Companies whose operations are going global require new solutions for risk management. These solutions should go across countries and link in suppliers around the world. The cloud is succeeding where internal systems have failed.
Supply chain risk is greatly reduced by networked cloud supply chain solutions. This is a network that is 24/7 and forms a solid bond between companies and their business partners and suppliers. Internal supply chain systems like ERP (Enterprise Resource Planning) cannot efficiently handle business processes which involve suppliers, as they were written for getting an enterprise’s internal departments inter-connected. Companies which use supplier networks which are cloud-based have higher risk management capacity and more supply chain choices.
To get the contract, enterprises promise to suppliers to adhere to certain quality standards. But things may get complicated when work is outsourced to the suppliers to suppliers of their own. What this leads to is an increase in supply chain risk. An enterprise’s image and reputation can be affected by a quality issue. The cloud can be used to monitor suppliers across various levels to a degree that internal systems are incapable of.
One of the worst nightmares of an enterprise is finding out that it was inadvertently dealing with drug dealers, terrorist outfits or corrupt organizations. Such an event can lead to the enterprise being penalized and losing lots of money. Most ERP systems can be integrated with restricted list solutions which are cloud-based, which can reduce the risk of an enterprise dealing with the wrong parties.
The cloud can also be used to control an enterprise’s spending on logistics. By moving to logistics solutions which are cloud-based from Excel spreadsheets which were monitored and developed manually, a company dealing in packaged goods was able to save millions of dollars. What the company had planned to reduce costs over a period of five years was achieved in one year itself. This shows the level of efficiency of cloud-based logistics systems. Such a great reduction was achieved with a mix of both, utilization of intermodal logistics and negotiation of shipping charges.
The cloud can be used to make sure that goods which are in transit will stay undamaged and in good condition. The clouds of an enterprise’s logistics partners can be used to keep an eye on goods which are in transit. A sensor can be used to monitor the temperature inside a certain container carrying perishable items. Once the temperature goes above the limit, the sensor will give out alerts. Containers can be monitored to check for break-ins as well as tampering. The risk of goods going through spoilage or tampering can be reduced with monitoring using networks which are cloud-based.
Whether it is for minimizing the gap between enterprises and suppliers, or ensuring that quality issues that affect a company’s brand image do not arise due to not being able to monitor suppliers across many levels, or reducing the risk of an enterprise dealing with illegal organizations, or reducing an enterprise’s spending on logistics, or monitoring goods in transit, cloud-based solutions can effectively decrease your global risk.