Covid-19 changed the world as a whole, but for distributors and others who rely on the supply chain, it changed the way they do business. Additionally, tensions created by sanctions, higher interest rates, and inflation are making matters worse. It’s no longer possible to place an order and expect to be able to rely on the estimated delivery date without question. Instead, businesses across the globe are facing supply chain disruptions that make it almost impossible to predict inventory flow based on supply and demand. That’s why so many of them are turning to supply chain management software, also known as SCM software.
In fact, the 2022 BDO Middle Market CFO Outlook Survey reports that while 66 percent of middle-market organizations say that they are optimistic about 2022 for business, 84 percent of CFOs at those organizations that have annual revenues between $100 million and $3 billion believe supply chain disruptions will present a moderate or severe risk to the business. In other words, supply chain efficiency has taken a front seat in the minds of those running successful businesses.
What Is Supply Chain Management Software?
Supply Chain Management (SCM) software allows warehouse managers to better manage the flow of goods in and out of the warehouse by using a centralized system. It streamlines supply chain processes such as order management, demand planning, supplier management, product development, management sourcing, transportation management, and inventory management. These innovative software solutions greatly aid warehouse managers with planning and managing their warehouse as a whole whether they deal in finished goods or raw materials.
The result? Supply chain software is key to improving customer service and those managers who use it will greatly improve their day-to-day operations and their relationships with suppliers and customers.
And today’s supply chain planning software is better than ever. In the past, companies were forced to use only a few well-known software manufacturers such as Oracle SCM, but today, there are others to choose from that may be a better fit for your organization.
Who Uses Supply Chain Management Software?
Multiple departments within a distributor can benefit from using SCM software. For instance, the warehouse manager can use the software to help with inventory management, while those in the accounting department can use it to help predict cash flow and get help with end-of-the-month reconciliations. Because supply chain management software utilizes predictive algorithms across company departments, it helps them sync their forecasts and orders in a unified and accurate way.
The Benefits of Using Supply Chain Management Software
There are many benefits to incorporating SCM software into a distribution center’s efficiency flow. The software will benefit warehouse managers, workers, customers, and suppliers. Here are a few of the key benefits of adding this useful software to your current system.
Better Forecasting
Warehouse managers, as well as others who work in distribution centers, benefit greatly when using supply chain management software. And one of the greatest benefits is the ability to forecast. When a warehouse carries too much inventory, capital is tied up in those products and cannot be used elsewhere. And when a warehouse doesn’t plan correctly and is short on inventory, it results in upset customers, and sometimes, a loss of business for the warehouse.
With today’s supply chain disruptions, it is more difficult than ever to accurately forecast supply and demand. But when using SCM software, managers can manage the disparity between their customer’s needs and their ability to source and receive the product. That’s because the software uses algorithms and various analyses to help predict future needs. As a result, distributors will have the product their customers need when they need it.
Build Strong Relationships
Loyal customers are the lifeblood of any distribution business, and the way you get them is by keeping your commitment when it comes to prices and delivery dates. But you can’t rely on old-school methods of doing that with the current shape of the supply chain.
Using supply chain management software helps you keep those promises. You will be able to forecast the demand and order in advance so that when the orders from your customers come in, you will have the product to fill them. And everyone knows that the best way to build trust and loyalty is to do what you say.
One System, One Team
As a warehouse manager, you know that you need to work with other departments to ensure that the departments that deal in orders, invoicing, shipments, and procurement are all on the same page. That can be difficult when every department uses different software and manages processes differently. With the right supply chain management software, all departments in an organization can work from the same platform. This will streamline processes and aid in cooperation and communication between departments.
Inventory Control
Ask any warehouse manager, and they will tell you that mastering the fine line between demand and inventory is the hardest job in the warehouse. But it doesn’t have to be. With the right SCM, managers can accurately predict the amount of inventory they will need for seasons, promotions, and everyday sales.
The SCM system uses predictive data and trend analysis to define and forecast inventory needs, and this smart system will help managers better predict and control their inventory needs.
Reduce Costs
Speaking of inventory, how much “just in case” inventory do you have in your warehouse taking up space? Excess inventory can be a drain on cash flow and prevent you from participating in promotions and other things that could grow the business.
The software can also help save money by streamlining shipping, seeking out the best and most cost-effective sources, and organizing deliveries in a way that saves time and money.
Instead of guessing about inventory, routes, and sources, why not use a supply chain management system that will help save money and reduce the number of man-hours needed to run your operation?
Manage Your Staff
It can be difficult for warehouse managers to keep track of picker hours and effectiveness, but with SCM software, you will never again wonder how well your warehouse staff is working. The software will keep track of picks per hour and error rates. That means you can move your staff to where they will be the most effective and stop wasting valuable dollars on employees who are better suited for other positions.
Manage Your Space
Your warehouse space is precious, and if it’s not carefully organized, it can cost you money. The items that sell the most should be located near the loading dock, and beverages that are often ordered together should be grouped so that pickers can fill the orders faster.
Properly organizing a warehouse takes a lot of time and experience, but a supply chain management system can help you do it right – and then keep it organized in a way that makes the most sense for your business.
Customer Requirements
Each of your customers is important, and paying attention to their special order requirements is one of the keys to keeping them happy and ordering more from you. But the requirements of all your customers can be difficult to keep up with. That’s where supply chain management software comes in.
The system will automatically keep track of your customer requirements and ensure that they are filled each time. No more upset customers because a requirement was overlooked. Instead, your customers will stay happy in their belief that you watching out for their interests and doing all you can to ensure that their orders are delivered exactly as ordered.
Customer Returns
Customer returns require extra paperwork and then an effort to track and refund the invoice. But when you use supply chain management software, all those details are automatically handled in the system. It will monitor the returns, ensure that refunds are processed, and if the return involves an insurance claim, the system initiates and tracks those, too.
Sourcing Help
Working with the right suppliers is another key to running an efficient warehouse operation. If your suppliers run their business right, it allows you to do the same. But locating suppliers takes a lot of time and effort. Why not let your SCM do it for you?
This useful software uses data and analytics to help you identify those suppliers that will best benefit your business. And because it’s based on data, the system helps take the risk out of beginning a business relationship with a new supplier.
Risk Management
Operating a warehouse comes with risks, but those risks can be reduced when using a supply chain management system. For instance, if you order a product from a new supplier and need to receive it in time for a large promotion, you’re taking a risk that the new supplier will deliver the order on time. But if you run your warehouse with a management system, you can put your SCM system to work and let it analyze the probability of your receiving the shipment on time to reduce that risk.
The system will also analyze any issues or problems you’re experiencing in the warehouse and offer some solutions to help you overcome them.
Expansion Anyone?
Any good warehouse manager knows that the ultimate goal is to expand their customer base and grow the business, but oftentimes, a lack of space keeps that from becoming a reality. But there is a solution: supply chain management systems. These systems can analyze your current warehouse space and create a plan to optimize the space so it can fit more products. This unique tool could mean the difference between spending a lot of money on a larger space and refiguring and working with the one you have.
What’s Holding You Back?
Operating a warehouse is a difficult job, but it could be made easier. Instead of struggling to optimize your space, employee time and picking strategy, customer requirements, inventory, supplier list, and deliveries, why not rely on algorithm-based software that can make your life easier?
If you want to explore the possibilities and find out how other warehouse managers are excelling even in these challenging times, reach out to eoStar. We’ll provide you with a demo, talk to you about your current challenges, and present a plan that will make your job easier and more satisfying.
