Traditionally, supply chains have been perceived as a background support organization: necessary but non-celebrated. But the role of the supply chain is growing in importance, and is now seen as a strategic tool for business performance and growth. Recently we sponsored a white paper by IDC to explore the growing importance of supply chains, and the critical role cloud and SaaS applications play in facilitating their speed and resiliency.
IDC defines resiliency as “the ability of a supply chain to ensure and preserve the continuity and consistency of product supply and meet business obligations for product delivery and service to customers in the face of both short-term operational and longer-term strategic disruptions.” They also note it’s “also about the ability to quickly adapt to changing business conditions while maintaining the core purpose and principles of the business.” Cloud and SaaS applications enable resiliency by providing critical visibility into risk. Without these technologies, supply chains simply don’t have the tools for collaboration; they will be too slow and not nimble enough to compete.
Over the past decade, supply chains have transformed into globalized operations. IDC’s data shows 82% of global companies are already part of multi-enterprise ecosystems. Low-cost labor and consumer demand in emerging regions are key drivers of this change. Another key driver is constantly evolving, digital-native business models – think Amazon, Uber, AirBnB – making nearly every business ripe for disruption. Multi-enterprise ecosystems are simply not possible without cloud-based networks to enable connectivity and collaboration among partners.
What is the main enabler of a resilient supply chain? Digital transformation. Without a digital-first strategy, supply chains lack the agility to quickly react and adapt to internal and external threats, local and global. This is precisely what we witnessed during the COVID pandemic. Supply chains that had already prioritized a digital work environment were in a much better position to adapt to keep business moving. The resulting visibility enhanced decision making, as did the ability to quickly and flexibly exchange information faster than traditional supply chain models.
IDC’s research also shows the majority of companies around the world are indeed experiencing supply chain disruptions and their supply chains lack resiliency. With business taking on an increasingly global approach, the paper encourages companies to assess their supply chain application maturity. It recommends moving to cloud and SaaS, the best platform for collaborative commerce with many-to-many interactions among manufacturers, partners, suppliers, and customers. They’ll be positioned to reap the benefits of always-on, immediate access to critical data to drive speed and resiliency, to quickly pivot to meet changing business conditions and customer demands.
A Modern, Connected Cloud Environment Optimizes Supply Chain Collaboration: