Supply chain management software, also known as SCM software, is a term used to refer to programs and applications that assist in the planning, coordination, and optimization supply chain activities.
There are hundreds of companies around the world that provide these solutions, and they tend to vary in both form and function.
The supply chain, be it the local, national, international, or global, is all about managing the flow of goods, information, and finances from the point of origin (supply) to the point of consumption (demand).
Over the past few decades, various types of SCM systems have been designed to aid companies at different points in the chain.
Different Types Of Supply Chain Management Software
There are several different types of supply chain management software, each of which is focused on one or two specific tasks.
Generally, developers will take a specialized approach This means they will develop different types of SCM software for each individual problem, be it procurement and inventory management to logistics and demand forecasting.
The ultimate goal is to solve that issue, while also helping the business enhance efficiency, reduce costs, and improve collaboration with suppliers and partners.
Below, we’ll outline some of the most common types of supply chain management systems and their respective functionalities.
Order Processing
Order processing is one of the most common types of supply chain software out there. Put simply, it is a system designed to help businesses efficiently process orders so that they can better satisfy clients and generate revenue.
In most cases, the solution helps the supply chain manager implement tools that automate and expedite daily operations.
The best examples provide options for processing orders, tracking their progress, generating automated bills, and creating purchase orders and invoices.
Not only does the introduction of automation help reduce errors, but it ensures that both the manager and their employees have more time to focus on valuable tasks instead of boring data entry and administration.
Inventory Management
If someone types supply chain management software into a search engine, many of the products they find will focus largely on inventory management.
The point of such software is to help companies better optimize their warehouse space, streamline production planning, and predict demand so that they can avoid shortages.
Some advanced warehouse management tools are even equipped with artificial intelligence. These new systems can perform a vast array of functions, including intelligently organizing inventory by production or expiration date. They can also group shipments that need to be sent on the same date, saving both time and money.
Warehouse Management Software
Certain types of SCM software will go beyond mere inventory management and also include functions for managing the daily operations of a warehouse.
These solutions generally come with advanced planning tools that allow warehouse managers to streamline the process of receiving and organizing incoming orders, perform high-quality order tracking, and optimize the movement of goods inside the warehouse.
Though there are “off the shelf” WMS options available, most companies prefer to have a bespoke system designed just for them.
This way, they can include all the features they want without having to waste time integrating functions they won’t use.
Dispatching
Though ships and planes are the preferred methods of intercontinental travel, the United States, Europe, and many other parts of the world rely on a network of trucks and delivery vehicles to keep their supply chains intact and working.
Dispatching simplifies these operations by automating tasks like routing trucks, monitoring the condition of delivery vehicles, and scheduling.
Due to the cost of fuel, the integration of dispatching functions into an SCM can end up saving a company significant amounts every year.
Demand Forecasting
Demand forecasting solutions are vital to both inventory management and labor planning within a given supply chain. The term refers to highly sophisticated tools that crunch vast amounts of data to predict future demand.
With this information in hand, a warehouse or supplier can then take steps to optimize their inventory levels and plan resources efficiently.
Modern demand forecasting software often incorporates machine learning algorithms to make predictions based not only on historical data but also on current market information.
By leveraging these tools, businesses can produce highly accurate forecasts and improve operational efficiency.
Shipment Optimization
Accurately tracking orders across the entire enterprise can be challenging for companies with more extensive supply chains.
Like the dispatching tools mentioned before, SO solutions help by automating the tracking process and providing real-time updates at each stage of the shipping journey.
In many cases, warehouse managers and logistics specialists can get access to critical data so that they can quickly address any issues they might encounter.
In many cases, this works whether the problem occurs down the road or on the other side of the world.
Sourcing and Procurement
Managing a supply chain involves understanding and evaluating supplier bids. However, managers need clear insight into their current and potential costs to do this properly.
Luckily, bid and spend software can help automate procurement while reducing errors and optimizing spending.
Most solutions do this by helping users evaluate supplier bids and get better control over approvals and spending limits. Some more robust systems will also include performance analysis tools to help users evaluate and maintain supplier relationships.
Business Intelligence
Business intelligence software allows users to analyze mountains of data faster and more thoroughly. This data often contains clues about how various parts of the business can improve, grow, increase revenue, or further reduce costs.
Some solutions also allow users to assess overall performance, evaluate the success of marketing campaigns, and identify sources of delays or errors in their processes.
Customer And Supplier Management
Customer Relationship Management (CRM) platforms are used in all sorts of industries. Generally, their function is to centralize customer and supplier-related information.
This is the same for companies working in the supply chain. For instance, a good CRM can help managers track interactions, automate communication processes, and perform analytics to understand how different customers or suppliers impact the organization.
This information enables targeted campaigns to prevent customer turnover and even maximize revenue from specific groups.
Collaboration
Effective collaboration is essential for the smooth functioning of any business. However, this is particularly vital to those companies operating in the supply chain because they are so reliant on their partners.
And with so many stakeholders involved chain, it’s important to have systems in place that facilitate communication.
Collaboration tools often include project management solutions and chat software. These can be used to discuss order issues, address bottlenecks, negotiate new contracts, and work with team members on specific tasks.
Does SCM Software Need To Be So Spread Out?
As impressive as these individual solutions are, they beg the question: is there one SCM software suite that can do all of these things? The answer is yes. In fact, there are SCM solutions that can do all of this and more.
However, the best way to find it is not to shop for the software itself but to look for a development partner to build the SCM you and your business need.
By working with professionals who can listen to and evaluate your unique needs, you can end up with an SCM that is tailor made to produce the best results at ever step in your business process.
