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Impact of Cloud Computing in Logistics Management

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Mradul K, VP of Global Strategy, LogiNext

Over the years, the spurt in the number of companies in the freight and courier sectors across the country has made logistics management imperative. To ensure deliveries are handled in an efficient manner, logistics management plays a critical role in offering solutions that factor in the needs and challenges of those involved.

In India, there are only a few organized players who are implementing technology solutions within their network, while there are a bulk of players who are devoid of technology. Although, technology acts as an enabler and a medium of integrating, communicating and bringing about overall efficiencies, but these efficiencies utterly lack adopting into logistics sector.

At present, most smart logistics service require synchronization between various modes of communication as well as a need to keep a tab on the movement of goods and their handling also requires to be monitored. Any logistics unit worth its salt must keep a tab on the millions of transactions that happen at any given period of time. This is where the importance of the cloud comes to the limelight.

The major challenges here are cost containment, collaboration, and visibility, which align well with the problems addressed by cloud software through enhanced information sharing, advanced analytics, and low-cost deployment. This leads toward a healthy future adoption of cloud logistics solutions.

Cloud-based applications are nimbler, faster and far more powerful than external IT data management systems, which allow for complex data processing and sharing. The ease and accessibility of such access points help to retrieve and analyze inventory or transportation data to help make moment decisions based on real-time reporting.

Companies and freight management service providers can use these real-time reporting capabilities to track and locate products at any point in the manufacturing, distribution, or shipping cycles, which help get them a holistic view of the overall supply chain.

TMS (Transport management systems) have been on-premise for a couple of decades but in the past 5 years, the cloud is eating up this space at a massive rate. Most of the B2B solutions across sectors are going on the cloud and this trend is bound to accelerate.

Some of the benefits of leveraging cloud computing are:

•Scale: The inherent scalability of cloud computing solutions can be extremely beneficial for the logistics sector. As most organizations deal with a huge demand shift, it is hard to handle without the right technology in place. With cloud computing solutions, it’s easy to scale up without wasting time, money or resources. This makes it easy for logistics organizations to enter new markets or launch new services easily and quickly. Since cloud scalability helps develop dynamic supply chains.

According to a recent survey of supply chain professionals by Oracle, roughly one-third of respondents see cloud solutions as being a ‘game-changer’ or provider of a significantly positive impact. While many are yet to adopt advanced technologies namely artificial intelligence (AI) and blockchain, as professionals believe in their potential, and see these technologies rising in importance over the next two years.

•Cost efficiency: Cloud-based logistics systems help in managing different aspects of operations in real-time make pricing scalable and reducing the incurred costs. Companies have the opportunity of accessing current updates on relevant data. Due to the nature that cloud-based logistics operates as a pay-per-use model, it saves the cost of software maintenance and upgrades. Capital expenditure is drastically reduced due to little demand for on-site resources.

•Onboarding: Cloud solutions help onboard new trading partners in days instead of weeks. With the onboarding of shippers, carriers, freight brokerages, and 3PLs, cloud gives one the flexibility to meet varied customer requests or requirements by enabling any-to-any integrations and retaining flexible protocol connectivity.

•Flexibility: In the logistics sector, the decision to move to the cloud normally stems from a financial perspective. Upfront costs are cheaper; there’s no need for huge investments in IT infrastructure and its upgrades or support requirements. Additionally, it is also quick and easy to add users into the online environment, no matter where they are.

According to a recent survey of supply chain professionals by Oracle, roughly one-third of respondents see cloud solutions as being a ‘game-changer’ or provider of a significantly positive impact. While many are yet to adopt advanced technologies namely artificial intelligence (AI) and blockchain, as professionals believe in their potential, and see these technologies rising in importance over the next two years.

Given the benefits that cloud computing has to offer, coupled with the increasing number of supply chain focused services, it is inevitable that the logistics sector will take up cloud in operations in at least some form. Hence, there really isn’t a question about its future, rather it’s about how much will companies leverage on its benefits for greater success.

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