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How cloud solutions are impacting logistics

Jan Tore Pedersen | 03. Apr 2019
3 minutes read

As digitalisation takes hold and logistics companies are facing an era of unprecedented change, cloud solutions are being brought to the forefront of supply chain performance improvement. More and more logistics service providers and their clients are turning to the cloud as the benefits of SaaS offerings are becoming plain as day: huge cost savings as well as better execution, visibility and collaboration with trading partners across the supply chain. But just how are cloud solutions impacting the logistics industry?

 

Optimal supply chain performance

Data is the new gold in transportation and logistics. Optimal supply chain performance hinges on the capability for all stakeholders to have access to the right information at the right time. To ensure that a supply chain is driven by true consumer demands, real-time data availability is critical. This means information exchange needs to go beyond paper and spreadsheets and become electronic. 

By incorporating new platform-based business models, supply chain stakeholders are able to seamlessly interact through all planning, execution and completion of transport and logistics operations. The impact of cloud solutions in logistics is huge, as we detail in this post. Companies of all sizes reap benefits from cloud and SaaS-based supply chain solutions.

Developing truly effective supply chain operating systems is crucial and, in the long term, immensely beneficial. Even more importantly, it serves as a powerful value proposition to clients in a market where providers struggle to differentiate their offerings.

 

Breaking down the profit barriers

So, are there any uncertainties among logisticians in relation to cloud solutions? Yes – cost is a key concern. Traditionally, start-up costs associated with acquisition and set-up of technology systems have been standing in the way of small and mid-sized companies seeking to adopt digital practices.

With the advent of cloud-solutions, though, budget constraints are no longer a barrier. SaaS solutions eliminate the need for logistics companies to invest in pricey software licences and hardware. Nor do they have to embark on mammoth installation projects that bog down internal resources and slow performance and productivity.

Cloud solutions bring upfront costs down significantly by offering LSPs a pay-as-you-use model. This allows SaaS to be treated as an operating expenditure rather than a high-cost investment.

 

Conclusion

In a digitally transforming logistics environment, adoption rates for SaaS solutions are on the upswing. Cloud-based platforms facilitate automated interrelations between supply chain stakeholders, enabling LSPs to respond quickly to changing market requirements caused by, for instance, the boom in e-commerce and competitive market entrants. By incorporating Saas solutions, LSPs are able to integrate actionable data on the real-time status of their supply chain, thus attaining scalability, visibility and streamlined coordination of their product, financial and information flows.

In other words: Rethinking the classic approach to supply chain management needs to be priority number one for logistics executives striving to stay competitive in disruptive times. Making your logistics operation digital by implementing cost-friendly, risk-free cloud solutions is the only logical way forward.

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