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Supply Chain Management Scope and How to Leverage SCM Software

SCM (supply chain management) software integration is on the rise, and companies of all shapes and sizes are leveraging these powerful solutions to increase efficiency. Luckily, you’ve come to the right place to learn how SCM software can take your supply chain to the next level. We’ve gathered some helpful supply chain management features and requirements below that will help inform your supply chain management scope of work before choosing a perfect solution.

What Is SCM?

Before taking a look at the many features and benefits of SCM software, it helps to have some working knowledge of its purpose. First and most obviously, supply chain management is all about streamlining supply chains for efficiency and customer satisfaction. SCM optimizes all segments of a supply chain from procurement to distribution.

A recent study has shown that companies with fully integrated SCM are outpacing non-integrated companies by 20 percent. Not having an SCM strategy in place today is likely to make your company an outlier on the business landscape. Supply chain management software keeps small businesses competitive and helps larger companies stay organized.

The scope of SCM integration is something to consider before taking any permanent steps. Rushed decisions lead to more errors and further loss of efficiency.

Get our Supply Chain Management Software Requirements Template

SCM and Scope

No single SCM solution is viable for all situations; in fact, quite the opposite is true. A small business that integrates a needlessly complex SCM package will only see further declines in resource expenditure. The same is true for larger companies that implement an SCM solution that does not cover all of their many requirements.

As you can see, it is essential to ask yourself a few questions to identify specific needs your supply chain has. What do you need to improve, how far-reaching does your SCM need to be and which portions of your supply chain will be interacting with this new implementation? Proper planning is a crucial first step in the SCM collection process. Be sure to make a list of points you know need improvement!

More Probing Scope Questions

Which portions of your supply chain need help? Are your current SCM needs upstream, midstream, downstream or all of the above? Specialized needs require specialized tools. More general needs would benefit from a package that tackles all areas equally.

What does your budget allow? Without concrete knowledge of how much these solutions cost, it can be challenging to plan. Take a look at our pricing guide to get a better idea of pricing for many of the leading SCM tools.

Is your supply chain focused on responsiveness or efficiency? Most supply chains tend to focus on one or the other. A package that better serves responsiveness would be better for more customer service oriented operations. On the other hand, a more efficiency-based system would focus on streamlining and cost reduction.

Are you pressed for time? If you lack time as a resource, jumping into a complex integration would only lead to more headaches. Implementing a new system requires time-intensive activities like training. Before making a choice, think about how much time you have to spare for integration.

Take Your Questions to Vendors

Before making any decisions, running these questions (and any more you may have) by vendors will also help you make the best choice. Vendors have expert knowledge of their products and can clear up any lingering confusion about what their services provide.

Now that your scope is beginning to take form, vendors can help guide you further down the path to finding a solution. Discuss any time or budgetary limitations with them and see if their product fits in to your scope. Does their product focus on a narrow or more general integration? Don’t be afraid to shop around. Making an uninformed or rushed choice will only cause headaches down the line. Starting from zero after purchasing an expensive software suite not only wastes resources but is demoralizing.

Next Steps

You’ve finally got your scope figured out and are ready to start thinking about your final choices. Now it’s time to focus on the features and benefits of what supply chain management software can bring to the table.

Below are some of the most important features people often look for in an SCM software solution. Keep an eye out for anything you know that you need to accomplish and make a list of features you require!

Scope Affecting SCM Software Features

Finding out which features of an SCM solution pair best with your supply chain management scope can be a daunting task. To save you some time, take a look at the features below to discover which are must-haves.

Supply Chain Monitoring and Analytics

Monitoring the various moving parts of a supply chain is critical. Using real-time analytics SCM software can keep you in touch with the many variables of a supply chain at a moment’s notice. With the ability to rapidly monitor sections of your supply chain you can prevent problems before they happen.

The rich well of data that is accessible through supply chain monitoring is invaluable. Monitoring existing and possible trends, and measuring your metrics against competitors makes supply chain monitoring a key piece of SCM. Planning for shipment departures and arrivals with accurate transportation scheduling will keep clients and customers happy.

Monitoring the many pieces of a supply chain end-to-end is a must for any successful company. Accessible monitoring tools allow users to maintain up to date metrics on internal processes and customer satisfaction. The ability to track these data points strengthens all portions of your chain.

With monitoring and analytics working together, you can discover and make adjustments to any KPIs (key performance indicators) that may be underperforming. Identifying root causes of underlying problems, mitigating risks, and optimizing processes across the entire supply chain are all valuable opportunities provided by SCM.

Supply Chain Planning

Forecasting possible increases or decreases in demand allows proper decision making about warehousing, transportation, and manufacture. Planning functionality enables you to take this data and make informed material requests per demand.

SCM planning tools help sections of a supply chain stay on track.

Planning keeps a supply chain competitive, and the data gathered continuously improves performance in the future. Viewing this organized data makes it possible to look ahead to make decisions before they become urgent needs. From a customer service standpoint, this is very valuable. Automatic allocation of high priority inventory will ensure rapid transit and on-time delivery of high demand goods.

Compare Top Supply Chain Management Software Leaders

Warehouse Management

Warehouse management is another crucial SCM feature that differs per business. Warehouse management comes in a variety of forms and is integrable in many different software packages such as ERP (enterprise resource planning). The various problems that warehouse management can tackle depend on your specific needs.

SCM software provides real-time warehousing updates from across the globe.

On a basic level, warehouse management functionality provides support when managing stock and distribution in the warehouse. Scheduling transfers of goods externally or internally and compiling all inventory data in one easy to reach location prevents errors and lost paperwork.

The agility of warehouse management software allows it to work in close concert with other aspects of your supply chain such as inventory and quality management.

Transportation Logistics and Management

This portion of SCM management connects to the many functions of physically moving goods from location to location. Creating efficient transportation plans leads to healthy cost reduction in the transportation process. Efficiently planning routes ahead of time ensures successful transport and final delivery, without unnecessary problems.

If a small batch of goods needs shipping immediately, there are solutions for combining high demand goods into larger shipments without the worry of losing track of them. Integration of cloud-based 3PL (third-party logistics) companies further pushes how much you can get out of your warehouses and transportation structures. Multi-tenant warehousing operations and large transportation fleets are much easier to manage with the help of a 3PL setup.

Providing shipment visibility with ease of access lets clients and customers rest easy. Happy customers are retained customers!

Sourcing and Procurement

Ease of information exchange between sections of the supply chain is mandatory when avoiding errors and miscalculations. Online collaboration between multiple parties streamlines the procurement process and provides web ordering abilities. Say goodbye to unwanted meetings and foster an environment of collaborative information.

Analysis of costs and spending allows for informed budgeting and forecasting ability. Less time spent on estimating spending budget frees up resources for other activities. Never purchase more or less than you need with real-time updates on ordering practices.

Supplier Management

Suppliers are a vital part of any supply chain, and SCM software allows users to interact with them quickly and directly. Like any other part of the supply chain, suppliers need management too. SCM provides many options for selecting, maintaining, and holding suppliers accountable.

According to a survey, nearly 87 percent of organizations had a supply chain disrupting incident involving a supplier in the last three years. Such events are entirely avoidable with the implementation of SCM. When a large scale failure of the supply chain is at risk, having multiple tools in place to combat them before they begin is vital.

One such method is the use of scorecards. These cards are available to rate a supplier’s performance and reward them for accurate and consistent work. Enforcing contracts with suppliers and making sure everyone agrees is easy with accessible tools for communication.

Supply Chain Collaboration

Clear and consistent communication along all lines of the supply chain is a cornerstone of SCM. Inclusive structures are highly beneficial and give everyone access to all information pertinent to their role. With easily accessible methods of discourse, everyone stays up to date on all planning phases. Visibility across the entire chain prevents surprises.

Good communication is at the heart of any successful enterprise. With customizable portals and discourse areas, clients and customers will be comforted to know that reaching someone in the event of an issue is only a click away.

Integration

The costs, both monetary and time-wise, of integrating new software solutions can be daunting. SCM software can communicate with many ERP and EDI (electronic data interchange) solutions. Modules for inventory management, warehouse management and many others ensure that the integration of an SCM won’t throw your entire operation into disarray.

Seamless integration with other SCM efficiency modules will save vast amounts of time as retraining will not be necessary for software already in use. Allowing access through one secure login cuts down on time lost and prevents administrative issues.

Order Processing

SCM can help boost order processing speed through timesaving optimizations of order execution and identifying chances for up and cross-selling. Any solution that increases efficiency and actively pursues potential revenue streams at the same time is a welcome one.

Tracking orders and customer shipping data is another valuable SCM function.

The ability to capture demand from multiple channels including  XML, EDI and virtual storefronts further adds to the ease of integration. Quick in-house order building from purchase history and automated fulfillment processes simplify otherwise tedious tasks.

Inventory Management

Having a properly organized and stocked inventory is necessary. Matching inventory levels with current demand gives users the ability to make quick and informed purchasing decisions. Enhancing inventory reduction allows a new product to be moved in consistently, thus increasing cash flow.

In the event of rapidly increasing demand, an SCM helps maintain safety stock which prevents running out of product at a damaging time. Connecting customer service goals and inventory purchasing guarantee a constant stock of products that mean something to customers.

Get our Supply Chain Management Software Requirements Template

Conclusion

Having a clear scope in place is necessary when considering an SCM software solution. Hopefully, you have an idea of how to get started without being overwhelmed by the many options available.

The benefits of integrating an SCM solution are many, and operating without one comes at a substantial cost in today’s environment. How does your supply chain need to improve to reach its most efficient and cost-effective state? Consider your must-haves and take a look at our requirements template to get started on finding a perfect solution!

What are some make or break inclusions you look for in an SCM software solution? Please leave us a message below!

Hunter LoweSupply Chain Management Scope and How to Leverage SCM Software

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