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Supply Chain Management Software Systems - An Executive's Guide

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From an executive's perspective, upstream and downstream flow of products, finances, services and information from source to customer is called a supply chain and managing this chain is supply chain management which is nowadays done with the use of software systems. Selection and implementation of such software systems is most important as it is with other systems, for improving working and efficiency.

An executive would look out for all the activities involved in the supply chain management of any organization before going for the selection of supply chain management software system. SCM involves series of activities right from sourcing, procurement, conversion and logistics and apart from these activities supply chain needs to integrate with other departments like marketing for accessing the demand of the product, interaction with suppliers and distributors, production and planning and customer relationship management for necessary information input. A proper supply chain management software system should be able to basically provide functionality to the whole chain in the way it is and also methods for enhancing the processes for better performance, reduce cost of the final product, save time and money.

A supply chain management software system shall be able to handle all the activities involved in the core supply chain with complete efficiency. Identifying the best suppliers in terms of assured supplies and prices or best possible and most economic transport system for procurement of raw material as well as distribution of finished product or establishing network of suppliers and distributors are few examples of such activities. All of these activities collectively and singularly have impact on the overall price of the product and eventually on the profit margins.

Scalability of supply chain management software system is another feature which should be given due importance. Now with improved communication facilities, supply chain can be established at global levels with international channel partners and suppliers as well as customers. The software system shall be able to provide necessary arrangements for such an association to comply and contribute in the growth of the company and should not restrict it. If in case SCM software is unable to handle such a change then either company will go for a tedious task of changing the software or will make patch work arrangements, either of them is not an ideal situation.

Managing funds within the supply chain is another feature which is expected from an automated software system and is also an important feature to facilitate smooth working and ease the complexity in the management of the chain. To keep up with demands and deadlines, management of funds with in the supply chain is required more than often by manufacturing and service based companies.

Production life cycle management, contract management and ability to setup benchmarks throughout the supply chain of the organization in comparison to the competitors and compliance of best practices are few other features to be sought in supply chain management software system. Legacy systems or manual management could not carry out such activities efficiently in the past.

For enhancing the management of supply chain, a software system shall be able to communicate with other departments whether running on legacy systems or latest ones. This is important because supply chain cannot run smoothly if it does not get timely and accurate information regarding product demand, production schedules, plant status, customer feedbacks etc. For obtaining optimum benefits of the supply chain management systems this communication is vital.

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