In this age of globalized trade and finance, supply chain management has become a complex problem. Companies need to engage in complex and advanced planning and oversight of goods and services from suppliers down to customers. Furthermore, the end-to-end visibility of supply chain and real-time data, and accurate predictive analytics have become key to ensuring the timely delivery and availability of products. Needless to say, these complex processes cannot be done effectively without a digitalized solution. Here comes a Supply Chain Management Software solution or SCM.
SCM software solutions have revolutionized the complete supply chain management. It has helped business owners plan, execute, and monitor the flow of goods and services from point of origin to point of consumption. This vital software solution plays a key role in improving efficiency, reducing costs, increasing customer satisfaction, and achieving sustainability goals in the whole supply chain cycle.
However, selecting the right SCM software solution can be tricky. But don’t worry. This comprehensive blog will delve into complete details regarding how to choose the right software for supply chain management, what are the key features of a suitable SCM software application, and how you can avail multiple advantages by implementing a supply chain management software solution.
Let’s start the ball rolling!
But first, let’s take a step back and start with the basics. We start with a basic understanding of Supply Chain Management Software.
What is a Supply Chain Software Solution:
Supply Chain Management software is a specialized type of software product that helps businesses streamline and optimize complex processes involved in the supply chain. This software solution can help manage all aspects of the supply chain such as the flow of goods, services, information, and finance from the supply of raw materials all the way to end consumers.
SCM software solutions allow you to plan, execute, monitor, and predict movement from goods across the entire cycle of the supply chain. For instance, you can manage all these aspects of the supply chain.
- Inventory management
- Demand Forecasting
- Supplier Relationship Management
- Order Processing
- Logistics and Transportation
- Warehouse Management
- Production planning
- Collaboration and communication
- Risk Management
- Data analytics and reporting
- Integration
- Sustainability and compliance
By providing these features, supply chain management software helps businesses adapt to the fast-changing nature of the market and remain competitive in the global economy.
This brief description makes it clear that supply chain management software applications have become to ensure competitiveness in the market. But the next question is how you can ensure that the product you are looking into is the right one and that it contains all essential features that make supply chain software a perfect remedy for all your needs.
Here is the answer.
Key Features of a Supply Chain Software Solution:
Here are some essential features that you must look into a supply chain software to ensure that all your supply-related tasks can be performed effectively.
Real-Time Capabilities and Collaboration:
The real-time information concerning the movement of goods is key to ensuring customer satisfaction and removing potential bottlenecks like missing goods etc. In this way, businesses can quickly respond and address any issue that may arise and endanger the reputation of an organization.
Similarly, to ensure effective supply chain management collaboration and coordination among various stakeholders should also be there. All stakeholders must be able to communicate smoothly and work coherently.
Hence, the right supply chain software must possess real-time and collaboration capabilities. It must feature a personalized dashboard, real-time notification, self-service portal, and role-based authorization. All these features help organizations increase collaboration and ensure end-to-end transparency and visibility across all phases of the supply chain.
Procurement and Supplier Management:
The ultimate goal of every procurement team is to purchase the right amount of needed material of the right quantity and quality and that is also within the competitive price range. This is not an essay task. Only the right supply chain software can help you perform these tasks quite effectively. But it possesses these features:
- The market is flooded with vendors supplying materials and equipment. The finding, comparing, checking, and shortlisting of vendors based on some criteria should be done automatically. E-source feature of supply chain management software helps perform some of these tasks.
- After shortlisting the potential vendors, narrowing down a vendor is another major challenge. The supply chain software sends questionnaires automatically to all shortlisted vendors. These vendors then fill out these questionnaires and respond. The information is thus collected and automatically appears in your database.
- The information collected through the above-said procedure is analyzed and scanned. Your requirements are thus checked against the data and vendor(s) are shortlisted finally.
- All selected vendors are sent invitations for tendering. These vendors then submit their bids to the system. All these procedures of e-auctioning are completed automatically.
- The right supply chain management possesses another important feature which is document management. Through this feature, the document trail such as purchase orders, contracts, and seller proposals are maintained and managed.
- Finally, the software should be capable enough to perform P2P(Procure-to-Pay) operations automatically. P2P operations are related to the financial transaction to the final supplier(s). This involves the creation and tracking of purchase orders and management of checking and payment invoices etc.
To facilitate this process, the procurement and supplier management can be augmented with analytics. This combined work of analytics and supply management gives you many added advantages. For instance, analytics can help you gain insights about the performance of your vendors such as speed of order completion, price, accuracy, and quality of delivered goods or services.
Therefore, it would be a great idea to have analytics along with procurement and supplier management modules.
Analytics and Forecasting:
Built-in analytics and forecasting capabilities are also must-have features of any right supply chain management solution. These capabilities are key to helping you gain invaluable insights. For instance, it helps identify bottlenecks in the supply chain, anticipate customer demand, and capitalize on your unique strength.
And more importantly, analytics and forecasting features can provide predictive analytics. Predictive analytics analyze both demand trends and other external trends such as industry, regulations to help you strike a balance between demand and supply.
The application of AI tools in supply chain management software has resulted in more feature-rich software solutions. The integration of AI and machine learning helps businesses identify risks and vulnerabilities and notify the concerned stakeholders. In this way, businesses can avoid buying unnecessary raw materials and plan procurement and production in line with future trends in the market.
Logistics and Distribution:
Logistics and distribution are the most important elements of supply chain management, apart from supplies, manufacturing, and retailing. If you are looking for the right SCM solution that best serves your needs, never overlook logistics and distribution modules.
The logistics and distribution modules help you perform many tasks crucial for efficient supply management.
It can help you execute properly and systematically the transportation planning. This transportation planning would be key in distributing transportation orders, selecting suitable carriers, assigning transport, calculating loading space, and finally generating documentation.
Furthermore, you can optimize routes, manage the fleet, and automate many of the administrative functions such as payment processing, claim management, report generation, etc.
In short, this must-have feature helps optimize transportation routes, select appropriate carriers, and monitor shipments in real-time. This will help you reduce transportation costs and improve delivery time and services.
Inventory Management:
Inventory management is a complex job. You need many things to ensure efficient supply management, for instance, assemblies, uniforms, raw materials, finished products, equipment, and the like. Without a SCM offering an inventory management module, you will find it extremely hard to perform these tasks.
- An inventory management module helps you perform many tasks. For instance:
- The tracking helps you track and organize tracking items, allowing you to know about missing or surplus items.
- The barcoding feature has become a key tool in creating, assigning, scanning, and tracking barcodes. Without this barcoding feature, it would be next to possible to carry out these vital functions.
- In case there is a situation of stockout, the module automatically detects that item creates a purchase order, and sends it to a supplier.
- There is also a First-in and First Out (FIFO) feature. FIFO functionality makes sure that the oldest items in the store are sold or consumed.
In short, the inventory management module is a tool to effectively monitor and track inventory levels so that businesses can avoid carrying costs and remain competitive and profitable entities.
Cloud-Based Supply Chain Software Solution:
The cloud-based supply chain software solutions have many advantages to offer. For instance, a business owner or supply chain manager can track, manage, and control all aspects of the supply chain on the move. If you have mobile phone-based access to SCM software, it will give you more opportunities to remain updated on various stages of SCM.
Another advantage of using cloud-based access to supply chain software is that you are kept in the loop with real-time alerts. The collaboration among suppliers, manufacturers, retailers, and logistics providers is enhanced and immediate remedial measures can be undertaken in case there is an emergency.
Therefore, you should make sure that the software you are looking to buy or build must have cloud-based access and resultant space to manage the supply chain when you are on the move.
Robust Security Features:
Like in every industry, domain, or niche, data security is a paramount concern of every organization. Hence, if you are looking to buy or build a SCM software product, you must make sure that it possesses robust security features.
By way of illustration, the right SCM software solution should feature data encryption, virus scanning, network monitoring, audit trail, and fault tolerance. The security features must be robust enough to prevent any unauthorized access to data for any nefarious design or with malicious intentions.
Here are some key features you should look at when purchasing or building a supply chain software product. Now, we look at why you need to invest in a SCM solution and how it is going to impact your supply chain business and management.
Why You Need a SCM Software:
As has already been discussed the right SCM software helps you command the entire chain of supply from sourcing of raw materials to product delivery and everything in between. But how a SCM software solutions help you reap benefits? Let’s dig in and answer this question in detail.
Here are some of the factors that make implementing SCM software to improve supply chain management a much-needed imperative.
Improved Customer Satisfaction:
Customer satisfaction is key to ensuring a successful and profitable business. In particular, customer satisfaction in supply chain management has become a prime touchstone to measure the success or failure of a business.
SCM software solutions enable companies to provide excellent customer service. You can enable customers to order and ship their products in real time and provide up-to-date information concerning the delivery of products. Due to these factors along with others, SCM has become a powerful Customer Relation Management source to build your reputation and earn customer satisfaction.
Likewise, SCM software helps organizations predict any possible problem and proactively resolve them. This proactive, rather than reactive, resolution of issues further enhances customer satisfaction.
Effective Liability and Risk Management:
Effective and proactive risk and liability management is another major benefit of implementing SCM software. It helps businesses utilize various tools to identify many risks and liabilities such as supply disruption, demand fluctuation, and geopolitical tensions. The timely evaluation and assessment of these risks can help you design continent plans to mitigate and adapt to these risks.
Similarly, SCM software solutions provide risk assessment frameworks and models. The assessment frame enables you to prioritize more serious and impactful risks and allocate resources accordingly. In any mitigation strategy and contingency plan, these assessments come in very handy.
Real-Time Traceability and Visibility:
SCM software helps organizations and businesses access real-time tracking and view of the entire supply chain. This 360-degree view of the supply chain allows businesses to track the movement of products and products and provide accurate information to customers regarding arrival time, etc.
Moreover, SCM software applications can help improve collaboration, coordination, and data-sharing among suppliers, distributors, and retailers. This collaboration comes in very handy in case a customer asks a question concerning the delivery status of ordered products.
Wrapping Up:
Effective supply chain management has become a very complex and specialized job. Ordinary means of managing the entire chain of movement of goods and materials have become inadequate to manage and tackle such a complex job.
Supply Chain Management Software solution or SCM solution has become a key digital intervention to digitalize supply chain management. SCM has been a source to ensure enhanced customer satisfaction, improved coordination and collaboration among various stakeholders, and provide better traceability and visibility tools. More importantly, SCM software is also a key measure to ensure mitigation and adaptation to potential and existing risks and liabilities.
But not every SCM software available on the market should be your choosing. You should select it carefully and make sure it possesses some features. These essential features are real-time collaboration capabilities, analytics and reporting, supplier and procurement management, warehouse management, demand forecasting, logistics and distribution, cloud-based accessibility, and the like.
Hope, this write-up will help you implement the right supply chain management software and thus achieve all the above-discussed benefits, among others for your organization.