Combatting the Chip Shortage with Cloud Adoption
As the economy grapples with the new normal of post-pandemic buyer behavior and businesses move forward, many industries continue to experience a demand surge that has overwhelmed the supply chain. Shortages of critical components such as semiconductor chips are at an all-time high for manufacturing, transportation, and logistics.
The prolonged shortage has massive implications for practically all industries and has slowed the production of vital resources like medical devices, automobiles, and cybersecurity systems.
Massive production delays translate to declines in company revenue and disgruntled customers. To mitigate the overall challenges caused by the pandemic and rising chip shortage, companies must turn to cloud adoption to streamline production and prevent future disruptions.
Let’s discuss how cloud adoption can help combat the chip shortage.
Mitigating the impact of chip shortages
Migrating to the cloud can help companies avoid purchasing hardware components while still using critical infrastructural resources. According to Gartner, worldwide public cloud end-user spending will grow 23% in 2021 (to $332.3 billion) and reach around $397.5 billion in 2022.
Today, the cloud drives today’s digital organizations and is pivotal in an organization’s digital transformation journey; moving to a cloud infrastructure can help free up server capacity, which will take the pressure off organizations that would otherwise be waiting for new hardware.
The cloud also offers direct communication across borders and helps with transactions in real-time. Rapid communication abilities can help mitigate the ongoing effect of supply chain inefficiencies by addressing consumer concerns expediently, thereby improving customer sentiment.
Just as important, cloud infrastructure offers opportunities for enhanced analytics, unified metrics, and real-time tracking information that can soothe the pains of a blocked supply chain.
However, cloud migration isn’t a one-size-fits-all solution. Organizations may join the public cloud, a hybrid cloud, or a private cloud—all of which offer a variety of different benefits and limitations.
Businesses need to ensure a smooth cloud transition strategy that considers specifics like organization scale and consumer makeup.
Successful cloud adoption requires strategy
The chip shortage and pandemic have clarified that professionals in the manufacturing, logistics, and transportation industries must be agile to stay resilient and navigate supply chain difficulties. The migration to the cloud requires new processes as well as cultural change.
Incorrectly adopted cloud infrastructure may lead to enterprise system failure; and other risks—such as security threats and tight compliance regulations—threaten organizations during the migration process. As such, businesses must strategize and prioritize a proactive plan for cloud adoption.
With cyberattacks at an all-time high and privacy regulations continuing to make waves in the tech industry, business leaders must ask themselves how to create an effective transition plan.
As the pandemic continues to create concerns about demand patterns and supply chains—logistics, manufacturing, and transportation professionals must focus on meeting customer demand. Through cloud managed services, IT leaders have the opportunity to rebuild their IT infrastructure by moving previous hardware-based solutions to the cloud.
For manufacturers and shippers experiencing the impacts of the semiconductor chip shortage, it may be difficult to see the light at the end of the tunnel. Experts optimistically predict—and hope—the shortage will be alleviated by 2023. Until at least then, consumers can expect to see continued product delays while industries do their best to mitigate this material shortage through the adoption of pervasive technologies like cloud infrastructure.