Supply chain management software

Not every business will get enough benefits from supply chain management software to justify the investment. You should consider your business requirements to see whether the investment would be worth your while.

Do you need supply chain software?

To determine if you need software to help you manage your supply chain, you need to:

• map your supply chain - ie identify the processes involved in the supply chain
• measure how well they perform
• compare this performance with best practices and market needs

When carrying out the mapping exercise, make sure that you consider the different process types. These include:

Planning

Planning is a process that's carried out for the long term. It balances combined demand - across all customers for all products - with resources, to ensure that appropriate resources are in place to fulfil requirements when they arise.

Execution

These are processes initiated by actual customer demand or, in some cases, planned forecasts. They include scheduling manufacturing and fulfilment processes, and the movement of products, materials and components.

Enabling

These processes prepare and manage the information and relationships upon which planning and execution rely. For example, agreeing on common terminology, ways of expressing size and quantity, and more.

Understanding these processes will help you evaluate the likely benefits to your business from the use of supply chain software.

Supply chain mapping

Mapping your supply chain is not only important for compliance and regulation, but it can also help you gain greater visibility, monitor potential threats and avoid possible disruption.

Begin mapping your supply chain by charting the flow of goods and information through your business. Identify:

• areas where you need to share information with partners
• bottlenecks in your supply chain

Work out costs associated with your supply chain, such as:

• transport
• distribution
• warehousing
• inventory costs

Use this information to identify where supply chain software will bring the greatest benefits, what business functions you want it to support, and if this justifies the cost of implementing the software. See also how to choose supply chain software for your business.