Supply Chain Management Software: Strategic Managing

Companies must go through a five step process in order to get products or services to its customers. Supply chain management or SCM is the science and art of managing those five steps. Manufacturing companies, for example, need to plan out their needs, select sources of raw materials, make their finished products, deliver them for sale to customers, and return.

In SCM a plan is the strategic portion for managing all the resources that go toward meeting the customer demand. A source chooses the suppliers who will deliver the goods and services needed to create the product and develop a set of prices, delivery methods and payment processes with the suppliers.

“Make” refers to the manufacturing process, including the schedules related to production, testing, packaging, and readying for shipping. “Deliver” refers to the planning that is often called “logistics” in a company. It relates to processing clients’ orders, creating a functional warehousing network, and so on. “Return” relates to setting up the means to accept clients’ returns of faulty or excess items and aiding clients who need assistance in regard to the items they have received.

For any retail or manufacturing company, their most disjointed group of software applications is probably their supply chain management software. There are many specific tasks for each of the five major supply chain steps, and specific software options available for each step. Although some software vendors have bundled groups of different software together, a coherently unified software package that can suit every company did not exist until just recently.

“Systems are only as good as the information they contain” is doubly true for SCM. When incorrect information is entered into a demand forecasting application, the results will provide an incorrect forecast. It is also true that if employees attempt to manage information manually, bypassing supply chain systems, an incomplete picture will be provided of pertinent company data. Management training and management coaching are vital, then, in order for supply chain management software to be correctly utilized.

The process of removing humans from the supply chain is quite difficult. Most companies are too small to declare an immediate change in supply chain management software, even if the new product works better. Such alterations require retraining of employees and change in the way parts are obtained. In the real world, finesse must be applied to convince everyone that such a change is for the benefit of all.

The world’s most fractured group of software applications may be supply chain management software. There are dozens of specific tasks in each of the five major supply chain steps. Many require their own special software. Also the old adage about systems only being as good as the information that they carry applies to SCM doubly. If the employees bypass the supply chain systems and try to manage things manually, then the systems will provide an incomplete picture of what is happening in a company’s supply chain. So management training a management coaching is necessary for the correct working of this management software.