The Imperative of Cloud in Supply Chain Planning

Supply chain planning capabilities have evolved from being a portfolio of tools and technologies used to run and plan supply chain operations to a set of capabilities that can be leveraged to build business agility in resiliency in today’s complex business environment. Cloud provides additional capabilities to supply chain planning technologies to align better with the rapid proliferation of data, system complexities, and business complexities. To understand the perspectives of our community in this area, SAPinsider surveyed 106 members of our community between May and July 2022. SAPinsiders highlighted that a significant satisfaction gap exists in supply chain planning capabilities. Only 14% of respondents indicated that they are completely satisfied with their current supply chain planning capabilities (Figure 1). 32% indicated that they were “somewhat satisfied”. 54% of SAPinsiders believe that challenges with current solutions, like lack of actionable data and insights, challenges in demand planning etc. can be addressed by cloud-based supply chain planning solutions. Overall, 83% of respondents indicated that at least some elements of their supply chain planning capabilities are cloud-based, validating our hypothesis that SAPinsiders are increasingly looking at cloud-based supply chain planning capabilities. This transition to cloud stems from the challenges being faced with legacy planning solutions. Lack of visibility is a key current state pain point in supply chain planning. When asked to identify the current pain points with supply chain planning, Lack-of-end-to-end visibility (55%) and lack of actionable data and insights (51%) emerged as the top two planning challenges. This aspect has been a consistent theme in the responses, featuring in business drivers, strategies, and requirements as well. SAPinsiders consider visibility as a foundational aspect of integrated planning and believe that the level-of-end to-end visibility they envision can be delivered by the cloud. Cloud can play a critical role in eliminating some other big gaps identified. Integrated planning remains a big gap since only 28% of respondents indicated that they currently had integrated financial planning with supply chain planning, but 75% agree that it is critical to building this type of integrated planning capability. 56% indicate that they may not have seamless connectivity between demand forecast and inventory planning, highlighting the lack of integration at the foundational level for many SAPinsiders. This is another area where SAPinsiders believe leveraging cloud capabilities is critical. Platform-as-a-service (PaaS) can help build cross-compatibility with existing products and APIs when applications from multiple partners are involved. As KK. Aithal, an end-user of supply chain planning technologies and technology leader, highlighted during the post-survey interview: "Cloud can really help accelerate the integration of supply chain planning applications in the entire network." Business agility and resiliency were other key themes that emerged across multiple responses. Therefore, it is not surprising that real-time planning emerged as the cloud's top success criteria for supply chain planning capabilities (53%). This is where SAPinsiders believes that Infrastructure-as-a-service (IaaS) and Platform-as-a-service (PaaS) can help, providing visibility into supply chains with a multitude of partners and vendors. They expect IaaS to help support cloud-based data management and planning, including Internet of Things (IoT) enabled edge devices. All leading hypescalers and cloud services providers like MS Azure, AWS, Google Cloud, IBM Cloud etc., not only provide their own supply chain planning tools and platforms but also can be leveraged to build or host your own supply chain planning solutions.