Supply Chain Management

What is SCM?

What is SCM?

Supply Chain Management Helps You:

  • check_circle_outline Improve information flow across the supply chain
  • check_circle_outline Optimize the physical flow of goods and materials
  • check_circle_outline Cut costs across the board
  • check_circle_outline Plan for and manage demand
  • check_circle_outline Reduce errors and automate financials

Improve information flow across the supply chain

What is supply chain management (SCM), and how can SCM software increase the efficiency of a supply chain? Firstly, before we dive any deeper, supply chain management is a group of processes that see a product from manufacture to final delivery to a customer. So, where does a management platform fit into all of this? Well, the short answer is everywhere.

One of the most valuable things supply chain management can accomplish is providing detailed information across the entire length of a supply chain. By increasing data visibility, owners and managers can discover areas that need improvement, plan for the future and optimize the entirety of their supply chains.

Supply chain management software leverages analytics and logistics tools that drill down into daily processes in search of data. This data is automatically loaded into customized reports that are displayed on easy-to-access dashboards for users to view. Information is king, and the right supply chain management tool can feed you valuable data pulled from everyday processes. Efficient communication is another important tool that can optimize supply chain tasks. By collaborating, team members can discuss improvements, meet up to discuss incoming data and discuss the future.

  • Customizable reports
  • Analytics tools
  • Dashboards
  • Data management
  • Supply chain KPIs
  • Collaboration tools

Optimize the physical flow of goods and materials

The flow of information is obviously important, but getting physical products from manufacturers to customers is the real goal here. Supply chain management includes many features focused on improving accuracy, speeding up delivery and increasing trust between businesses, clients and customers. The storage of goods and materials is also integral to a functionally competent supply chain. Features that speed up pick-and-pack, make multi-tenant or multi-warehouse operations less complex, and support third-party logistics can turn a slow warehouse around.

Communication is important here as well. Many systems include functions that automatically release information to customers and clients as their product moves from production to distribution. This way, customers know exactly where their product is and when they can expect it to arrive. The fewer questions a customer has the better, and a proper management system can keep them in the loop and worry-free. When looking for a management system, keep these features in mind:

  • Transportation management
  • Product lifecycle management
  • Warehouse management
  • Value-added services
  • Third-party logistics support
  • Maintenance management

Cut costs across the board

As a product moves from manufacture to delivery, supply chain management systems are always on the lookout for ways to cut costs. There are multiple processes a system can capitalize on in order to shrink costs across the entirety of the supply chain. Features that boost the accuracy of, well, anything are always good to have. Depending on the mistake, both time and money can be drained in order to make up for whatever the issue was. If a customer gets a package late, they may seek business elsewhere. If an employee is given the wrong picking information, the manager will have to incur return and reship costs. A driver may not be given an optimized route and could end up wasting funds on fuel or extra days spent on the road.

By leveraging supply chain management, users can gain insight into beneficial sales channels, reduce fulfillment times and save money at nearly every step of the way. Automatic features can order more supplies as necessary to avoid out-of-stock situations while also managing replacement parts for machinery. SCM is all about saving money, so make sure some of these features, if not all, are available when selecting a system:

  • Pick-and-pack optimization
  • Manual entry automation
  • One entry input
  • Supply re-orders
  • Omnichannel fulfillment
  • Supplier networking
  • Risk management

Plan for and manage demand

Keeping up with customer demand is another key tenant of successful supply chain management. An optimized supply chain can deal with the ups and downs of the market without storing too much useless product or running out at an inopportune moment. Many SCM tools include features that organize and help users build a storage system that keeps the most valuable products readily available. As demand grows and shrinks, your supply chain should be ready to scale up or down at a moment’s notice.

Forecasting tools help managers estimate how best to tackle future markets. Supply chain management platforms analyze trends in real time to give users an idea of what to order, when to order it and how to best stay stocked. The visibility into inventory processes provided by these tools takes the surprise out of managing a proper amount of stock to meet customer demand. A successful solution should provide procurement and inventory support to stay competitive. Because of this, you’ll want to keep an eye out for these helpful features:

  • Inventory management
  • Forecasting tools
  • Agile/scalable platforms
  • Procurement management

Reduce errors and automate financials

No one wants to put pen to paper and write out a budget. Many supply chain management platforms include accounting support that can automate much of the process. By eliminating the need for manual entry and calculation, businesses can expect fewer human errors and less time spent rectifying budget inconsistencies. Instead of spending large amounts of time tackling budget issues, employees can refocus on more important tasks.

This is another point where single entry accounting calculations are an advantage. Certain systems allow users to enter data only once before it automatically distributes it to necessary portions of the budget. Businesses that suffer from accounting errors or slow data entry should search for systems with these features:

  • Tax support
  • Budget support
  • Calculation automation
  • Save preferred suppliers by price
  • Audit tools

FAQs

How is automation affecting the landscape of supply chain management?

Technology is always pushing forward, and the rise of automation has important implications for the world of supply chain management. The use of robotics and AI is rising among warehousing operations and is even starting to show up in the transportation of goods and products. Drones are being utilized to quickly pick and transport goods through warehouses and automated trucking is taking its first tentative steps toward being a widely adopted option.

In order to keep up with the complicated and ever-changing world of global trade, supply chains need to be ready to adopt new technologies to stay competitive. Once far-fetched ideas like augmented reality may become widely accepted tools in the future.

How has the cloud revolutionized supply chain management?

Cloud-based deployment strategies are on the rise for good reason. Implementing a cloud-based system comes with a number of inherent advantages over their on-premise peers. Users that leverage the cloud benefit from secure backup, real-time upgrades, easy file exchanges and a lower cost of entry. Outside of these common benefits, here are a few more ways the cloud boosts supply chain operations:

  • Cloud-based analytics and manufacturing intelligence improves cycle times
  • Cloud-based applications automate compliance and reporting to free up time
  • Diverse application integrations and systems using APIs scale manufacturing strategies quickly
  • Businesses can measure order performance with software inclusions
  • Quality management features are increasing customer satisfaction across the board

How Do I Select SCM Software?

Finding the right supply chain management tools can be tough. The best way to approach the problem is by asking a few questions about your unique requirements as a business. Consider a few things before jumping into the wide market of vendors out there. Think about what kind of deployment strategy works best for your business; does an on-premise or cloud-based application fit your business better? How much room is there in the budget for a new system? What size is your operation and how complex does your solution need to be? By asking these probing questions, you can drastically narrow down the field of vendors. If you need a bit of guidance getting started, our Supply Chain Requirements Checklist can get you started, or our list of Essential Supply Chain Management Tools.

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SCM articles are written and edited by:

Hunter Lowe

Member of the SelectHub Market Research team

Hunter Lowe is a member of the SelectHub Market Research team. He writes content for Construction, Inventory, Warehouse, and Supply Chain Management.

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Kim O’Shaughnessy

Lead Editor

Kim is the Lead Editor at SelectHub, where she edits and manages content for over 40 different software categories.

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Thought Leaders

SelectHub has sought out and invited thought leaders to contribute to our SCM industry articles and resources. These thought leaders ensure we deliver quality content with the most accurate information, focusing on what matters most. No thought leader is compensated for their contributions, but shares our belief that information should be democratized so everyone can make the best decision.

Erik Kiser

Erik Kiser

CEO, Orderful

At 25 Erik started a consulting firm focused on writing EDI and B2B integrations for manufacturers.

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Cathy Morrow Roberson

Cathy Morrow Roberson

Market Analyst, Logistics Trends & Insights LLC

Cathy Morrow Roberson is a market analyst with a research and economics background. Roberson began her career as a librarian; she was then an analyst at an e-commerce start-up for a couple of years.

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Chris Cunnane

Chris Cunnane

Senior Research Analyst, ARC

Chris’ key areas of research include transportation management systems, omni-channel logistics and fulfillment, business analytics, and retail technology.

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Steve Hopper

Steve Hopper

Trusted Supply Chain Advisor

Are your warehousing, logistics, manufacturing, and distribution operations as efficient and cost-effective as they can be? Are your operating costs as low as possible?

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Suman Sarkar

Suman Sarkar

Partner, Three S Consulting

Suman Sarkar is a partner with Three S Consulting and an international consultant who has advised more than forty Fortune 500 companies in strategy and operations.

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How Supply Chain Automation is Changing the Landscape In 2020

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When the term automation comes up, most people experience a brief sci-fi laden slideshow in their heads. It’s the year 2020, humanoid robots take to the streets disrupting life as we know it and clashing with their old human masters. Lucky for us, when it comes to the world of supply chain automation, robots are more about increasing efficiency and less the whole enslaving humanity angle.

Hunter LoweHow Supply Chain Automation is Changing the Landscape In 2020
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5 Factors Driving Supply Chain, Inventory Management and Warehouse Management Convergence

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High-performance supply chains are the lifeblood of any company’s operations, and the cornerstone of strong customer relationships. Supply chains that excel at execution successfully orchestrate supply chain management (SCM), inventory management and warehouse management (WMS) systems to fulfill strategic goals. Both business-to-business (B2B) and business-to-consumer (B2C) customers now expect real-time responsiveness through any of the selling channels they choose to purchase through. By using SCM systems as the foundation to unify inventory management and Warehouse Management Systems (WMS), more companies can deliver real-time responsiveness and excellent experiences to their customers, through any channel, any time.

Louis Columbus5 Factors Driving Supply Chain, Inventory Management and Warehouse Management Convergence
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What Is Supply Chain Analytics and Leveraging It For Success

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The world and its economies are always in a state of flux. New trade regulations are put into place, disasters upset the flow of goods, stock markets rise and fall, and supply chains struggle to keep up with these chaotic changes. By implementing supply chain analytics and supply chain management software, businesses can attempt to capture and study the huge amount of data that accumulates as a product moves from A to B. As more and more enterprises adopt Big Data and analytical tools, supply chains are turning away from studying the past and instead, forecasting the future.

Hunter LoweWhat Is Supply Chain Analytics and Leveraging It For Success
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13 Essential Types of Supply Chain Management Tools

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As Amazon continues to raise the bar, the margin of error within supply chain management gets thinner and thinner. A simple mistake could easily cost your business thousands of dollars and allow your competitors to get ahead. But thanks to supply chain management software, it’s never been easier for companies to avoid such pitfalls. Supply chain management tools and techniques make it possible for users to reduce errors and costs while optimizing the entire supply chain. Here are 13 different types of supply chain management tools that make these SCM software packages valuable to companies:

Kim O'Shaughnessy13 Essential Types of Supply Chain Management Tools
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Logistics Management Software Solutions and How To Leverage Them

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If your operation is desperately looking for supply chain management tools, the process can be quite intimidating. There is a veritable ocean of possible solutions to choose from in today’s market. No one ever said having options was a bad thing, but too many options can make finding the perfect solution tougher than it needs to be.

Hunter LoweLogistics Management Software Solutions and How To Leverage Them
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Supply Chain Management Scope and How to Leverage SCM Software

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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.

Hunter LoweSupply Chain Management Scope and How to Leverage SCM Software
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JDA vs Infor: Which SCM Software Is The Winner?

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A good SCM software solution is imperative to a smooth manufacturing and distribution process. This is especially true for mid-sized businesses trying to stay competitive in today’s market while also looking for chances to grow their supply chain.

JDA’s Supply Chain Now and Infor Supply Chain Management are two solutions that are often considered by SMBs, but what makes them different? Where do their abilities overlap? As you surely know by now, it’s exceedingly important to make sure the system you choose fulfills your requirements. That’s why we created a detailed comparison of JDA vs Infor, so you can decide with confidence which system is best for you.

Kim O'ShaughnessyJDA vs Infor: Which SCM Software Is The Winner?
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10 Ways Cloud Supply Chain Software Is Revolutionizing SCM Operations

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Cloud-based supply chain software and applications are revolutionizing supply chain management today, scaling operations from small businesses to complex enterprises. Cloud supply chain software solutions are showing significant increases in implementation — so much so that not having one in place makes you an outlier.

Hunter Lowe10 Ways Cloud Supply Chain Software Is Revolutionizing SCM Operations
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Requirements And Features Of Supply Chain Management

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Today’s supply chains are massive, with the U.S. supply chain providing 37 percent of the entire nation’s jobs. In order to oversee these sizable operations, companies are turning to supply chain management software. This type of software allows companies to much more effectively source raw materials and control product cycles, automating error-prone processes and centralizing data for decision making.

Kim O'ShaughnessyRequirements And Features Of Supply Chain Management
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Future of Supply Chain Management: Experts Predict SCM Trends for 2020

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For 2020, we looked to the experts for their thoughts on the future of supply chain management trends that we may see in the new year. Between robots, the ever-growing cloud, capacity crunch, security and more, we’ve gathered a lot of interesting topics to discuss. Here are five SCM software trends for 2020:

Kim O'ShaughnessyFuture of Supply Chain Management: Experts Predict SCM Trends for 2020
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5 Key Benefits of Supply Chain Management

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Supply chains are the lifelines of businesses across the globe. They connect all of the processes required between the manufacture and the final delivery of a product to a consumer. So, in a nutshell, they are vital to nearly every economic system out there. However, these complicated business organisms need constant management and attention to stay healthy and competitive. Luckily for us, the benefits of supply chain management and the software suites designed to convey these advantages are widely available.

Hunter Lowe5 Key Benefits of Supply Chain Management
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Demand Forecasting: How To Forecast Demand For Your Business

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Predicting the future would be a valuable skill in any business, and we even have ways to attempt this today. Demand forecasting is our way of studying the world around us to form a theoretical map of how things, like demand, could fluctuate down the line. While this type of forecasting is valuable, being able to do so in real-time would be even better. Luckily, we have some good news. Real-time demand forecasting is indeed a thing and it has many benefits to bring to supply chains around the world.

Hunter LoweDemand Forecasting: How To Forecast Demand For Your Business
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5 Areas Supply Chain Optimization Improves

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It seems like all anybody talks about these days is how to optimize this while making that more efficient. The word “optimization” has become one of the more prominent — and, frankly, overused — buzzwords of the last few years. That said, there’s no escaping it. Supply chain optimization remains an important aspect of modern supply chain management and has lasting positive effects.

Hunter Lowe5 Areas Supply Chain Optimization Improves
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Supplier Lifecycle Management: What It Is & How You Can Benefit Now

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It goes without saying that pursuing a new relationship is hard, whether it’s business or personal. In order to land a strong connection in either realm, you have to be willing to put yourself out there. Strong relationships come with a myriad of benefits and this is doubly true in the world of business. Lifecycle management gives businesses and suppliers the ability to form strong bonds through the use of aggregated data and visibility. Strong supplier relationships mean better supply chain management, and software makes forming these partnerships easier.

Hunter LoweSupplier Lifecycle Management: What It Is & How You Can Benefit Now
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Best Order Fulfillment Software Solutions

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There’s a myriad of things that can go wrong in the time from a customer’s purchase, throughout shipping, and to eventual delivery. Even the slightest human error, like the wrong letter or number on an order, could disrupt the entire process and put the company’s reputation at stake. But shockingly, many businesses haven’t automated the process with order fulfillment software solutions. According to the Small Business Report by Wasp Barcode, 21 percent of companies use a spreadsheet program for tracking inventory, 18 percent do it manually with pen and paper, and a brazen eight percent don’t do it at all. That’s astounding, especially when you consider all the possibilities available with today’s SCM software.

Kim O'ShaughnessyBest Order Fulfillment Software Solutions
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7 Best Supply Chain Collaboration Software to Reduce Failure Rates

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Supply chains are bigger and more complex than ever before. Nearly 50 million tons of goods moving every single day in the US alone. In order to run a successful and competitive business, it’s more important than ever to have an efficient system that can manage risks and resolve issues. And while supply chain management software is evolving every day, the time it takes to understand the problems and make critical decisions is still becoming longer.

Kim O'Shaughnessy7 Best Supply Chain Collaboration Software to Reduce Failure Rates
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Gaining Supply Chain Visibility with Software Tools

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Wouldn’t managing your supply chain be easier if you could just use a magnifying glass to view everything you needed? As we’re sure you’re aware, however, that’s not exactly the case. Achieving full supply chain visibility into each process is difficult, if not impossible, without the proper systems in place. These systems could involve manually recording everything, but frankly, that’s way more work than it’s worth. Using software makes supply chain visibility a whole lot simpler.

SelectHubGaining Supply Chain Visibility with Software Tools
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