Initially, firms used to engage in all the processes involved in producing goods and services including sourcing for the raw materials. The aim was to cut costs, produce more goods and increase profits. Large inventories were used to sustain the mass production. Due to the increase in competition, systems such as material requirement planning were employed to try and manage the vast inventories.
In the early eighties, market globalization brought new opportunities to reach out to global markets. This necessitated a change in the process of producing goods and services. For instance, manufacturers started to engage with various suppliers, and over time, the supply chain grew rapidly, becoming one of the most significant sources of competition. Furthermore, the advancement of information technology brought about the concept of supply chain management (SCM).
What is Supply Chain Management software (SCM)
Supply chain management (SCM) encompasses the activities and processes involved to transform goods and services from raw materials to the final product presented to the customer. On the other hand, supply chain management software (SCMS) involves the tools and modules that enable firms to enhance activities and processes related to the supply chain. SCMS is mainly categorized into four groups.
- The supply chain planning (SCP)/advanced planning software (APS) - These are applications that help to control the planning processes associated with the demand for products, the supply of raw materials, scheduling, etc.
- Supply chain execution (SCE)-These are the applications used to control and monitor the operational process of the supply chain. Some of the systems include inventory management, order management, and others.
- Supply chain collaboration- These are web-based applications that help to acquire, transmit and monitor information across a more extensive supply chain.
- Supply chain performance- These are applications used in the analysis of information related to demand, supply, inventory, etc.
What Are the Benefits of Supply Chain Management Software?
Supply Chain Management System Software can bring immense benefits to your business. In fact, it can result in the smooth execution of tasks leading to improved performance and productivity. Below are some of the benefits of SCMS.
- Improves Relationships - Perhaps one of the most significant advantages of the SCMS is to enhance the relationship with vendors. It contains features and functionality that facilitate higher cooperation with suppliers and other partners. Additionally, it provides managers with essential supply chain information for improved decision making.
- High Efficiency - Integrating supply chain management software in your business helps to eliminate wastages incurred during the production process. In most cases, wastage results from poor planning and mismanagement. Additionally, SCMS will enable you to improve the production process and only produce according to the demand.
- Increased Profits - The biggest aim of operating a business is to get the profits. A lot of profits are lost due to improper and poor production processes. SCMS will enable you to improve the production process which will translate into more profits. The return on investment overrides the initial cost of installation.
Popular Supply Chain Management Software
- Plex - Plex is ERP cloud-based supply chain management software that captures essential information in the supply chain and communicate it in real-time. It features additional features such as CRM, financial management, order management, inventory control among others.
- Kinaxis RapidResponse - Kinaxis RapidResponse is one of the popular supply chain management solutions in the market. It provides businesses with supply chain planning and information analysis. This enables businesses to manage and monitor the supply chain planning process and others operational processes. It also features master production scheduling, inventory management and optimization, integrated labeling among others.
- Coupa Procure - Coupa Procure is pay-per-use software that enables the user to manage crucial aspects of the business such as the employees and finances. Also, it provides control over the procurement process. It will help manage your business and keep operational and other costs within the budget.