Supply Chain Management Software
Definition: Supply Chain Management is the discipline related to the management of the planning,
manufacturing and operations necessary to bring a product to the market place, from
the sourcing of materials through to the delivery of the completed product.
The deciding factor in the success or failure of any given product is in the efficiency
with which it can be brought to the market place. If the revenue derived from the sale of a
product does not create a required profit margin over the cost of its production then that product
is doomed to failure, and the health of the enterprise that manufactures the product will suffer.
supply chain management softwareWith that in mind it is clear that the most important factor in the
life cycle of a product is the budget and time frame within which it is manufactured. The discipline
of supply chain management and the ranges of software used to control it have been developed in order
to make this cycle more efficient and cost effective. The field is led by the Council of Supply Chain
Management Professionals (CSCMP)
Aspects of Supply Chain Management
Supply chain management is a complex field encompassing every process involved in manufacturing a
product. Supply chain management software assists enterprises in controlling streamlining the process
through several logistical areas.
Customer Service Management:
Customer relations provide information to the manufacturer on the level of demand for the product, and
feedback to the customer on promised delivery schedules.
Supply chain management software provides reporting modules to track both current demand and answer a
range of ‘what if’ questions to assist in the prediction of future demand depending on changes in strategy.
Strategies are developed with suppliers to ensure that materials can be provided on time to meet both
current demand and predicted demand for the future, avoiding the bottlenecking of resources that comes
with inadequate procurement planning.
Supply chain management software can assist in resource planning for the manufacture of products,
recommending order schedules to reduce manufacturing cycle times.
Product Development and Commercialisation: Product development managers must work to identify customer needs and preferences in developing new
products, and then work closely with suppliers and the manufacturers to reduce cycle times and ensure
that customer needs are met. While supply chain management software cannot advise on the development of
new products it can be used to ensure best practices for their manufacture and distribution.
Manufacturing Flow Management:
The primary aim of manufacturing flow management is ensure that the manufacture of goods is optimised to
operate on a just-in-time (JIT) basis, manufacturing orders to precisely meet customer demand so as to
maximise efficiency and reduce excess stock.
Supply chain management software can assist in this process by analysing past performance and future
predictions to suggest the optimal manufacturing schedule, while ensuring that materials to meet that
schedule are procured and available in time to synchronise with the manufacturing schedule.
Once the product has been manufactured it is vital that there be an adequate structure in place to
distribute it to the customer. Supply chain management software should assist in the process of planning
and implementing an efficient distribution schedule by optimising manufacturing schedules to allow for the
best possible distribution of the product.
Outsourcing & Partnerships:
It is a fact that it is often more cost effective in the development, manufacturing and distribution of a
product to form partnerships with other enterprises. Especially in the case of overseas outsourcing, it is
often the case that another enterprise can perform a function or process at a lower cost or a higher level
of efficiency than the enterprise manufacturing the product.
In these cases it would be wise from a business standpoint to form a partnership rather than perform the
process in-house, enabling the enterprise to focus its attention and resources on those activities in which
it has an advantage.
One of the most common usages of partnerships is in the provision of transport and distribution services.
Rather than devote effort and resources to building an in-house supply chain it can often be much more cost-effective
to form a partnership with a shipping company, and allow them to perform the job of distribution at a lower cost
than the enterprise could manage itself.
Supply chain management software can offer financial reporting functions, allowing project managers to analyse
areas of the supply chain in which the enterprise could gain be outsourcing to an outside firm.
Performance measurement performs a vital function in any supply chain. By continuously analysing the
performance of the enterprise over a range of functions it enables managers to identify areas of weakness
and opportunities for improvement. Through customer perception measurement and best practice benchmarking
it is possible to create a positive feedback loop, continually improving supply chain processes to deliver
improved services and increased profits.
Further information regarding supply chain management can be found at CIO’s supply chain management research
centre, NIST and the National Science Foundation.