Navigating the cloudy skies: Distribution, logistics and manufacturing sectors adapt to supply chain storms
It has not been smooth sailing in recent years for the UK’s distribution, logistics and manufacturing sectors. After taking a significant hit during the pandemic, consumer spending and business activity bounced back with such a velocity that demand vastly exceeded supply, leading to supply chain disruptions. Industry leaders like Amazon made substantial investments in technological solutions to bolster efficiency during the COVID-19 pandemic. These further elevated customer expectations, including the demand for same-day order and delivery services.
The distribution, logistics and manufacturing sectors must also tackle supply chain issues brought on by the Russian invasion of Ukraine and the UK’s departure from the EU, renewed climate goals, smooth integration of IoT devices and other technological advancements, as well as labour shortages. A recent study from business advisory firm BDO found that 77 per cent of mid-sized businesses face persistent supply chain disruptions thanks to these challenges. Indeed, research from Make UK found that supply chain pressures will likely continue impacting businesses into 2024.
Supply chain disruptions have significant consequences, causing delays, increased expenses, inventory shortages and customer dissatisfaction. Inflation can have a similar negative impact, which was at 6.7 per cent in September and is not expected to return to ‘normal’ levels until 2025. It directly drives up prices of materials, labour and transportation required for manufacturing, shipping and storing goods. When this price hike is reflected in the cost of the goods, demand slows, starting a vicious cycle of financial loss. According to a report from Extensiv, 92 per cent of transportation, supply chain and logistics stakeholders claimed that inflation negatively affected their business in 2022.
The need for an agile and responsive supply chain is, therefore, more pressing than ever. The logistics industry is experiencing increased demand for quick insights and innovative solutions to navigate supply chain disruptions and fluctuating consumer preferences
One way of giving a distribution, manufacturing or logistics business the best chance of withstanding difficult conditions is by transitioning to cloud technology. Here, data and applications are hosted on remote servers accessible via the internet. Cloud technology offers scalable, powerful compute and storage, and real-time data access, empowering manufacturers with comprehensive supply chain visibility. By centralising data, companies can rapidly collect, analyse and make informed decisions to mitigate risks and pre-empt disruptions.
The cloud works to improve manufacturing processes, inventory management and distribution efficiency, all without complex infrastructure management associated with legacy, on-premise solutions.
A key characteristic of cloud solutions is their adaptability and scalability. As cloud providers offer Software as a Service (SaaS), they can tailor their offerings to meet specific needs, allowing organisations to engage with shifting demands more effectively. This agility is crucial to maintaining an efficient supply chain when disruptions arise. It is also cost-effective, allowing for a flexible pay-as-you-go model that scales resources as needed.
Real-time insights gained through cloud platforms empower companies to make informed decisions on the fly. This ensures optimised production, inventory levels and distribution strategies, and reduces the risk of overstock or stockouts. Enhanced data security is another critical benefit, with cloud providers offering robust protection against breaches which provides peace of mind.
Cloud-based analytics offer better understanding of customer preferences and market trends, enabling rapid responses and improved customer satisfaction. Improved collaboration is also fostered across the supply chain as stakeholders can more easily publish and share data regarding, for example, procurement and order management. In essence, cloud technology paves the way for cost-effective, secure and collaborative solutions, optimising the supply chain while also fortifying it against disruptions.
Adrian West, the VP of Distribution/Logistics and Manufacturing at Advanced, said:
“Supply chain disruptions have underscored the importance of agility and responsiveness in our sector. Transitioning to cloud technology is key, offering real-time data access and comprehensive supply chain visibility. This enables us to make swift, informed decisions, optimising our processes and meeting shifting demands effectively. It’s not just about weathering the storm; it’s about steering our course through it with confidence and resilience.”
Since the boom in e-commerce brought on by the pandemic, cloud adoption in the Distribution and Manufacturing sectors has been increasing. Ofcom estimates that between 2019 and 2022, UK revenues for cloud infrastructure grew by 35 to 40 per cent each year. Additionally, Data Bridge Market Research forecasts that the global cloud supply chain management market will reach £58.53 billion by 2030. Technology will enable more widespread use of self-driving trucks, autonomous cargo drones and smart factories. The latter are facilities that leverage IoT sensors, data analytics and cloud computing to monitor and control manufacturing processes in real-time. Gartner suggests that, by 2026, 75 per cent of enterprises will have adopted some form of intralogistics smart robots into warehouse operations.
Choosing the correct SaaS provider is essential for the successful cloud transformation of any distribution and manufacturing business. Doing so will help mitigate common hurdles relating to integrating new systems with old, skills shortages and set-up expenses. Cloud technology can be incorporated smoothly into a business’ operations with the help of a trusted, experienced provider like Advanced.
Advanced provides back-office software tailored to the manufacturing and distribution/logistics industries that generates tangible results. Every year, employees in these sectors save over 750,000 hours through automation and reduced manual input enabled by Advanced’s back-office software tailored for the manufacturing and distribution/logistics industries. Find out how to kick-start your cloud transition by contacting Advanced’s expert team today.