Managing the complexity of the supply chain
Supply chain management software takes a holistic approach to maximizing cost reduction opportunities involved in getting product provisioned from the vendor to the customer. If you’re involved in managing a company that sells products, the underlying question of how to reduce supply costs is something that guides all your decisions. And, what a complicated set of decisions it is! Who to buy from? When to buy? How to take delivery? Where to send it? How to get it there? Have they received it? It’s a lot to track. Now, multiply those questions times your transaction volume. Every day. At each of your locations!
And, that just covers the tactical side of things. Consider the strategic business analysis angle: now, you are now talking about questions of network optimization, business partnership planning, product life cycle management, and more.
Getting your products from the supplier, processed, and on to the customer, is complex. To help simplify this complexity, there has arisen a robust industry of software developers—each providing different solutions and approaches to optimizing the supply chain.
A systems approach: understanding SCM functionality
The word “system” is often applied to supply chain software. It is an apt term. Supply chain management software is something much more extensive than what could be referred to as a “module” or an “application.” In fact, it’s fair to say that the average supply chain system is really a collection of modules or applications, whose data all needs to be brought together to provide a full picture of the supply chain.
Let’s take a look at some of the elements—or sub-modules that can make up a supply chain management program:
- Requisition and approvals management
- Purchase order management
- Vendor management
- Demand planning
- Sales forecasting
- Warehouse management
- Inventory control
- Product lifecycle management
- Delivery optimization planning
Matching the right program to your needs
One of the biggest challenges related to finding the right supply chain management is simply matching the program with the right software scope to your needs. If you’re running your own fleet of delivery vehicles, your needs are very different than the company outsourcing delivery. Or, maybe you have a large number of distribution centers you operate. Your needs are different than the company looking to lease warehouse space. You get the picture. The good news is that industry is coming up with new niches to serve and new combinations of functionality to offer every day.
Beyond the issues related to specialization and scope of needs, there are other variables to consider when looking at the variety of SCM options. Looking at the list of sub-modules that appeared earlier in this article, you may have noticed something. A lot of the modules listed represent functionality likely provided by your ERP system or some other existing information system. This is not uncommon. The diversity of supply chain management functionality means that the originating functionality may exist in another program. Consequently, supply chain management programs often are software whose main role is to provide the intelligence to correlate information originating in disparate programs.
Supply chain management and software integration
If you have experience managing the integration of multiple information systems before, you know that this is practically a science in its own right. Many supply chain management programs are designed with consideration given specifically to integrating with particular ERP programs. But, this doesn’t mean integration is automatic or hands-off. Linking systems of the complexity required for effective SCM is a complex process. It requires significant customization and a careful approach executed by experienced technical resources. Because these integrations don’t happen often, it’s a skill most companies are unlikely to find even within the staff members of an experienced technical team. Generally, implementing a supply chain management requires hands-on assistance from a technology partner specializing in these sort of implementations and integrations.
The challenges related to finding the right SCM program can appear daunting. A software matching service, like the one provided on this site, can help fast forward your review process by getting you matched to appropriate options. Nevertheless, there is still much to think about when it comes to considering a purchase of supply chain management software. There are real reasons that you may not want to take on the task of finding a new supply chain management program. While the right program is the one that delivers a strong ROI, the I is still required to achieve the R. You may have other projects, investments, or initiatives competing for investment funds. In making your decision though, it’s worthwhile considering the myriad benefits related to improving your supply chain management capabilities:
Key supply chain management software benefits:
- Eliminate delays that lead to decreased customer satisfaction.
- Identify the vendors providing the most attractive rates.
- Maintain just-in-time inventory and save warehousing costs.
- Avoid shortages and back-orders that lead to lost business.
- Optimize warehousing requiring less space or fewer facilities.
- Provide real-time updates to customers on order provisioning status.
- Utilize historical data to feed future projections and forecasting.
- Decrease turnaround time.
- Reduce holds up on the production line.
One of the under-appreciated aspects of working with a qualified SCM vendor is that they offer something that can be difficult to find: namely, the experience to help you understand the potential dollar value of the individual benefits an SCM program can offer. If you’re ready to begin uncovering which supply chain management options may be right for you, we’re here to help. Get started today!