Making logistics management efficient with cloud computing

Dr B K Mukhopadhyay

(The author is a Professor of

Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

Dr. Boidurjo Rick Mukhopadhyay

(The author, international

award-winning development and management economist, formerly

a Gold Medalist in Economics at Gauhati University)

Cloud computing is now a buzzword in the areas of finance, e-commerce, ICT, deep learning, and smart/intelligent systems contexts. Cloud computing, putting it simply, refers to the delivery of on-demand computing services over the internet on a pay-as-you-go basis. So instead of managing files and services on a local storage device, businesses and individuals can do so over the internet in a cost-efficient manner. Essentially, cloud-based systems can provide enterprises with a holistic view of their entire operations, enhancing supply-chain visibility and effective collaboration. With an increasing digitalization of business operations across industries and markets, cloud technology delivers greater operating efficiencies and huge savings in an evolving business landscape.

For example, an SME that is in the IT and software development business wants to scale the operations up. The small team size, uncertain market demand and resource constraints are typically the barriers that come in the way of expansion. This is where cloud computing can come in. When we compare and contrast on-premise and cloud-based computing, it helps to make a more informed decision about which of the two could be more efficient. On-premise requires payment of lump sums for scalability only to get lesser options, i.e., once the business scales up it becomes difficult to scale down - this could lead to losses in infrastructure and maintenance costs. Cloud computing, on the contrary, provides an option where the business can pay on the basis of how much of the services are used with faster provisions for scaling up or down.

When it comes to space for servers, on-premise requires a lot more physical space along with the maintenance and storage hassles that tag along, while cloud computing solutions is provided by cloud service providers who generally both manage and maintain the server, saving businesses both space and hassles. Similar pros and cons can be drawn when it comes to data security, maintenance, and monitoring costs.

Cloud Computing in Logistics and Supply Chain Management

Both business and consumers in the logistics industry prefer transparency and openness in the logistics process, between the order information and the last stages of a product lifecycle. Typical cloud-based logistics software packages can provide agile, real-time communications across supply chain components (e.g., ships can talk to warehouses via interconnected systems) that contribute to higher and measurable efficiency gains along with collaborative efficacy. In addition, the level of security is also higher than on-premise options, e.g., cloud systems allow privilege-based access only, where customers can access information that they require while securely hiding company-sensitive data.

There are improved cloud-based logistics software solutions that are now available and used globally by both medium and large companies. This software enables open and reliable communication channels to have various processes and stages of business operations interact with one another. For example, manufacturers, suppliers, warehousing and distribution networks, retailers, to customers are informed at all times before, during, and at the final stages of a transaction. The job of the cloud system is not only to ensure consistency and information sharing in a secured way, but also to maintain record-keeping and data analysis on a continued basis. The application of deep and machine learning in cloud technology can help predict, spot, and solve problems faster than previous processes in place. It also helps with maintaining 'good practice' with compliances in international markets by keeping track of changes and the systems being fed with the information while it processes the same almost immediately.

As mentioned in the first section of this article, there are almost immediate cost and efficiency gains with cloud computing. Using cloud technology does not require any hardware, IT, centralized global connectivity, and large upfront lump sum costs. By moving the logistics and supply chain management to the cloud, businesses can reduce the upfront capital investment while any previous integration and configuration costs get added to operating costs. With all the services online, businesses can automate repeatable tasks using configurable rules, routing guides, policy management, and custom workflows that exist in the cloud. Cloud solutions leverage managed automation and data analysis, leading to more intelligent systems of resupply processes. Cloud technology empowers your management team to make more intelligent decisions without senior managers experiencing decision fatigue on a regular basis.

Streamlining Inventory

Management

Expecting an overnight delivery from our favourite electronic-retail provider (Amazon, Flipkart, Alibaba) comes with a sense of entitlement today. Looking into the process of how these companies manage such 'speed of light' delivery is interesting, and for this, they need real-time access to information from multiple departments at the same time for logistics and shipment. Cloud computing in the logistics industry enables improved data mobility throughout the organization's many divisions, supporting better resource allocation and decision-making. Cloud computing also ensures faster data transmission between management, administration, IT, and other improvements in the logistics business – it runs a full circle by enhancing the capacity to respond to ongoing fluctuations, instantly accessing on-hand inventory numbers and information. The constant flow of inventory data through the cloud software provides detailed specifics like profit margins and top-selling figures, among other things. This leaves a significant impact on revenues and allows placing smarter orders to meet consumer expectations.

Nothing is ever perfect, develop a culture of ongoing improvization

Due to the deep learning and AI role in cloud computing, the systems are continually correcting and refining themselves as more information and market insights are fed into the systems. This allows the companies using cloud computing to solidify their market position and formulate strategies. Replacing inefficient functionalities of a system and removing dated features is something that cloud solutions offer to businesses. Therefore, companies are encouraging and supporting their HR to offer training on programming and coding to learn the process in-house, thereby reducing further costs from outsourcing. This would subsequently allow to test the difficult ideas at a reduced cost and either implement them immediately or dismiss them as impossible. This practice of risk-taking and coming up with novel solutions at times would open newer possibilities for the application of cloud computing.

Total control and monitoring

of production processes

When companies work in partnerships, a very common feature in IT, media, and e-commerce – all concerned parties benefit from an enhanced form of collaboration via the cloud systems that are secure, resource-efficient, transparent, and thereby can monitor the different stages of production processes and supply chain. Entrepreneurs who outsource a part of their logistics, procurement, and delivery services can connect with various components of the logistics business using cloud technologies. They can potentially communicate with internal and external departments, as well as partners and outsourced services. The system ensures transparency at every supply chain level when the cloud integrates the supply chain and links with inter-departmental collaborators. This process helps achieve more internal and external gains for the company, on one hand – the business managers can monitor the logistic chain's inbound activities, outward activities, and while keeping your customers happy; on the other hand, the visibility at each step makes the process more efficient when it comes to right resource allocation decisions needed to push the process forward, thereby inducing an improved work environment and simplified processes.

Some Examples

Office 365 for business is Microsoft's cloud platform that provides businesses with Microsoft Office products and productivity tools within a subscription model. It offers a suite of integrated solutions allowing employees to work and collaborate from anywhere. They function across all platforms (desktop, tablet, and mobile) and operating systems with a 99% financially-backed service level agreement (SLA) to guarantee service availability. Similarly, SharePoint Online & OneDrive for Business allows companies to share and collaborate on documents. The system allows permission access-based options such as read, write, modify, and delete as well as control via track document changes while setting up alerts to notify when a document has been added or modified. SharePoint has wider usage also when it is used as an intranet and includes features like calendars, forms, tasks, picture libraries, video libraries, and more.

To conclude, recent statistics show that six out of ten businesses moved their work to the cloud and 46% of those companies reported better financials on costs. For Amazon, their cloud services happen to be one of their top earners. During the pandemic year in 2020, they earned ten billion dollars after experiencing a steady 30% every quarter. AWS maintains 80% of the market share of cloud computing, followed by Azure and Google for the remaining 20% market share. Predictions show that the global cloud computing market will grow by $461 billion by the last quarter of 2025. That will be a 17.5% Compound Annual Growth Rate (CAGR). Large, well-funded companies are no longer the only ones with access to cloud computing during the fourth industrial revolution era (cloud being one while intelligent, agile, and automation are the other three). Small businesses have also teethed into cloud computing to leverage the technologies to allow efficient logistics businesses to boost optimum productivity gains.