Cloud technology has significantly influenced many aspects of modern business. For example, one of the industries that have been heavily shaped by cloud technology is B2B logistics.
The market for global cloud supply chain management services is growing remarkably. This market was valued at $12.4 billion last year. However, it is growing 41% a year and will be worth over $222 billion by 2028.
The cloud has helped with a lot of companies in this sector. Out of state movers are using some of the same technology to plan their businesses better.
Understanding the Growing Market for Cloud Services in the Logistics Industry
Demand for cloud computing services in the logistics industry is growing due to its numerous benefits. Some of the biggest reasons B2B logistics companies turn to cloud solutions are discussed below.
Avoiding the costly problems associated with supply-chain surpluses and shortages
it is probably not a coincidence that the market for cloud services in the supply chain industry has risen during the pandemic. The pandemic has led to some of the worst supply chain disruptions the economy has experienced in decades. This highlights the importance of thoroughly optimized supply chain models.
Cloud technology has significantly improved the ability of logistics companies to keep supply shortages, and surplus is in check. As a result, most companies are likely to resort to cloud solutions as they feel pressure to prevent future shortages.
How does cloud technology help minimize supply chain shortages? Companies can use inventory management solutions to track inventory in real-time.
Business.com shared an article on the merits of real-time inventory management software. These tools can keep records of inventory levels stored on the cloud. They can automatically adjust these levels as products are sold or new shipments arrive. They can even have controls built into their cloud monitoring systems to alert them if levels seem too high or too low. They can pause on new shipments if they can’t store more inventory in a warehouse. They can also place rush orders to replenish stock if demand seems to be escalating.
When logistics companies use the cloud to monitor inventory levels, they can avoid unexpected shortages or surpluses. They will react quickly if inventory levels fall outside of excepted tolerances, so these problems don’t sneak upon them.
Reducing resources that need to be expanded for different stages of a supply chain process
Cloud technology has also helped merge many of the functions of the supply chain process. For example, they provide feedback between different departments and even employees within the same department. Cloud technology has also helped improve transparency by making organizational data available to all employees in the organization.
The biggest reason this improves efficiency is that it helps employees identify problems. They can see where bottlenecks are occurring. Managers will take preemptive action and make changes to the logistical process to improve efficiency.
Mitigate the risks of data loss
The vast majority of logistics companies are very dependent on data. Their operations would come to a standstill if data was compromised, corrupted or lost. Unfortunately, many problems can contribute to data loss, including cyberattacks, server outages or human error.
Cloud technology has helped limit problems associated with data loss. The biggest reason is due to redundancy. When data is stored on the cloud, copies are made across different servers. Therefore, if a data record is deleted, it can take a while to remove it from other servers. This makes it easier to restore data that has been lost.
The cloud also helps businesses back up data that has been placed on their servers. Since their servers might be more vulnerable to outages, they will have an easier time protecting the data stored on them.
Improve communication between supply-chain partners
Suppliers and purchasers need to maintain good communication with each other. They want to address any concerns on either end of the transaction. Purchasers also want to track goods that have been shipped to them accurately.
The cloud has made it much easier for suppliers, distributors and purchasing companies to keep in touch with each other. Greater transparency, in turn, helps improve organizational efficiency and foster stronger relationships between all supply-chain partners.
Improving the cost-effectiveness of scalability
Logistics companies often face many challenges when they try to scale their operations. One of the most significant issues is the cost of data storage.
The cost of storing data on your servers can be massive. Fortunately, cloud technology reduces these costs tremendously. As logistics companies grow, they will store vital data on the cloud at much lower prices.