What is Cloud-Based Supply Chain Management?

Cloud-Based Supply Chain Management

Such a thing as cloud-based supply chain management has emerged as a game-changer for businesses, offering numerous benefits, models, and software types that can significantly contribute to their growth.

By utilizing cloud technology, companies can streamline their supply chain operations, enhance collaboration, and improve overall efficiency.

Today, InData Lab Cloud Solutions specialists will help us to look in detail at these solutions for supply chain management, which can benefit your business growth. Let’s start!

Diving Deeper Into the Meaning and Types

Simply put, cloud-based supply chain management is the use of cloud computing to streamline and optimize various aspects of the supply chain process. It involves storing and accessing data, applications, and resources on remote servers, which can be accessed through the Internet. 

This approach eliminates the need for on-premises computing infrastructure and provides real-time visibility, collaboration, and scalability across the supply chain network due to the use of clouds – private, public, or hybrid. 

Now, let’s discover the types of cloud-based supply chain management solutions:

  1. The first type is Software-as-a-Service (SaaS), where supply-chain companies use applications or web apps provided by a third party. These applications are designed, hosted, and maintained by a third party, similar to email services. Examples of SaaS include basic email services as well as more complex enterprise resource planning software.
  2. The second type is Infrastructure-as-a-Service (IaaS), which involves logistics and supply-chain companies utilizing cloud-based data management and data-analysis technologies. This infrastructure can include IoT sensors, virtual machines, networking technology, and energy-management infrastructure.
  3. The third type is Platform-as-a-Service (PaaS), which is beneficial for app developers who require a stable cloud-based development environment for testing purposes. PaaS allows developers to test cloud services for compatibility with existing products and APIs used in supply-chain management.

Regardless of the chosen management and enterprise-planning workflows in cloud environments, they can be implemented on private clouds or public clouds.

When a combination of private and public clouds is used, it is referred to as a hybrid cloud model.

Top 5 Benefits of Using SCM Solutions

Now let’s concentrate on the direct benefits marketplaces owners can have from using cloud-based supply chain management software and tools.

1. Accurate Demand Prediction

Cloud-based WMS and ERP systems provide valuable data that can be used to anticipate shifts in demand and make accurate forecasting predictions. This enables manufacturers to optimize their manufacturing schedules and improve overall efficiency.

Additionally, cloud-based systems designed to optimize inventory, order management, and fulfillment can lead to increased profits and revenue growth. With quick access to demand calculations and data, manufacturers can easily manage inventory levels and avoid any issues that may arise from supply and demand imbalances. This ultimately fosters better customer relations and ensures a smooth operation throughout the production process.

2. Better Material Quality 

Utilizing cloud-based supply chain management software enables the tracking and reporting of quality levels at various levels, including production centers, products, and customers. Thus, a company can always get a comprehensive understanding of quality metrics throughout the entire production process is crucial for cost reduction and enhancing customer satisfaction. 

Additionally, a cloud-based SCM system allows for real-time monitoring and tracing of assemblies, components, and subassemblies across the entire supply chain. By incorporating cloud SCM applications and platforms, quality management becomes an integral aspect of the business’s record-keeping system.

3. Real-time supply chain tracking 

Supply chain visibility is essential for maintaining quality levels and obtaining data for product tracking, and this is crucial for manufacturers with multiple production locations. Cloud-based track and traceability features can prevent costly product recalls by identifying quality issues early on.

Plus, as your enterprise grows, the demand for rapid scalability increases. Depending on in-house software can result in wasted resources when integrating new solutions. If your inventory is expanding, it is important to address the scaling challenge promptly.

With cloud-based supply chain management, all existing systems will remain in place, allowing for a seamless scaling process. If your supply chain was functioning effectively prior to the inventory expansion, you can confidently scale up and continue operations without interruption.

4. Quick Infrastructure Management

Streamlining infrastructure management has become possible due to the use cloud-based calculation of overall equipment effectiveness (OEE) method. OEE is a valuable metric that tracks a machine’s health, performance, and maintenance needs. Cloud supply chain software enables easy gathering and analysis of OEE data, allowing for quick decision-making from anywhere in the world.

5. Accurate prices quoting 

Errors in pricing, quoting, product configuration, or delivery instructions can lead to incorrect or incomplete orders, which can slow down the order process and negatively impact product quality. By using cloud-based supply chain management, manufacturers can avoid product quality problems and improve overall efficiency. 

Automating pricing, quoting, and customer approval workflows with a cloud-based application significantly reduces order cycle times and improves order accuracy. As a result, customer satisfaction increases, and delays in paying invoices decrease.


With cloud-based solutions, companies can easily track inventory, manage orders, coordinate logistics, and analyze data to make informed decisions. Nowadays, a wide range of cloud-based SCM software types is available, including inventory management systems, demand forecasting tools, and transportation management solutions, which can help businesses streamline their processes and achieve sustainable growth. 

Using these solutions for supply chain management, businesses of all sizes, industries, and niches can adapt quickly to changing market demands and improve overall supply chain performance.

Cloud-based Supply Chain Management article and permission to publish here provided by Yana Ihnatchyck. Originally written for Supply Chain Game Changer and published on July 12, 2023.

Cover image by Shafin Al Asad Protic from Pixabay