In our previous article, we discussed some of the basics in regards to what are necessities for any good software for the management of supply chains. We mentioned the importance of a software solution that provides analytics that allow companies to monitor key performance indicators (KPI). We also discussed how increased visibility into the supply chain, through metrics and KPI, can help supply chain managers improve processes continuously, exercising business process intelligence. In this piece, we are going to continue the discussion on elements of good software that will assist you with your supply chain management (SCM) and supplier relationship management (SRM) software decision-making.
Let’s begin by looking at warehouse management system (WMS) software. This type of software allows your enterprise to evaluate inventory and determine how well your just-in-time processes are behaving. With this type of software you can optimize and manage tasks and keep your costs low relative to parts required for manufacture and sale.
Next, you should evaluate software that assists you with transporting parts and finished goods from the local place of manufacture to the ultimate destination, anywhere in the world. Most companies under-invest in transportation, as it is a high-cost element, but transportation is incredibly important. Goods must be tracked, either through barcoding, or RFID, or remote sensors. It is very important to know definitively that your supplier has received the purchase order, and has responded in your SRM system to let you know that the parts or products are on their way. Be sure to select a purchase order management (POM) system that requires suppliers to submit information about deliveries, and implement advanced shipping notification and delivery call-off when necessary.
In all practices with suppliers, be sure to emphasize transparency. To facilitate this, use an SRM system that, in a customized way, has suppliers input a variety of necessary data to ensure that purchases are being made transparently and to ensure that suppliers are behaving in a transparent manner. While it’s true for some that people don’t want to intimately know what their suppliers are doing, it is becoming increasingly necessary as optimization of the global supply chain across the extended enterprise becomes a competitive advantage.
When determining whether to deploy an onsite software or a cloud-based SaaS software, we wholeheartedly recommend moving your SRM and SCM systems to the cloud. In this way you can facilitate global collaboration for all of your suppliers and all of your plants across the Earth, and information such as contracts and documents can all be accessed with nothing more than a secure encrypted password and an internet connection. Cloud based SRM and SCM software even allows for project management across multiple teams and an infinite number of locations around the world.
In conducting your due diligence into SRM and SCM software, be advised that SaaS cloud-based services are becoming more prevalent as SCM practices grow to involve multiple geographically diverse locations. It is also difficult to offer security infrastructure for partners across the globe with on-premise software; this problem is nonexistent for cloud-based SaaS software. With using a cloud-based SaaS service for SCM, suppliers can tap into the system with nothing more than web access, and security is taken care of by the software provider. This security is usually superior to on-premise software. Technology analysis company Gartner has publicly said that “when it’s about trying to orchestrate multi-enterprise business processes in the supply chain, that’s when the cloud model is emerging as a better tool” (Manufacturing IT Best Practices: Supply Chain Management, p. 10, by TechTarget).
A good rule of thumb to go by is that it makes sense to use a niche cloud-based SaaS software when the company has a highly specialized process. For larger companies with an enterprise resource planning (ERP) system such as SAP, there will be faster deployment and fewer integration challenges when opting for an integrated SCM suite. You will want a software that delivers both deep functionality in specific areas and integrating myriad applications from different vendors.
What are you experiences in choosing software for SCM and SRM? Leave your comments in the box below.