Supply Chain Management Software: Key Benefits, Essential Features and Importance
- Having the right supply chain management software is essential to manage today’s complex global supply chains.
- A modern software platform will enable enhanced visibility and collaboration with partners, while reducing costs.
- Real-time information flow among supply chain partners is key to maintaining compliance and allowing the supply chain to function as an integrated system.
October 07, 2022 | Supply Chain Software
Trade in the modern world spans the globe. To support this global trade network, supply chains have grown proportionately large and are now a complex ecosystem of suppliers, logistics providers and buyers.
Supply chain management software helps manage this ecosystem and ensure the efficient movement of goods and data from the point of manufacture to the end of consumption.
What Is Supply Chain Management (SCM)?
Supply chain management (SCM) encompasses the planning, implementing and controlling of the flow of goods and services to efficiently satisfy customer requirements. SCM includes the transport and storage of raw materials, work-in-process inventory and finished products from their point of manufacture to their delivery to customers.
Supply Chain Management: History, Future, and the Cloud
Supply chain management has evolved from logistics and operations management to a tech-driven, strategic function that has integrated sourcing, manufacturing and distribution.
The 1950s saw the early foundations being built around inventory optimization and logistics integration. The 1980s saw supply chain management expand to a global level, along with strategies emerging with outsourcing and contracting models. However, the rise of enterprise systems began in the 1990s, with the focus shifting on supply chain integration and core competencies.
Going by the current level of development in both scope and impact, supply chain management will continue to be driven by AI, ML, along with predictive and advanced analytics, control tower system, and omnichannel distribution. Cloud will continue to provide the necessary infrastructure for interconnected, customer-centric supply chains.
What Is Supply Chain Management Software and Its Functionality?
Supply chain software is a technology tool to manage supply chain activities. The use of SCM software covers areas including vendor management, logistics and final distribution. Using SCM software provides enhanced visibility and control over the complex supply chain, enabling greater organizational productivity.
No single SCM software fits everybody’s requirements. A high-end tool with unnecessary features could be overkill for a small business. At the same time, a limited solution would be inadequate for a large company's business goals.
Also read: Why You Need A Digital-First Supply Chain
Critical Benefits of Supply Chain Management Software
The key supply chain management software benefits include:
• Enhanced efficiency
The ability to pre-empt and eliminate bottlenecks improves operational efficiencies. Also, integrating the SCM software with existing systems helps automate routine tasks and increases workplace productivity.
• Increased visibility
End-to-end supply chain visibility enables greater data sharing and aids collaboration between the business and its suppliers, distributors, retailers and customers. This supports greater control over the supply chain.
• Cost savings
The SCM software enables cost savings through better inventory management, waste minimization and payment tracking. Cost savings have an overall positive impact on the bottom line.
• Risk mitigation
External macroeconomic, environmental, regulatory, political and technological factors pose a disruption risk to the supply chain. A key SCM software benefit is that it helps businesses identify these risks earlier and avert their disruptive effects.
• Agility
Greater visibility of the supply chain provided by the SCM software equips the organization to react quickly to disruptions and continue to serve customers.
• Analytics support
SCM software provides real-time access to the supply chain's data, enabling tracking, performance monitoring and data-based decision-making.
• Compliance
The SCM software has all compliance requirements built-in, thereby reducing the possibility of human error and enabling complete regulatory compliance.
Essential Features of Supply Chain Management Software
The supply chain management software features that are essential from a strategic viewpoint rather than just meeting functional requirements include:
• Inventory management
This feature enables firms to streamline and control stock levels, place new orders and ship orders on a single platform.
• Real-time information
The availability of real-time information through detail-rich dashboards and real-time alerts helps avoid roadblocks, monitor inventory and anticipate expected needs.
• Analytics and forecasting
The best supply chain management software should have built-in analytics and forecasting through graphs, as well as MIS reports to forecast demand, plan production and predict customer demand.
• Cloud-based access and mobility
The software should enable access by authorized personnel from anywhere, at any time, on any device. This feature allows continuous management, tracking and monitoring of the progress of transactions.
• Security
Data security is critical for any business software. Any top supply chain management software should include data encryption, virus protection, network monitoring, audit trail and fault tolerance.
• Order management
It is essential for SCM software to track an order from when it is placed to when it reaches the customer. This feature enables the seamless integration of orders across channels.
• Field service management
Field service management functionality includes the end-to-end activities of scheduling, inventory, invoicing, billing and accounting involved in managing remote operations.
• Intuitive user interface
The user interface should be intuitive. If the UI is too complex, even the best software will prove challenging to use and fail to serve its intended purpose.
Also read: Low-Code/No-Code: Supply Chain Platform For The New Normal
Importance of Supply Chain Software
Supply chain management software enables users to supervise and manage the efficient movement of finished products and data from the point of manufacture up through delivery to the customer.
The supply chain management software optimizes the entire supply chain process through automation. It provides a real-time flow of information, automates repetitive tasks, eliminates human error, reduces costs, enhances customer satisfaction and eases supply chain management to deliver a significant positive impact on the bottom line.
Strategic Advantage of Supply Chain Software
Supply chain operations require well-designed SCM software to manage the demands of complex, global supply chains and to maintain compliance across international borders. SCM software provides a strategic advantage, enabling businesses and their global supply chain partners to function as an integrated system.
