Tools and Software for Supply Chain Management
Supply chain management software is used to assist all stages of the supply chain. From supplier relationships to product delivery, supply chain management software is used to ensure the utmost precision and efficiency. Tools and software are used in all businesses, from small businesses to huge organizations.
Supply chain management is essentially the overseeing of a company’s production and delivery – from raw material to finished product. This chain needs to be managed so that orders are completed on time, problems are overcome, and great customer service is delivered.
Supply chain management refers to lots of things: inventory management, product delivery, logistics coordination, and so on. With this comes lots of different supply chain management software and tools. From supply chain planning to collaboration tools, this article will examine all the software types you should know about when working in SCM.
Types of Supply Chain Management Tools
Tools for supply chain management can be split into four broad categories: supply chain planning, execution, visibility, and collaborative tools and technologies.
Supply Chain Planning Tools
Supply chain planning (SCP) is all about looking into the future of a business supply chain. It’s about balancing out supply to meet the predicted future demand.
Supply chain planning tools not only help you plan ahead but also help you predict and avoid future disturbances in the supply chain. They will be able to provide you with ‘what if’ scenarios, and help you map out solutions to a range of possibilities.
Typical features of a supply chain planning tool/software include:
- Demand planning
- Inventory management
- Collaborative planning
- Distribution planning
- Production and factory scheduling
- Strategic network design
- Multiplant capacity planning
Typically, planning tools demonstrate supply and demand forecasting through graphs and charts. Some software can even be used to instigate change in the supply chain. For example, if the forecasts show potential production overstretch, you could then use the software to set a production limit.
Benefits of using Supply Chain Planning Tools
The benefits of using the best supply chain management planning tools include:
- SCP tools streamline supply, demand, inventory management, sales, and other statistics to provide you with a singular platform to ensure better planning.
- SCP tools help you predict instances of low product demand. In doing so, they also help you with production planning.
- Capacity planning ensures that you don’t make surplus products. This way, you ensure your company stays as cost-effective as possible.
Examples of Supply Chain Planning Tools
- Blue Yonder – Blue Yonder allows you to plan and organize inventory. It also pulls together supply and demand statistics and helps you forecast future demand. Using AI technology, Blue Yonder helps you better prepare for issues and establish alternative plans.
- IBP – SAP is software that helps with business processes and customer relations. SAP Integrated Business Planning for Supply Chain (SAP IBP) is SAP integration. This platform brings together supply, demand, inventory, operations planning, and sales. It then presents all these aspects through graphs and charts.
- Anaplan – Anaplan gives you an organized platform to carry out inventory management, supply network optimization, and capacity planning. It also works as a place to create and collaborate on source plans with your stakeholders.
Supply Chain Execution Tools
You can split supply chain execution (SCE) into three distinct areas: warehouse management, transportation management, and global trade management.
Warehouse management tools are used to perform inventory control, manage labor, manage returns, and manage the warehouse as a whole.
Transportation management tools are designed to help optimize the physical transportation of a company’s product. I.e., from the warehouse to the factory to the customer. This includes the tracking of drivers, ensuring the documentation is in order, and that the goods are compliant with state laws, etc.
Global trade management tools also look at transportation compliance. Essentially, they work similarly to transportation management tools, except on a much bigger scale. It integrates collaboration with importers, exporters, and other global partners to ensure a product is delivered on time and to the correct location.
Benefits of using Supply Chain Execution Tools
The benefits of using execution tools include:
- Supply chain execution tools ensure that a product is delivered safely and securely to a customer.
- Supply chain execution tools also ensure that products reach customers as quickly and as efficiently as possible.
- Execution tools help you organize transportation means. These platforms also allow you to effectively track the delivery status of your products, and even keep on top of your transport bills and payments.
Examples of Supply Chain Execution Tools
- Oracle Transportation Management – This software allows you to organize your company’s entire transportation activities on one platform. It helps you determine the best ways to deliver a product, manage bids and secure drivers, bill and pay transport providers, and much more. Shipment status is also provided.
- Manhattan Associates – This supply chain software is a cohesive supply chain execution tool. It allows you to manage warehouse labor and also plan and execute product transportation. With Manhattan, you can even track employee performance levels, organize incentive pay, and provide feedback when needed.
- Infor LN Distribution – Infor LN distributions give you a platform to manage and track customer orders effectively. It also allows you to track inventory stock levels to ensure that you’ve got enough to meet customer demand. Lastly, it’s a great tool for determining the best delivery routes with its route planning features.
Supply Chain Visibility Tools
There are some similarities between supply chain visibility and supply chain execution and planning tools. They’re all utilized to view the successful movements of materials and products along the supply chain. Visibility tools, however, focus primarily on tracking the product and making its movements and whereabouts known precisely.
With greater visibility, those working the supply chain can foresee potential issues and understand why there may be a hold-up. This ensures that inventory in motion can be managed more easily. Changes can be made to resolve snags as they happen, which helps to avoid long-term delays and financial losses.
On the other end, these tools help to provide greater visibility for the clients and customers. Being able to pinpoint precisely where inventory is in the supply chain promotes greater transparency and trust, and allows you to provide better customer service. Customers want to be able to track their purchases easily, and this service can be provided with visibility tools.
Benefits of using Supply Chain Visibility Tools
The benefits of using visibility tools include:
- Modern tech – Visibility tools integrate modern technology such as the Internet of Things (IoT) and Application Programmable Interfaces (API) to provide accurate tracking.
- Avoid fees – Potential fees are avoided through real-time tracking. One of the most common fees of international tracking is demurrage and detention charges. This is when your shipping container has been kept at the terminal for longer than the agreed time period. With visibility tools, you can identify how long containers have sat in one place.
- Faster response times – With a big-picture view of the shipping process, you can rectify issues as and when they emerge.
Examples of Supply Chain Visibility Tools
- E2open – E2open allows you to control the movement of goods internationally on a single platform. It integrates warehouse supply levels and available transportation modes to ensure that deliveries are made and shipped in optimum time. It then provides you with real-time tracking as your product is moved across the globe.
- project44 – project44 is an advanced visibility tool, which provides you with accurate readings on how long it would take to get a parcel moved between two set points. It provides you with port and road updates in real-time, allowing you to re-route packages as necessary. It also shows you which shipments are at risk of D&D fees.
- FourKites – FourKites is another cloud-based solution for international transportation. By allowing for multiple team members, all parts of your supply chain are notified about the whereabouts of collection trucks. This ensures that orders are made and ready for pick-up times and minimizes the risk of delays.
Supply Chain Collaboration Tools
As supply chain management networks grow to an unprecedented scale, the need for strong collaboration tools is more important than it has ever been. This need is heightened when you consider the standard of customer service and the fast-paced delivery expectations that customers expect today.
Supply chain collaboration (SCC) tools connect all sectors of the supply chain to promote collaboration. Instead of only viewing things from one end of the funnel, every part of the supply chain (warehouse, manufacturers, delivery drivers) is kept in the know about every stage of product development and delivery.
With end-to-end visibility comes greater transparency and, therefore, stronger and more effective decision-making. With better communication, one company involved in the supply chain can quickly notify another company in the supply chain about a disruption. In doing so, solutions can be organized and implemented at a faster rate.
The best supply chain management software will give you a system that all parts of the supply chain can log into and use to collaborate.
Benefits of using Supply Chain Collaboration Tools
The benefits of using supply chain collaboration tools include:
- Data sharing – SCC tools allow for real-time data sharing. This means that as soon as a change in the supply chain occurs, everyone on the platform will be notified of it. Not only does this keep everyone in the know, but it also ensures accurate decision-making takes place. It stops decisions based on out-of-date info being made.
- AI features – AI is used in the majority of SCC tools to ensure that the most important data gets read first. If there’s a serious threat to the flow of a company, AI will move this information to the top of everyone’s feed. If AI determines information to be of low consequence, it will not promote it in the same way.
- Configurable – Good quality SCC software tools are configurable, meaning they can be altered to meet the shape of your supply chain exactly. Not only is adaptability important when adopting SCC software, but it also means the software can be altered as your company grows and your supply chain commitments change.
Examples of Supply Chain Collaboration Tools
- One Network Enterprises – This is a real-time multi-party network where you can share graphs, analytical data, and logistical updates on a shared platform. All who are connected will receive your updates and use them to alter their own operations as and when is necessary. You can also send quick messages to specific colleagues.
- Elemica – Elemica pulls data from all corners of the supply chain and provides users with collaboration features to figure out solutions to problems. With supplier connections, customer connections, and carrier connections, you can improve relations between all areas of the supply chain.
- SAP SCM – You can use the SAP SCM software tool to share inventory information, order updates, and demand forecasts from all areas of your supply chain – including your collaborators. You can make your data set open access, which allows other platform users to edit documents, boosting collaboration.
Factors to Consider When Choosing Supply Chain Management Tools
Even the supposed ‘best supply chain management’ tools don’t work for all businesses. Before investing in supply chain software, consider the following factors:
Business Needs and Requirements
What software functions are most important to your business? While most supply chain management software types are configurable, not every software type is directly relevant to your business. For example, if you only trade nationally, there’s no need for an international supply chain software tool.
Supply chain management software can be expensive. So, make sure what you’re buying is economical for your business model.
Scalability and Flexibility
Regardless of the size of your company now, you need to invest in software that is scalable for when your company grows. Your list of suppliers, delivery drivers, and customers will definitely grow over time. Therefore, you need software that provides maximum scalability.
As your company develops, your priorities and mode of operations will change, too. Therefore, you need software that is as flexible as it is configurable. A rigid software won’t do. Every business is different and goes through changes over time. You need software that can develop with you.
Ease of Use and Integration
The supply chain management software you use is going to be integrated at all stages of your supply chain. Therefore, you need a tool that has a clean interface and is easy to use. This could make or break the digital transformation of your company. If the software is too confusing for some, they’ll be reluctant to use it. This impacts the collaboration within your company.
You also need to check if the software can integrate with the systems currently in use on the supply chain. Additionally, make sure the software can be used across several devices – desktops, mobiles, tablets, etc.
Cost and Return on Investment
Although supply chain management software is mostly about avoiding pitfalls and financial losses, you need to ensure that you’ll get a good return on investment with the product. If you can prove that the product will lower your shipping expenses, reduce the amount of wastage, and so on, you’ll get a good return from the product.
Vendor Support and Customer Service
Supply management software needs to provide you with excellent customer support. Without it, you may struggle to integrate it into your company. Integration needs to be as smooth as possible. However, you’re likely to hit a few snags – especially at the beginning. Therefore, you need 24/7 chat and helplines to help you overcome problems.
Without vendor support, the supply planning software will more likely slow down than speed up your operations.
How to Implement Supply Chain Management Tools
So, you’ve found the perfect software for inventory management, supply chain analytics, or labor management. But how do you purchase it and effectively implement it into your company’s supply chain operations? Here’s how:
Conduct a Thorough Analysis of Current Processes
Firstly, you need to identify and highlight what’s wrong with your company’s current supply chain management software. You can do this by conducting a supply chain-wide audit. Look out for things that habitually go wrong that won’t occur once the new software is implemented.
This way, you’ll be able to convince stakeholders how the new supply chain management software could resolve these issues.
Identify Key Stakeholders and Obtain Buy-in
Next, you must convince key stakeholders and senior management members that your company needs the software for supply chain management purposes. These stakeholders need to be made aware of how the system will work, how you plan on implementing it, and the profits it will secure. You’ll also have to convey what’s wrong with the current model.
The aim here is to gain influential financial backing so that you can buy and adopt the new software.
Develop a Clear Implementation Plan
A roadmap for the successful implementation of the supply chain software must also be established. Firstly, you need to set initial training days, as well as decide upon which day the supply chain will make the switch.
Additionally, you need to set targets that will help you review whether or not the new supply management software is working. For example, you should set revenue targets. For supply chain planning tools, you should test the accuracy of their forecasting.
Provide Comprehensive Training
Although adopting user-friendly software is important, it’s also vital that you provide the entire supply chain with adequate training. For best results, have a select few employees trained directly by the software creators themselves. These super users could then help and teach the rest of the supply chain team how to use the system properly.
Continuously Monitor and Evaluate Performance
It’s important to test the supplier management software before and after you implement it. This way, you’ll be able to determine if it’s actually doing what you want it to do. With an implementation plan and goals in place, you’ll be able to easily determine whether or not the system is working.
It may also be worth setting up a forum for employees to share issues they’re having with the software. Feedback is essential for the monitoring and evaluation process. Make sure the software is actually making a difference to the supply chain processes.
Benefits of Using Supply Chain Management Tools
The successful implementation of new supply chain management software will transform your operational planning and implementation for the better. Here’s how:
Increased Efficiency and Productivity
As soon as one delay occurs, the entire supply chain is set back significantly. Supply chain management helps mitigate delays in several ways. It can be used to predict delays, communicate delays, and plan and implement delay solutions. So, with effective software in place, supply chains are made more efficient, and productivity is increased.
Improved Collaboration and Communication
For supply chains to work, communication and collaboration between each department and company are required. Supply chain software keeps all departments connected. Updates can be sent out, and messages can be sent between departments.
Plus, when supply planning, you can make documents accessible and editable for colleagues. This way, supply planning becomes a collaborative effort. Through collaboration tools, you can also boost supplier relationships.
Enhanced Visibility and Control
Enhanced visibility works both for the supply chain and for the customer. It allows for each member of the supply chain to review the development or transportation of a product, and make changes to their scheduling as required. It also allows you to foresee any potential issues with the chosen transport route.
For customers, you can provide accurate and real-time delivery estimates for products. This will establish greater customer relations and could secure returning customers.
Better Data Management and Analysis
Supply chain management software allows you to better analyze supply and demand data and conduct ‘what if’ scenarios. These software types can collate data from various supply chain sources to produce accurate and advanced results. With this, you can more confidently make decisions that will alter the course of the supply chain for the better.
Reduced Costs and Risks
With greater visibility and foresight, managing a supply chain becomes less risk-prone. With less risk comes fewer production losses, making your supply chain as financially efficient as possible.
Challenges and Risks of Using Supply Chain Management Tools
Investing in supply chain management software does not guarantee all of the benefits listed above. There is a large amount of risk involved in implementing new inventory management systems. Challenges and risks include:
Implementing new supply chain management software is challenging. You don’t want to halt production completely, as this could have serious implications for your company’s reputation. You, therefore, need to pick the most opportune time to implement the software or implement it incrementally.
If you didn’t check in advance, you may realize that your new software does not integrate with your supply chain’s current technology and software. Integration issues could cause major disruption to your supply chain. It would mean either choosing a different software or updating all of your systems to suit the new one.
Data Security and Privacy Concerns
Integrating all departments and all partner companies into one platform will definitely pose some degree of data security and privacy concerns. It involves your company sharing more data with more people than you’ve likely shared up to this point.
This means you have to put procedures and processes in place to prevent sensitive information from leaving the supply chain.
Training and User Adoption Issues
For supply chain management software to be implemented successfully, it has to be adopted by all. So, you have to effectively train and encourage all members of the supply chain team to adopt the new system. If staff are struggling to use it, more training is needed – or, you need to choose another software.
Maintenance and Upkeep Costs
Supply chain management software is unlikely to be a one-time purchase. You’ll likely have to make regular payments to keep it operating. Plus, you’ll have to oversee updates and inform your staff about changes to the app. It may be best to hire a specialist to keep an eye on the maintenance of the software.
Case Studies of Successful Supply Chain Management Tool Implementations
Companies who have successfully been using supply chain software to better their operational efficiency include the following:
Walmart’s Use of Blue Yonder for Predictive Analytics
Walmart uses Blue Yonder’s predictive analytics to manage its workforce, optimize inventory, and allocate resources. The AI element of the software gives Walmart the confidence to make major organizational decisions. Although it doesn’t necessarily help them profit, it allows them to avoid losing money.
Procter & Gamble’s Implementation of E2open for Supplier Collaboration
In 2018, the manufacturing company Procter & Gamble introduced an E2open onboarding portal. It sends this portal round to all its new suppliers and gets them to sign up and join them on the cloud-based platform. This has allowed Procter & Gamble to more effectively perform material planning.
Chevron Corporation’s Adoption of SAP IBP for Integrated Planning and Execution
Chevron Corporation is a massive multinational energy corporation. To better manage its 43,846 employees and plan far into the future, Chevron Corporation uses SAP IBP. This allows it to analyze supply and demand and more accurately forecast upturns and downturns, and make corrections where necessary.
Future Trends in Supply Chain Management Tools
As with all industries, supply chain management is going through some major changes as technology advances. The emergence of web3 and AI has completely changed the possibilities of supply chain management software.
While some leading software providers have already implemented these changes into their platforms, others are still to catch up. Here are some of the emerging trends you need to be aware of:
Artificial Intelligence and Machine Learning
Artificial intelligence and machine learning will take over a large part of supply chain networks in the coming years. To start with, machine learning can be used to carry out routine warehouse tasks, such as stock-taking. This can be integrated with supply chain management software to provide more accurate data on stock levels, for example.
Additionally, AI will be used increasingly to carry out analytical duties in the supply chain, such as demand forecasting. This kind of data will be invaluable for supply chain planning tools.
Lastly, AI will also be used to forecast delays in the supply chain and report them back to supply planners and supply collaboration platforms. Overall, AI and machine learning will be implemented to increase the efficiency of supply chain software.
Internet of Things (IoT)
The Internet of Things (IoT) will be used in transportation management tools more frequently in the future. The Internet of Things uses smart devices to track inventory. It can use smart doors on warehouses to track when a piece of raw material leaves the warehouse. It can also be used to track the whereabouts of a finished product in transit.
This way, the Internet of Things helps provide more accurate product tracking for customers, creating greater customer service. It also helps companies get better organized, and identify areas of the supply chain that are slowing them down.
Similar to the Internet of Things, blockchain technology is being used by transportation management tools to more accurately track the progress of a product. The blockchain is updated whenever a product passes through a specific stage. The blockchain can also show product history, revealing all the stages that the product has already passed through.
The supply chain analyst’s job is being made a lot easier thanks to predictive analytics. Computers can analyze historical supply and demand data to forecast upturns and downturns far into the future. They can effectively predict how a product will perform in the near and far future, allowing companies to better organize their inventory to suit this.
As already proven in this article, cloud-based computing has transformed how supply chains are managed. This trend will definitely continue, as all supply chain operations tools switch to cloud-based control.
It’s vital to adopt new supply chain management software to keep on top of emerging trends and changes in the supply chain industry. Without adopting software with AI, predictive analysis, and blockchain technology, you risk falling behind other supply chain companies.
In this article, we’ve explored the various types of tools and software that can help supply chains become more efficient. This includes supply chain planning, collaboration, execution, and visibility tools. The type of tools you need depends on your specific business, and also what areas of your supply chain are slowing down progress.
What are the different types of supply chain management tools?
The main types of supply chain management software include supply chain planning, execution, visibility, and collaborative tools. What brings these tool types together is the fact they can all be used to reduce costs and increase the efficiency of a supply chain.
What are the benefits of using supply chain management tools?
The benefits of using supply chain management software include enhanced collaboration between departments. Greater communication means that supply chain updates can be sent out and used to overcome problems. Supply software also helps reduce the number of mistakes made, and, therefore, the amount of money, supplies, and products wasted.
What are the challenges and risks of using supply chain management tools?
The main risk of using supply chain management software is failing to implement it effectively. If your staff are not properly trained, they will not use it. This causes issues with collaboration and communication. Other risks include data security issues, privacy concerns, and maintenance costs.