View on 2022: A Solution to E-commerce Supply Chain Woes Lies in the Cloud

The 2021 holiday season has been one filled with cheers and jeers for online retailers and their customers. E-commerce spending is on track to top $200 billion for the first time, as the pandemic solidified Americans’ digital shopping habits.

Yet, the pandemic-induced shutdowns on supply chains have persisted with 46 percent of small businesses experiencing delays with domestic suppliers and 21 percent reporting shortages from foreign suppliers during the last week of November alone. As a result, out-of-stock notifications on retailer websites were up over 200 percent in November compared to pre-pandemic levels of January 2020.

With e-commerce showing no signs of slowing and supply chain challenges expected to persist into the New Year, businesses across every industry must seek out new ways to optimize their supply chains. Many are finding the answer in the cloud.

Cloud computing has become a game-changer, enabling companies to collect and process huge amounts of data from virtually every point across the supply chain in real time. It enables companies to analyze the data to generate business insights that can improve decision making.

In fact, the cloud’s vast computing power opens a myriad of possibilities for online retailers to strengthen their supply chains, three of which I’ve highlighted below.

1. Breaking down data silos

For many companies, the prevalence of data silos – between internal departments and with external trading partners – remains a major barrier to effective decision making. This makes it difficult for suppliers, manufacturers, logistics providers and other partners across the supply chain to plan and act on accurate information.

The cloud is a powerful enabler to data integration, allowing organizations to centralize all data to create a network view. This helps businesses keep track of their inventory levels and ensure they have the inventory in stock to deliver on their promise to customers. Bridging silos and making data accessible across a company leads to smarter, real-time inventory planning.

1. Improves demand forecasting

Offering an excellent online shopping experience hinges on a company’s ability to ensure that the right products consumers need are available where and when they need them. To better anticipate and keep up with constantly changing market demand, organizations are deploying advanced tools, such as predictive analytics, artificial intelligence (AI) and Internet of Things (IoT), to unlock meaningful value from their vast data sets.

These cloud-based, “intelligent” technologies can enhance an organization’s responsiveness to supply chain disruptions further upstream by allowing managers to make proactive decisions in real time, while also enabling them to create rule-based decisions for more basic, anticipated tasks.

Similar to how popular navigation apps assist drivers in mapping out the best route based on trouble spots, supply chain cloud platforms can help companies take in vital information like shipment delays, manufacturing stoppages or inclement weather to determine the next-best actions that resolve the issue or mitigate risk.

1. Enhances Collaboration

Companies can only respond to ever-changing consumer demand if information is shared along the entire value chain. The supply chain ecosystem must foster end-to-end collaboration among all stakeholders, from suppliers and manufacturers to retailers and consumers.

Cloud solutions, especially hybrid cloud solutions which offer a cost-effective way to utilize the benefits of the cloud, are facilitating this journey to greater transparency, enabling organizations to seamlessly integrate data from the proprietary systems of their trading partners regardless of geographical boundaries.

In fact, some companies are using the cloud to create a “control tower” that connects partners and service providers to better coordinate and orchestrate the elements that make up the supply chain. This provides real-time transparency at every point in the supply chain, which in turn, allows decision-makers to detect and act on problems at the earliest stage.

If there is one thing that the pandemic has taught us, it’s that there is no “new normal.” Looking ahead, online retailers will need to anticipate and respond to ever-changing consumer demand while ensuring their supply chains are as flexible and transparent as possible. Achieving this calls for a much more ambitious push to the cloud across all levels of the supply chain.