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Why Data Warehousing Needs to Be in the Cloud

Data warehousing is ready for the cloud, say Tom French, founder and chief executive officer, and Sam Smith, client technology solutions, with Supply Chain Coach. They show how the technology can aid in the use of analytics for maintaining a multi-client, multi-year data warehouse.

Many companies have been reluctant to place their data warehouses, which contain crucial and proprietary information, in the cloud. But French says the technology is ideally suited for that purpose. It allows for the easy sharing of data between third-party logistics providers and their clients, with an eye toward performing key analytics. Companies can make year-over-year comparisons while tracking daily changes within the supply chain. A well-managed data warehouse can bring in data from enterprise resource planning and warehouse-management systems, allowing users to examine the cost or profit involved in a given delivery. In the event, they get a true picture of profit broken down by SKU, customer and region. And they're able to make key marketing decisions based on that intelligence.

Within a distribution facility, companies can determine whether they're stocking items in the right place, and how they can do things differently. "Without the data," says French, "you're guessing."

The types of analytics that can be acquired for a data warehouse break down into three main areas, says Smith: descriptive, predictive and prescriptive. The first is the most basic level, providing simple visibility of measurements such as cost per mile for transportation. The second allows a company to plan for the future based on past data, answering such questions as how rates will be affected by a rise in fuel prices. The third level, prescriptive, is the highest level of analytics, and tells the user what adjustments in cost, rates and distribution network need to be made. For example, a company might determine that it needs to expand to a particular region with a cross-dock or pool-point location.

The three levels provide companies with a maturity model, in terms of their ability to use data and analytics to drive profitability within their organizations. That journey can be expedited, says Smith, through the use of cloud technology, which can be implemented easily and quickly. A software installation that used to take months can now be completed within a matter of minutes.

The cloud can also help companies to manage disparate systems that are the result of acquisitions. Even warehouse-management systems, which tend to be location-specific, are good candidates for the cloud, according to French. "Believe me," he says, "we're going to see a whole lot more movement to software as a service."

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