Supply Chain Management Software
Published January 08th, 2017 by

What Is a Supply Chain Management Software and What Does It Do

What Is a Supply Chain Management Software and What Does It Do

In managing any type, size or aspect in a business process, it is always helpful to have a secure and reliable system. This will help you organize and streamline your tasks to achieve your business goals and to improve your work efficiency.

Supply Chain Management Overview

Supply chain management is composed of three main flows: the product flow, information flow, and the finances flow. Every phase of this management process is essential to achieve the most effective goal for your business. From the movement of goods and products from the suppliers to customers, transmitting orders and status updates on all deliveries to organizing payment schedules, consignment and title ownership arrangements, and all business credits.

There are a lot of ways to manage and streamline your supply chain. For years, having a paper-based system in managing any type of business has been already working. However, as time and technology grows, the ways and resources in supply chain management have also grown. Supply chain management software and applications are now available in the market for you to choose from.

What Is Supply Chain Management Software?

A supply chain management software is a tool that was designed to help an industry control all business processes, manage your supplier relationship and execute value chain transactions. There are two main types of a supply chain management software, namely the planning applications that use advanced algorithms to create the best way to organize orders and the execution applications that focus on tracking physical status of products and goods, resources management and all financial aspects.

Supply chain management systems are a very valuable tool to help you effectively run your business by maximizing your production efficiency and business planning.

Supply Chain Management Software Features

Although supply chain management solutions have various types and are built by different software providers, they are designed for the most basic need in organizing the business processes regarding supply chain management. Functionalities might differ from one software to another, but there are common features that you should look for in an ideal supply chain management software.

  1. Supply Chain and Demand Planning. The planning functions in a supply chain management are essential to execute the production processes accordingly. This improves the accuracy of all demand estimates and forecasts by providing data in real time without any biases. It happens by using the historical trend data and the planned promotional schedules. This function in business planning and forecasting is multi-dimensional which allows you to view data and information through various filters.
  2. Inventory Management. A supply chain management software for businesses has a vendor managed inventory or the VMI. This system allows you to allow your suppliers to access a part of the system where they can monitor and stock up the inventory. This also features a variety of communication options to increase visibility and improve the communication processes such as web portals, XML, and emails.

This inventory management feature also helps you automate all your inventory reports, where you can also communicate with your suppliers about shipment notifications as well as invoices.

  1. Supplier Sourcing and Management. This function is very helpful for a business in order to assess and to monitor the performances of the suppliers. It has user-defined risk categories and key performance indicators or KPI to perform analysis that determine supplier’s risks and monitor the cost and supplier performance. This will also allow you to track your supplier in regards to regulatory compliance.
  2. Warehouse Management. The warehouse management software function of a supply chain management system allows you to track and to control the movement of your materials, equipment, and resources within your warehouse. It functions from having an advanced shipment notification for every shipping and receiving of shipments to picking and storing resources using tools such as radio frequency identification or RFID and auto ID data capture or AIDC.

This warehouse management function will also help you on the matter that involves the design of the warehouse building.

  1. Transport Management. This function in a supply chain management is responsible for creating guides for the movement of materials, equipment, and resources going in and out of the warehouse. The transport management function of the system can also help you manage various delivery variations and suggest the most effective delivery mode. It can be by land, by sea or by air.

The transport management function also allows you to track and to monitor deliveries through various communication devices such as satcomm.

  1. The procurement feature in a supply chain management system maintains the financial side of the relationship between you and your suppliers. It is also useful in carrying out your purchase orders. The procurement also serves as an accounting segment of the system that has the ability to handle all business reporting and compliance issues, distribution of purchasing terms electronically and automating expenses for future references.
  2. A strategic sourcing feature is essential in improving the current business process to achieve a more efficient goal. This feature is utilized to form cost-cutting and reduction goals and screen your potential vendors. Strategic sourcing will also allow you to identify some unnecessary and expensive supplier relationships by comparing their cost to some other market options. This will also enable you to send quotes, proposals, and other necessary information to potential vendors in order to make informed purchases.

These basic features in a supply chain management system are must haves in choosing the best supply chain management software for you. All of these should be present when looking for the right software solution to effectively use it at its best. It could help you achieve your business goals efficiently, with minimal operating costs and expenses but with higher revenue.

Moreover, you can also read supply chain management software reviews to help you find the best software for your needs.

How Supply Chain Management Software Helps Your Business

There are a lot of benefits of using supply chain management software for your business. One of the advantages you can get is having a reduced costs effects or minimized overhead expenses. This is made possible by improving the system for inventory management, managing the warehouse and storage space to eliminate damaged resources and strengthening your relationship and communication with vendors and distributors.

With a software solution to improve your business processes, you can easily raise your business profit level. You can also boost work efficiency and cooperation levels between you and your employees by having a detailed and standard business process routines and improved communication and collaboration with your suppliers. This will also work to your advantage in lowering and avoiding time delays in processes and issues like late shipment deliveries, hold-ups in production, and errors in any distribution channels.

Having the top supply chain management software in your business can also improve your customer service. Having a system to help you effectively track your shipments and products, and streamline your operations and order management, you can quickly and reliably give your customers the product they want. Having a real-time information and access to the progress and process of your business, you can easily and quickly address to issues and problems to maintain customer satisfaction.

Supply Chain Management Software Market Trends

Aside from the basic and common features to look for in a supply chain management software, there are also some additional functions you might want to consider. This will also help you further in efficiently using your software system to achieve your business goals.

  1. SaaS system. Software as a Service or SaaS systems is becoming popular in the market. This cloud-based system will allow you to have access to your system through a web browser. With this kind of system, you can minimize your principal expenses since this doesn’t need to be installed on every computer in your office, thus reducing maintenance costs. This will also allow you to have access through various devices such as your laptops and tablets.
  2. Online Purchases. Enabling online purchases on your business system will help you gain a wider audience and customers to promote your products to. This will also improve your retail sales since having an online store will allow your business to be open 24 hours every day and 7 days every week.
  3. Business Intelligence. Managing a business is never easy. There is a lot of tasks to accomplish to achieve a more effective business process. Having improved business intelligence with your supply chain management software, you can easily track how your business spends money and improve your business planning, demand planning, and sourcing capabilities in order to meet the demand.
  4. Labor Management. Labor optimization is essential in running any type of software system in your business. This will help you efficiently manage your team and employees according to their skills and capacity. The system will also allow you to create and form tasks and processes for your employees to follow. This will increase work efficiency by reducing time and effort in unnecessary trips from and to a new task.

Having a supply chain management software in your business can be sure to help you achieving all your goals towards the success of your business. It is essential in minimizing the business’ overhead costs, eliminating unnecessary expenses and improving revenue by effective tracking and organization of the business processes from the start.

To know more about supply chain management software, you can visit and read our best supply chain management software reviews for more software choices.

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