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Cloud technology for agile supply chains

By Contributor
Fri 29 Apr 2022

Article by Infor A/NZ vice president and managing director, Jarrod Kinchington.

Autonomous vehicles, infotainment and smart electronics - today's consumers expect state-of-the-art features and the highest level of vehicle safety. The automotive industry is therefore advancing with great strides and a high drive for innovation. Manufacturers can quickly lose out if they don't optimise their internal processes and digitise their supply chains. More companies are turning to flexible cloud technologies to modernise their infrastructure for these transformations.

By now, the Internet of Things (IoT) has become the standard in the automotive industry: around 80% of passenger cars are now connected. Among other things, this enables personalised and advanced functions such as interactive navigation systems or driving assistants. However, the cloud does not only offer advantages for the end product and the consumer. Manufacturers and suppliers also benefit from greater connectivity and optimised production and logistics thanks to the greater scalability of the cloud.

The importance of the supply chain

A functioning supply chain is the basis of efficient production. Suppliers provide the manufacturer with various components - from simple parts to complex hardware and software. This makes it more important to build a well thought-out supplier network based on a strategic sourcing plan. Close cooperation and real-time insights into the supply chain increase confidence in the logistics processes and even boost efficiency.

In this context, the return of investment of suppliers is becoming increasingly important for the supply chain. However, it is no longer only traditional parameters such as costs that count; the strategic selection of reliable and well-known suppliers also contributes to customer loyalty. When a company evaluates the risk and profitability of its suppliers, for example, through a Kraljic matrix or supplier storecards, it builds trust in its supply chain and thus its market position.

Reacting in real-time to current demand

Transparency via valid data streams and real-time evaluation helps manufacturers and suppliers react agilely to changing demand situations. In this way, they can keep costs and margins under control and adapt to new trends in time. Manufacturers recognise interruptions in the value chain and can react earlier to disruptions caused by external influences. This is achieved, among other things, through the concept of a visual supply chain that can be displayed in the cloud at different locations, for example - in real-time. In this way, all those involved have an insight into current events at all times.

At this point, it is also advisable to use systems that enable seamless transparency across the entire supply chain. They improve cooperation between manufacturers and suppliers and thus increase the efficiency of all work steps. Once full transparency is achieved within these processes, the supply chain can also be extended. For example, manufacturers can incorporate the needs of end consumers into their planning and develop new services or business models. And thanks to the connection with cloud technology, such an adaptation of the processes is possible for all parties involved in a timely manner.

Global quality standards along the entire supply chain

Collaboration tools with cloud connectivity are an important foundation for these optimised processes. With the help of these tools, the complexity of supply chains can be managed, and the quality of the end product increased. At the same time, quality managers can digitise processes, standardise audit types across the entire company and quickly identify potential problems. The tools continuously collect data, store it in the cloud and enable cross-functional access and evaluation for all stakeholders. All processes can be analysed based on the collected data, and informed decisions can be made.

As a result, cooperation tools with state-of-the-art cloud technology support the development of trustworthy and global supply networks. In addition, they increase the manufacturer's market position thanks to the agile action capability and scalability of the supply chain. Combined with assessment tools such as scorecards, common quality control standards can be easily implemented and quality management systems (QMS) implemented. In this way, companies ensure that their suppliers always meet the highest standards and that all components of the logistics chain are optimally coordinated.

The transformation from an on-premises IT infrastructure to a cloud strategy modernises numerous processes in companies. It also improves supply chain agility. Cloud connectivity gives suppliers and trading partners worldwide access to central supply chain information. This allows companies to scale their production and logistics processes more easily and respond more quickly to sudden changes in demand. This means they are well prepared for the increasing pace of innovation in the automotive industry.

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