Supply chain management software

Many businesses that rely on effective supply chain operations can gain major benefits from their software systems, including their supply chain management tools.

Advantages of using supply chain management software

A good supply chain management software can:

• help control and reduce costs
• alleviate risks, such as late shipments and logistical errors
• improve customer service and communication
• help with forecasting and decision-making

Supply chain software can also help:

• automate major processes, such as order processing, invoicing and shipment tracking, and therefore save time and reduce administrative costs
• identify excess materials or processes and possible cost savings in logistics, warehousing and manufacturing
• improve inventory management and lead to more effective demand planning
• improve on-time delivery by coordinating all activities across your supply chain
• improve responsiveness to unforeseen events, eg machine failures, staff absences, missing goods, urgent customer orders and human error
• provide management reporting and analysis to your fingertips
• provide visibility across the network (between suppliers, production plants, storage and distribution centres) to give you a better understanding of your processes
• support collaboration and communication between partners, suppliers, distributors

Read more about the key features of supply chain management software.

Disadvantages of supply chain software

Supply chain management software can be expensive, especially if you are upgrading or installing an enterprise system such as Oracle or SAP. You should consider the costs of the software, on-premise installation, as well as ongoing running and maintenance.

You can mitigate the costs somewhat by using, for example, open source supply chain management software, or Software as a Service (SaaS) solutions, which eliminate the need for in-house maintenance and expensive installations. Read more about cloud computing.

Software integration is another important consideration. It can often be difficult to integrate a new solution with existing systems. You may need to put in considerable time investment and training to set up and run the system.

As with any software purchase, the needs of your business should come first when choosing a solution. See how to choose supply chain software.