables innovation. It provides the foundation for affordable, unrestricted access to cutting-edge technologies and capabilities that would ordinarily be out of a company’s reach. It also enables companies to deeply analyse data to generate critical business insights that can vastly improve decision making, and reconfigure how they work to gain the agility to deal with the consequences of whatever the data says.
Finally, in the supply chain, cloud plays a key role in responsibility and sustainability. Efficient data computing helps accelerate companies’ adoption of emerging technologies to reduce the supply chain’s environmental footprint and improve resource efficiency while increasing regulatory compliance and improving risk mitigation.
Opportunities for cloud adoption in the supply chain
By fully embracing the cloud, supply chain executives will be able to influence all dimensions of the supply chain from engineering (product), planning, procurement, manufacturing, fulfilment and service. This will create a supply chain that is interconnected across the ecosystem, intelligent through digitisation, analytics and automation, and innovative to replace a one-size-fits-all strategy with a tailored supply chain strategy.
Attaining these goals may require a much more ambitious push to the cloud across the supply chain. All supply chain functions will have to embrace the cloud to tackle short-term and long-term challenges. This includes developing remote access to a wealth of data, cross-collaborating, and collecting data in real-time to quickly and appropriately improve customer experiences and react to unforeseen disruptions.
The cloud has already made significant inroads in the procurement function, and this will continue. Planning and fulfilment, both currently with medium cloud penetration, also have high potential for future adoption. While cloud adoption in R&D and engineering is low today, there’s a big opportunity to expedite new product introduction through cloud-based product lifecycle management solutions. Manufacturing is slowly moving execution systems to the cloud and that will continue as the cloud is more accepted.
How to move forward
Creating a cloud-based supply chain is an ambitious effort and requires a structured, disciplined approach. This approach will of course be different for every company – especially given that all companies won’t necessarily be starting from the same point. Supply chain leaders need to know where their organisation currently stands on the cloud maturity spectrum and what they need to do to advance.
At Accenture, we have identified possible starting points and solutions for supply chain transformation in the cloud. This starts with understanding the key supply chain questions and challenges a company wants to address, which allows the company to identify the data and types of insights needed to solve them. This, coupled with a standard set of data architectures, integration approaches and data governance, enables a company to build a cloud-native data foundation.
In this way, multiple data sources can be readily connected to cloud-native supply chain applications and analytical platforms. The company is now moving from just porting applications to a new platform, to unlocking the elastic and scalable computing power and open data architectures that underpin the innovative side of the cloud. As its cloud presence continues to mature, the company can then focus on using the cloud to drive greater speed, agility and efficiency into its supply chain through increasing automation and industrialised processes.
Our world today is truly different from what it was only 18 months ago, and all companies need to figure out how they respond to and thrive in this new reality. For most companies, success will largely hinge on their supply chain and its ability to concurrently handle fluctuating demand, the need for resilience, the pressure to manage costs and calls for greater responsibility for society and the environment. It’s a tall order, but the cloud can help – and supply chain leaders should consider how they can start taking greater advantage of it.