Supply chain management software (SCMS) is the software tools or modules used in executing supply chain transactions, managing supplier relationships and controlling associated business processes. While functionality in such systems can often be broad – it commonly includes:Goods receipt and Warehouse management.
Supply chain management software is a business tool that helps you manage your supply chain with greater efficiency. Most software systems have rich features that can streamline your supply chain operations from start to finish.
Many different types of supply chain management software exist. Some come as a standalone application or program; others are a part of broader solutions, such as customer relationship and enterprise resource planning systems.
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Key Features of Supply Chain Management
Inventory management. for tracking and managing the availability of raw materials, the quantity of stocked goods or spare parts. This feature can also help with asset management, barcode integration and future inventory and price forecasting.
Order management. For automating purchase order processes. For example, generating and tracking purchase orders, scheduling of supplier deliveries, and creating pricing and product configurations.
Logistics and shipping status. For coordinating transportation channels, improving delivery performance and boosting customer satisfaction. Warehouse management features can help with storage optimisation, labelling, labour management and more.
Forecasting. For anticipating customer demand and planning procurement and production processes accordingly. Efficient forecasting can help remove the need to buy unnecessary raw materials or store excess finished goods on warehouse shelves, hence reducing costs.
Return management. For inspection and handling of damaged or faulty goods, and processing of refunds or insurance claims.
Benefits of Supply Chain Management
Accurate Information. Without supply chain management, manufacturers, wholesalers and retailers each perform activities like forecasting and business projections independently. With SCM, resellers shared inventory and demand data through a process known as electronic data integration. EDI allows buyers and suppliers to sync computer inventory systems, which allows for more automated inventory processes. Because suppliers have access to reseller inventory and demand data, they can better plan production or storage levels to meet the near-term needs of resellers.
Cost Advantages. By collaborating, each member of a supply chain or distribution channel achieves cost-efficiencies. Producers only make the goods necessary to meet near-term demand, which allows them to avoid wasted production and to better plan resource allocation. Similarly, wholesalers can manage space, people and transportation systems effectively. Retailers benefit from just-in-time inventory control, which helps them guard against excess holding costs and wasted product that expires or perishes.
Shared Risks. A natural result of the partnerships that develop through SCM is shared risk. Retailers rely on a small number of trusted suppliers, while suppliers focus on optimizing a smaller number of preferred buyers. While trusting partners brings on some new risk, it also causes each channel member to take a vested interest in the success of other members. Retailers, for instance, have a reason to support the ongoing business success and sustainability of suppliers that contribute to a quality, high-value offering to its consumers.
Improved Profitability. When optimized, supply chain management gets the right products in the hands of a company's top buyers at the appropriate time. This optimization allows for high levels of customer satisfaction, which contributes to strong revenue. Combined with the cost-effectiveness benefits of SCM, high revenue leads to strong profit as well. By optimizing the channel's cost structure and consistently delivering value to consumers, the members of the distribution channel also gain stability in their operations.
Reduce Shipment Costs. Utilizing a supply chain solution can reduce shipment costs by offering increased visibility into shipment options available. Without adequate visibility into logistics operations, many businesses may not realize that shipping by sea may be a much more cost-effective option for a particular shipment than shipping by air. Using technology to evaluate modal options can greatly reduce a company's overall shipping costs.
Improve Customer Service. Logistics technology allows the tracking of shipments, materials and products both on the supply side and the delivery side of a business’ operations. Streamlining operations using an order management system puts products into the hands of customers quickly and reliably. Real-time visibility into the diagnosis of a possible problem enables a business to quickly diagnose the issue and provide a quick solution to help maintain customer satisfaction.
Improve Compliance Rates. A logistics software solution enables an organization to effectively leverage the negotiated lanes and preferential terms established for a business by centralizing rates and contracts within an electronic database that has the capability to provide access and innovative decision support tools all in one place. The best logistics software providers centralize rates to display information from all carriers and modes after entering the data only once, streamlining the process and allowing employees to efficiently choose the best rate for a particular shipment.
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