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The Supply Chain Management Blog covers the latest in SCM strategy, technology, and innovation.

4 Reasons Why a Customer-Centric Supply Chain Begins in the Cloud

Guest Author

By: Dominic Reagan, Senior Director for Value Chain Execution

Business leaders are becoming more adept at customer-centric thinking because the market demands it. Digitalization has put customers in charge of buying experiences because it’s so easy for them to find alternatives. To stay competitive, product-centric companies need to consistently deliver a fast, flexible, and fully transparent fulfillment process that adapts to individual preferences.

How does your current business respond to this heightened demand? A successful customer-centric strategy comes down to a single, pivotal issue: How to create a fulfillment process that enables a highly personalized and consistently positive customer experiences.

The answer lies in the cloud — and specifically, in a new generation of cloud-based supply chain management (SCM) applications. To understand why, we can look at four key capabilities that cloud-based SCM applications provide — all of which are essential to building and managing a customer-centric supply chain. (For even more on this topic, read the e-book Your Complete Guide to Modern Supply Chain Management on which this blog is based.) 

1. Cloud-based SCM applications maximize supply chain agility.

Customer-centric supply chains are highly agile so that managers can respond quickly and efficiently to evolving product requirements, changes in market conditions, and shifting customer preferences. Agility is crucial because in the customer-centric era, lean inventory-management practices — such as just-in-time and lean manufacturing — leave little room for error when demand changes or an unplanned disruption delays production. When a stock-out happens, customers simply don’t care why; they just care that it happened.

Cloud-native SCM systems help to reduce this risk with capabilities that support: 

  • End-to-end orchestration: Shared information drives coordinated action across every system, transaction, and function in the supply chain, so it’s easier to find inventory when it’s needed.
  • Responsiveness: Businesses can be more proactive with cloud-based SCM applications because the applications incorporate automation for repeated transactions and push out alerts for exceptions, so managers can concentrate on responding to customers in real time.
  • Visibility: Cloud-based SCM integrates planning and reporting data into a single view, so managers can check status at-a-glance and make changes with confidence that they are delivering the expected outcomes.

Armed with these capabilities, businesses become more agile and can spot risks and opportunities faster; make quicker decisions with confidence, and anticipate and adjust to unexpected variations in demand. 

Firms using Oracle SCM Cloud, for example, have reported 36 percent faster product delivery times and 90 percent reductions in cycle time— even as they achieved an average 28 percent increase in supply chain productivity.

2. Cloud-based SCM enables a simple and seamless omnichannel experience.

The days when B2B and B2C customers purchased products and services through a single channel have been replaced by an omnichannel model and on-premises applications simply are not designed to optimize this model. Here’s why:

Customers want a consistent, effortless experience across all channels and across all types of devices. But an omnichannel strategy must also be profitable, supporting multiple fulfillment methods/channels while enabling control for inventory and lead times. 

Cloud enables these requirements by providing end-to-end information consolidation, as well as the application power needed to access real-time information and tools to execute actions quickly based on the information. Cloud also gives customers detailed, real-time information, as well as contact and customer-service options on demand. 

A truly customer-centric, cloud-based SCM system can meet all of these requirements — and it can do this without requiring complex and expensive customizations or bolted-on third-party solutions. 

3. Cloud-based SCM transforms business data into a unique source of value — and creates new opportunities for differentiation.

Analytics tools in legacy, on-premises applications use operational data to present insight based on historical trends. Looking back is necessary, but customer-centric supply chains use cloud applications to incorporate additional data — including third-party data — for forward-looking analytical insights that can predict and anticipate customer demand. 

This deeper insight helps to minimize risk in production, distribution, and inventory planning because decision makers have more context within which to assess the relevance and business value of potential decisions. In many cases, they also can see previously unseen correlations and patterns in business data through machine learning (ML) algorithms that are integral within the cloud applications. These new insights could lead to adjustments that improve efficiency or open new business opportunities. 

4. Cloud-based SCM ensures that technology innovation is always an opportunity — and never a threat.

By the end of 2018, one-third of all companies were at risk of being disrupted by competition better able to leverage digital technologies, according to IDC.

Cloud-based SCM applications provide businesses with a valuable opportunity to get on the right side of this disruption. They bring open standards and modern architecture to accommodate upgrades and advanced technologies that enable supply chains to more quickly respond to change while minimizing disruptions. Cloud-based SCM applications are also noticeably better than legacy systems at integrating quickly and efficiently with existing enterprise applications — for example, a legacy ERP system that runs a firm's financial and accounting operations. 

Cloud-based SCM systems also enable businesses to use cutting-edge ML in applications and to take advantage of the latest innovations in analytics, blockchain, process automation, mobility, and other areas of emerging technology. 

Cloud-based SCM is a game-changer

Choosing SCM applications with these four capabilities can be a game-changing decision for any business that wants to implement a customer-centric supply chain. That's why so many organizations today are looking to the cloud for their next-generation SCM system — and why so many are realizing handsome returns now whilst building a stronger competitive position for the future.

To learn more about managing a cloud-based, customer-centric supply chain, download the e-book Your Complete Guide to Modern Supply Chain Management.

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