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7 Reasons Why Cloud-Based Management Is the Future of Logistics

Sept. 21, 2023
Cloud-based management platforms are slowly becoming the norm for logistics companies. Here are seven reasons why.

Supply chains across the globe are embracing the data revolution. Collecting, analyzing and sharing more data lets organizations build more transparent, resilient and efficient supply chains, but only if they have the IT infrastructure to support it. Cloud-based management tools offer a better way to capitalize on that potential.

Cloud solutions have all but replaced traditional, on-premises software in many tech sectors, and it’s time logistics businesses follow suit. Here are seven reasons why.

1. Cloud-Based Logistics Is Fast

Cloud-based logistics’ efficiency is its most obvious advantage. If companies keep all their data insights in the cloud, key stakeholders can access them anywhere on any device. Consequently, they can respond as quickly as possible to any incoming disruptions.

IoT devices can upload directly to the cloud, ensuring management can see inventory records without traveling to a specific warehouse. That immediate accessibility helps fight the $1.77 trillion problem of inventory distortion, as every impacted party can see updates in real-time.

The cloud also provides a single point to store all a business’s logistics data and software. By consolidating all mission-critical systems and information into a single point of access, managers can make informed decisions without switching between apps and devices.

2. Cloud-Based Management Minimizes Errors

Another key benefit of the cloud is it provides a single source of truth for all parties involved. Because cloud tools are accessible from anywhere, logistics employees and their partner organizations can all see the same data simultaneously. By removing access barriers, logistics providers make communication errors less likely.

Without the cloud, information must pass through multiple hands to reach everyone within the supply chain. On top of being slow, that leaves a lot of room for miscommunication. People can misstate things, forget key pieces of information or enter data incorrectly, making it difficult to create an effective logistics process.

The cloud prevents miscommunication by eliminating reliance on manual communication. Anyone who needs to know something can log into the cloud management platform to see it on their own. When everyone has the same information, logistics partners can cooperate more effectively.

3. The Cloud Enables Transparency

That same accessibility also means cloud-based logistics is more transparent than conventional approaches. There’s a growing demand for visibility across supply chains, but providing up-to-date information to all interested parties is challenging with traditional software. The cloud makes it easier.

Customers can access real-time shipment locations on their smartphones if logistics providers use cloud-based tools. Because these systems operate on the same cloud as the company’s internal system, everyone has the most up-to-date information. If there are any delays or other disruptions, everyone will know about it.

When users only need to log in to a cloud portal to see detailed logistics information, providers can boost trust without time-consuming and error-prone manual communication. As resiliency, ethical sourcing and sustainability become bigger concerns, this transparency will become even more important.

4. Cloud Tools Lower IT Costs

While it’s easy to think of cloud systems as an additional expense, they can actually reduce technology costs. As supply chain digitization grows, logistics companies are implementing more devices and digital tools. That can quickly become expensive if businesses host all this extra tech on on-premises servers.

Switching to the cloud can save enterprises 10-20% of their IT budget by minimizing infrastructure needs. Hardware is expensive, but large data centers can offer the same capacity at a lower cost because of their scale. On the cloud, logistics companies also only have to pay for what they actually use, eliminating waste from unused storage space.

Many cloud management tools also consolidate multiple types of software into one platform. That way, logistics providers can save by not paying for separate programs for vehicle tracking, route planning, inventory management and other workflows.

5. The Cloud Is Scalable

Cloud-based logistics management solutions can also grow with the organization. Expanding conventional technology is a slow and costly process, as businesses must buy extra equipment with more capacity than they need and install it manually. In the cloud, scaling up is as simple as paying a higher rate for more space or features.

The as-a-service model of the cloud means logistics companies don’t need to worry about the technical side of scaling up their digital services. The cloud provider will take care of that for them. Beyond that, cloud providers already have the necessary infrastructure in place, so there’s no downtime when scaling. It’s as fast as flipping a switch.

Cloud infrastructure can scale down just as easily if a logistics company removes unused features or reduces its operations. These quick adjustments in both directions support the high flexibility supply chains today demand.

6. Cloud-Based Logistics Support AI

Using the cloud instead of on-premises hardware also makes it easier to use computationally intensive technology. Enterprises in every industry are rushing to capitalize on artificial intelligence (AI), but it requires substantial processing power. Many supply chain companies don’t have enough computing power to run them, but the cloud offers a solution.

Cloud-based AI tools give businesses access to remote data centers with higher-end hardware than they could afford to run on premises. As a result, they can build and deploy advanced AI models without expensive IT upgrades.

Being able to implement AI is a huge advantage for logistics organizations. AI can optimize routes in real time, predict disruptions, enable predictive maintenance and highlight inefficiencies across the company to inform more effective changes. That potential is hard to ignore, especially if the cloud makes it a viable option.

7. Security in the Cloud Is Easier

As supply chain digitization rises, logistics businesses are increasingly concerned about cybersecurity. Cloud-based logistics platforms help in this area, too, by offloading much of the burden of security to third-party experts.

As many as 74% of data breaches stem from human factors and mistakes are more common in industries like logistics, where employees lack IT experience. If logistics enterprises rely on third-party cloud providers instead, the cloud service handles most of the security, including data protection and configuration. Leaving these technical concerns to the experts minimizes the risks of costly human error.

Cybercrime incidents are now making headlines, so more customers will want to work with secure logistics providers. Using the cloud lets businesses achieve a higher security standard despite their internal lack of expertise, helping them grow in a security-conscious market.

Cloud-Based Logistics Is the Future of the Supply Chain

As more companies realize these benefits, cloud-based logistics will become the norm in the supply chain sector. Those who take part in this trend early will have a competitive head start.

The cloud has already transformed the tech sector. If the logistics industry wants to capitalize on the potential of data-driven workflows fully, it must do the same. It’s time to adopt the cloud.

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About the Author

Emily Newton

Emily Newton has eight years of creating logistics and supply chain articles under her belt. She loves helping people stay informed about industry trends. Her work in Supply Chain Connect, Global Trade Magazine and Parcel, showcases her ability to identify newsworthy stories. When Emily isn't writing, she enjoys building lego sets with her husband.