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Benefits of Supply Chain Management

Supply Chain Management (SCM) software can offer tremendous value to any company that relies on the smooth planning and execution of related operations to achieve long-term profitability and maintain a solid competitive edge. That’s why more and more organizations are purchasing and implementing supply chain applications. Here are some of the key benefits that SCM software delivers:

Improved Supply Chain Network
Supply chain management software provides complete, 360-degree visibility across the entire supply chain network. It allows users to monitor the status of all activities across all suppliers, production plants, storage facilities, and distribution centers. This enables more effective tracking and management of all related processes, from the ordering and acquisition of raw materials, to manufacturing and shipping of finished goods to customers or retail outlets. The status of mission-critical activities can be tracked at all times, and potential inefficiencies or problems can be identified and corrected immediately, before they become unmanageable.

Minimized Delays
Many supply chains – particularly those that haven’t been enhanced with a supply chain application – are plagued by delays that can result in poor relationships and lost business. Late shipments from vendors, hold-ups on production lines, and logistical errors in distribution channels are all common issues that can negatively impact a company’s ability to satisfy customer demand for its products. With SCM software, all activities can be seamlessly coordinated and executed from start to finish, ensuring much higher levels of on-time delivery across the board.

Enhanced Collaboration
Imagine having the ability to know exactly what your suppliers and distributors are doing at all times – and vice versa.

SCM software makes that possible by bridging the gap between disparate business software systems at remote locations to dramatically improve collaboration among supply chain partners. With SCM software, all participants can dynamically share vital information – such as demand trend reports, forecasts, inventory levels, order statuses, and transportation plans – in real-time. This type of instantaneous, unhindered communication and data-sharing will help keep all key stakeholders informed, so that supply chain processes can run as smoothly as possible.

Reduced Costs
Supply Chain Management software can help reduce overhead expenses in a variety of ways. It can, for example:

  • Improve inventory management, facilitating the successful implementation of just-in-time stock models and eliminating the strain on real estate and financial resources incurred by the storage of excess components and finished goods
  • Enable more effective demand planning, so production output levels can be set to most effectively address customer requirements – without the shortages that result in lost sales or wastes that drain budgets
  • Improve relationships with vendors and distributors, so that purchasing and logistics professionals can identify cost-cutting opportunities such as volume discounts
  • Abe Vance

    Is supply chain software mainly used in large enterprises? I understand the value, and I have researched it for my own company, but when I think of scm I think of big names like SAP, who are known to be expensive. Is scm a good solution for a midsize or even a small business?

    • darlenelin

      Hi Abe,
      Thanks for the comment. There are definitely plenty of SCM solutions available that are geared towards the needs for small and midsize businesses. And with more and more software vendors offering cloud-based solutions, small businesses don’t have to worry about the expenses and headaches that come with an on-premise installation. 

      For a small business, I would take a look at on-demand, cloud solutions if you’re worried about the cost of software, installation, and maintenance. To name one, RedPrairie is an on-demand solution that is well-regarded within the industry. But, as with any software purchase, the needs of your business should come first when choosing a solution.

      • Abe Vance

        thanks, darlene. this is helpful.

  • Nathan Rowan

    Just like with any other software, scm only really solves half the problems listed in this article. scm can get very expensive and time consuming so really what you need is to make sure it’s implemented well and that people use it correctly. you can have the most advance software in the world but if people aren’t trained on it then what’s the point? I think what’s needed is, companies should identify their scm problems and map out how scm software fixes those problems and then train people accordingly.

  • Cost control, customer service and planning are some of the top
    challenges of supply chain management. All require the continuous
    assessment of market conditions and operational performance you can easily handle all these if you have efficient supply chain management !

    Inventory Management system

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