Supply Chain Management Software: An Overview
Supply Chain Management software has become a core function for most businesses. Over the years it has undergone dynamic restructuring and evolution. Its nascent stage in the 1960s was characterized by Physical Distribution Management (PDM) and re-engineering. Today’s supply chain managers are familiar with SCM systems of the SaaS model, which has issues such as TQM (Total Quality Management), VMI (Vendor Managed Inventory), and ECR (Efficient Customer Response) successfully integrated into the domain of SCM.
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Technical jargon aside, Supply Chain Management involves making sure that the entire network of processes and organizations that are involved in converting and conveying a company’s goods to the end consumer, functions smoothly.
Why Do You Need an SCM Software?
Does my company even need an SCM Software?
If you manage a mid/large sized enterprise which deals with a considerable volume of products, your supply chain is incomplete without a good SCM software.
And if you’re a smaller firm, you still need to ensure that you offer quality products at competitive prices. Therefore, efficient management of supply chain logistics is imperative. And what can be a better way to do so than by investing in a good Supply Chain Management Software?
Factors to consider before choosing the right supply chain solutions:
1. How much of your budget can you allocate
You can decide between perpetually licensed and subscription software, depending on your budget.
2. The extent of integration you want from the software
Choose a Supply Chain Management software that will integrate smoothly with existing systems. It should be capable of adequately communicating with your clients’ and suppliers’ systems as well.
3. Specific Functionalities that you’re looking for
Depending on the type of business your company is engaged in, you might require specific functionalities in your SCM software, such as EDI (Electronic Data Interchange) or RFID (Radio Frequency Identification).
4. Degree of Automation
The impact of the resulting automation from SCM software on the daily workflow of the employees must be adequately assessed before investing in it.
5. SaaS vs On-Premise Software
Both have their own pros and cons. Cloud-based or SaaS software will be cheaper, provide better connectivity, and robust data redundancy. On-Premise SCM software although are more expensive allows a greater sense of control and deeper customization options.
Depending on your specific business needs you can choose an appropriate SCM software.
How Will It Help Your Business?
A proper Supply Chain Management System adds to customer value and helps the user to develop a reliable advantage over competitors. It does so by providing these key benefits:
1. Cost Reduction
An obvious advantage. SCM software cuts down on excessive costs by making other processes more efficient. It improves the Inventory Management System and reduces wastage. Transportation, shipping, and transaction costs all can be taken care of by a single TMS software.
2. Saving Time
An SCM software will fast-track your entire system of interconnected processes. Major supply chain logistics processes such as Order Processing, Invoicing and Shipment Tracking will be automated. This does not just reduce administrative costs but reduces overall time.
Automation necessitates integration. If we can automate our processes, we would also like to have them integrated into a single platform so that our operations become even easier to handle. Large firms which have more offices and sell a greater volume of goods across scattered geographical locations are especially in need of integrated supply chain solutions.
They are looking to streamline their operations and collect key business data such as inventory levels and supplier information across their diverse channels. Supply Chain Management software can integrate with existing systems to provide better visibility across the supply chain logistics network.
4. Forecasting and Decision Making
Any business that has a supply chain has to keep track of the discrepancies between demand and supply, both of which can be quite volatile. As a result, forecasting assumes a role of great importance in supply chain logistics. SCM software can facilitate the process of forecasting by synchronizing supply and demand cycle through the use of real-time data.
5. Risk Aversion
Supply chain logistics is a domain that is extremely vulnerable to risk and uncertainty. Most networks are prone to a number of internal and external risks. Additionally, the interconnectedness of its disparate elements poses the risk of the domino effect in case any one of the components malfunctions. Hence, risk management becomes a priority for supply chain managers.
6. Collaboration and Communication
In addition to greater visibility across the network, supply chain solutions also promote greater collaboration and communication between partners, suppliers, and distributors.
7. Improving Customer Experience
Supply chain management software is ultimately a great investment because it contributes immensely towards an enriched customer experience. If your business routinely receives complaints regarding shipping errors and delays, or grievances regarding products being perpetually out of stock, it is not a good sign. At some point, they will be put off entirely and switch immediately to a different provider.
That’s what makes choosing the right supply chain solutions so important. We don’t want our customers to turn away, we want them to come back. The biggest benefit of a Supply Chain Management system is that it helps you to improve your relationship with the customer. It promotes refinement of all the connected processes, obviating the risk of a customer being dissatisfied.
Any supply chain manager would do well to invest in a supply chain solutions. It goes without saying that the needs of your business should come first when you decide to install a software, and this holds especially true for businesses which rely heavily on supply chain logistics. The type of software and customizations will vary across different software. It can be expensive, especially if the on-premise variety is opted for.
At the end of the day, if you choose wisely and make an informed decision, an SCM software will confer all the aforementioned advantages to your business. An increasing number of companies have decided to rely upon software-based supply chain solutions to carry out the successful fulfillment of their increasingly complex orders. Yours can be one of those too.