Supply Chain Management Software Overview
What is Supply Chain Management Software (SCMS)?
Supply chain management is a complex process that involves communication and collaboration between multiple parties - including trading partners, suppliers, manufacturers, and distributors.
SCMS is generally used to automate and optimize the range of activities required to plan, control and execute product flows. This encompasses:
Acquisition of raw materials
Delivery to the final customer
The goal of SCMS is to coordinate the flow of products in the most efficient and cost-effective way. However, the degree of supply chain management required varies between companies. A number of variables can influence a company’s SCMS needs:
Size of operations
Number of suppliers involved
Type of industry
Length of the supply chain
This amounts to the SCMS product space being very fragmented. Accordingly, there is a range of products available - including large SCMS suites, ERP suites, industry-specific software, and point solutions.
Supply Chain Software vs. ERP Software
Supply chain management software manages data concerning incoming raw materials from external suppliers. Enterprise Resource Planning (ERP) Software, by contrast, is more internally focused. It manages administrative tasks by tying front office and back office operations together. This includes assisting with product planning and the physical production of finished goods.
However, supply chain capabilities are often included as a component of ERP suites.
The features provided by ERP suites are usually more generic than supply chain point solutions or industry-specific software. SCMS point solutions may focus more on individual modules such as operations planning or inventory management.
Supply Chain Management Features & Capabilities
SCMS products may specialize in one area or offer a range of features across areas. Here are the traditional modules and features that SCMS products may include:
Supply Chain Planning
Reorientation of supply network around demand needs
Optimization of resources
Optimization of materials and employee allocation
Supply network coordination
Raw material sourcing
Supply market assessment
Order fulfillment optimization
Generating purchase orders
Tracking purchase orders
Scheduling supplier deliveries
Creating pricing and product configurations
Logistics and Transportation Management
Delivery planning across transportation channels
Automation of warehouse operations
Stock monitoring across warehouses
Inventory tracking (using barcodes, serial numbers, or RFIDs)
Future inventory and price forecasting
Demand signal sensing
Optimization of future inventory stock
Sales and operation planning
Pricing and promotion tracking (this may be used more by retailers)
Some vendors also include more complex features such as:
Supply chain analytics
Product lifecycle oversight
Internet of things (IoT)
Supply chain management software is often sold as a module of large enterprise ERP or SCM suites. Standalone supply chain software products are cheaper, but pricing still varies greatly by overall sophistication and feature set.
Most vendors offer free trial versions of their software and will provide pricing information on request.
Open Source Supply Chain Management Software
An alternative option is open source supply chain management software. There are a number of free open source versions of SCMS. However, they are typically either broken up into modules or industry-specific solutions. For example, Odoo offers free versions of its manufacturing and inventory management software.
One drawback to open source software is that it may not include as many features as the paid versions do.