30 January, 2023

Supply chain as a service (SCaaS) – the ultimate guide

To quote writer and editor Stewart Brand: “Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road.” Wise words in this day and age when more and more aspects of manufacturing and ecommerce are being automated, computerized, and digitized.

In supply chain management, an important technological development for retailers has been the creation of supply chain as a service, or SCaaS. We’re going to unpack this concept, explaining what SCaaS is, how it works, and how it impacts businesses for the better.

 

Supply chain as a service (SCaaS) explained

An SCaaS company is basically a company that specializes in providing cloud-based, supply-chain-related software and, increasingly, other order fulfillment services. It means that instead of a manufacturing or ecommerce entity taking out subscriptions to the cloud-based software they need themselves, they’re able to access them through an SCaaS company, which they hire for that purpose. These third parties can take care of anything from inventory management and warehousing to reverse logistics, or returns. In fact, with the right SCaaS company, you’ll be able to track your entire order fulfillment process. In other words, you’ll have supply chain transparency.

SCaaS companies are great for small retailers and manufacturers, especially those that are starting out, because they save these businesses from having to pay for the software they need themselves. For more established outfits, SCaaS will become an increasingly important resource as business practices become more complex. This is especially so because SCaaS companies can also offer valuable information and advice; they can be a partner.

 

A myriad other ways an SCaaS company can be a good resource

As a manufacturer or ecommerce business owner, you can outsource your entire supply chain management or any part of it to an SCaaS provider. Almost as a bonus, these third-party providers can be useful in other, related ways. Here are a few examples:

1. Finding and getting the raw materials you need

SCaaS companies can help you get what you need at the right price because they have information about suppliers. They also know about shipping companies and shipping regulations, an expertise you can tap into to ensure getting what you need in good time.

2. Facilitating coordination between retailers and their manufacturers

To make sure retailers get their stock from the manufacturers in the right quantities and at the right time, it’s important for them to be on top of the producers’ production processes, lead times, inventory levels, and quality inspections. SCaaS companies can take care of this. They have the technology and industry expertise to provide real-time updates on the manufacturing process and lead times, ensuring that retailers are in the know at all times.

3. Warehousing

Some SCaaS providers offer warehousing. They have the technology to streamline operations from receiving and slotting to picking and packing. Add this to their inventory management capabilities and you have a more efficient and resilient supply chain altogether.

4. Shipping

In addition to being able to suggest shipping companies, an SCaaS company can work out the best logistics for you when you need to move inventory from one location to another. It can identify the kind and size of transportation you’ll need — truck, rail, or cargo ship — and the capacity of each needed. Plus, the company can work out the best routes that should be taken.

Possible challenges to implementing an SCaaS model

  • Your SCaaS’s technology might not be shared by all your partners

As good as the technology and infrastructure SCaaS companies offer is, if your internal teams and trading partners aren’t up to speed, they won’t be able to communicate with your third-party providers. You have to make sure your stakeholders’ technology can interface with the kind your SCaaS uses.

  • Not knowing how and when to use SCaaS

In the complex world that is today’s marketplace, a company has to work out what part of their supply chain it can handle itself and which sections are best outsourced to an SCaaS. Retailers and manufacturers must also be flexible enough to adapt this model as the need arises, either taking on more themselves or outsourcing more.

  • Finding a good logistics partner

This can be difficult. First you have to find a third-party provider that has the top-notch infrastructure and digital programs you need, along with the right background and expertise in your area to be a good partner. When you’ve got that down, you can figure out which areas of your business to outsource.

Benefits of using SCaaS

SCaaS can redefine supply chain management in the following ways:

  1. Agility: Access information and analytics from any Internet-enabled device and make data-driven decisions quickly.
  2. Seamless communication: Easily share information and stay connected with stakeholders through every stage of the supply chain.
  3. Scalability: Add or reduce the logistics services that are outsourced according to customer demands.
  4. Transparency: Have more control over the supply chain because information is updated consistently and available in real time.
  5. Sustainability: There’s no need for you to invest in a complex IT infrastructure.

 

In conclusion

SCaaS is a revolutionary model that’s the next iteration for supply chain management, and our Cin7 Omni system can help you determine the best ways to leverage it for your business.

How can it do this? Well, our Cin7 Omni’s inventory and order management cloud-based software seamlessly integrates with various 3PL companies, connecting your online and offline stores, warehouses, and distribution centers in one platform. Through this connection with 3PL companies, you’re able to analyze them and understand which company and services are right for you.

To find out more, click here to schedule a demo with one of our experts today.

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