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Types of Supply Chain Management Software: An In-Depth Guide

Jul 10, 2023

Supply chain management encompasses all the business activities involved in bringing a product to life, from sourcing raw materials to delivering the finished products to consumers. It includes not only the physical flow of goods but also the flow of information between suppliers, manufacturers, distributors, and third-party vendors. The first step in supply chain management (SCM) is sourcing the required equipment and suppliers. The manufacturers then produce the products and transport them to distribution centers. Finally, the products are delivered to the end location, which is typically the customer or a retail store. 

Software programs can help streamline this multifaceted process, making each step more organized and efficient. Using sophisticated SCM software, businesses can track inventory in real time, automate routine tasks, communicate with stakeholders, and collect data to inform decision-making. This article explores the different types of supply chain management software, how these programs operate, and the benefits they provide to businesses and customers.

 What Is Supply Chain Management Software?  

While they’re often perceived as linear progressions, supply chains are better described as complex networks involving multiple functions and participants. SCM software plays an essential role in optimizing processes, enhancing efficiency, and facilitating the exchange of information between stakeholders. This software comes in various forms, so businesses can choose the programs that meet their specific needs. For example, manufacturers, retailers, and e-commerce companies frequently rely on demand planning software to align production and inventory levels with customer demand. Companies that store and coordinate the movement of goods and materials can use inventory management software to monitor product quantities and avoid overstocking or understocking. Similarly, transportation businesses can leverage transportation management systems to optimize shipping and delivery services. Many software programs are designed to seamlessly integrate with other systems to facilitate collaboration and reduce silos. 

 Types of Supply Chain Management Software  

Technology benefits each stage in the supply chain, from planning and procurement to production and delivery. Some SCM software programs focus on a particular aspect of supply chain management such as demand forecasting, product lifecycle management, or transportation, while others offer an integrated overview of supply chain logistics. Continue reading to explore the most common types of supply chain management software and discover how these technologies are revolutionizing modern business processes. 

 Inventory Management Software 

Inventory management software (IMS) controls and optimizes inventory processes through real-time inventory tracking, automated ordering, and demand forecasting. Using IMS, businesses can easily keep track of incoming and outgoing goods, ensuring optimal stock levels and avoiding bottlenecks. Examples of inventory management software include: 

Warehouse Management Software 

Facilities that house, package, and ship goods and materials use warehouse management software to keep track of the quantity, location, and movement of stock in the warehouse. This software helps companies standardize storage, picking, packing, and shipping activities to reduce inefficiencies and waste. Many warehouse management programs also incorporate labor management, resource allocation, and reporting tools. Some frequently used warehouse management software programs include:

Transportation Management Software 

The shipment of goods and materials is an integral stage of the supply chain, and transportation management software (TMS) helps to optimize every step of the process. Businesses can use TMS to determine the ideal carrier to transport goods based on cost, transit times, reliability, and capacity. This software also helps optimize shipping routes for faster and more cost-effective delivery. Another critical feature of transportation management software is shipment tracking, which provides real-time visibility into the status of shipments. Companies have many different transportation management programs to choose from, including:  

Supplier Relationship Management Software 

Supplier relationship management (SRM) software enhances communication between business suppliers. It allows companies to consolidate supplier data, record contract terms and conditions, automate purchase orders, evaluate supplier performance, and execute other vital functions. Most SRM programs have built-in communication platforms that help businesses and suppliers share messages and documents. Small- and medium-sized companies can often use enterprise resource planning (ERP) systems for supplier management, but large corporations may require a separate SRM platform to coordinate all of their supplier relationships. Some of the most used supplier relationship management systems include: 

Demand Planning Software 

Demand planning software (DPS) predicts customer demand using algorithms that incorporate buying trends, past sales data, and input from various stakeholders. Businesses use DPS to optimize inventory levels, align production schedules with estimated demands, reduce storage costs, and anticipate market fluctuations. Some examples of demand planning software programs include:

Enterprise Resource Planning (ERP) Software  

ERP software integrates inventory management, customer relationship management, financial planning, human resources, and other business functions into one centralized system. It provides a comprehensive overview of an organization’s processes, allowing users to access real-time information and make data-informed decisions. In the context of supply chain operations, ERP systems help businesses streamline production planning, procurement, manufacturing, stock control, and warehouse management. Examples of ERP software programs include:

Choosing the Right Supply Chain Management Software for Your Business  

Supply chain managers can access a wide range of software options, each with unique benefits and features. When choosing a supply chain management system, it's important to consider the company’s specific needs, budgetary limitations, business objectives, and areas for improvement. To make an informed decision, businesses should evaluate the following: 

  • Scalability. Businesses planning to grow or expand operations should ensure that the software can accommodate their evolving needs. 
  • Integration capabilities. SCM software that integrates with other systems can boost visibility, promote collaboration, and reduce implementation costs.
  • Functionality. SCM software programs vary significantly. Companies should evaluate the capabilities of various programs to find one that meets their needs without including unnecessary or redundant features. 
  • Ease of use. Intuitive features and a user-friendly interface can help supply chain professionals easily navigate the software and maximize its utility. 
  • Cost. Companies should consider upfront charges, licensing fees, software maintenance requirements, and employee training expenses to determine the total cost of implementing a new software program.
  • Customer reviews. Reading reviews can help businesses gain insights into the software company’s reputation and the potential benefits and drawbacks of various programs. 

The Impact of Supply Chain Management Software on Business Operations 

As technology advances, more businesses are adopting digital solutions to stay competitive in the global market. This is especially true in supply chain management. One of the primary benefits of SCM software is improved visibility. Using this software, organizations can track inventory, monitor the status of shipments, view predictions about customer demand, and detect delays or interruptions with the click of a mouse. Digital solutions can also improve internal communication and cross-company collaboration, enabling stakeholders to instantaneously share information and work cooperatively on strategic initiatives. Additionally, many organizations use SCM software to automate recurring tasks such as order processing, shipment tracking, and inventory management, resulting in both cost savings and increased productivity. In the complex world of supply chain management, software programs and other technologies are indispensable tools for enhancing operational efficiency and achieving organizational objectives. 

Overcoming Challenges with Supply Chain Management Software  

Supply chain management professionals must continually adapt to changing circumstances and find innovative ways to overcome challenges. Worker shortages and travel restrictions resulting from the COVID-19 pandemic caused worldwide supply chain disruptions. Organizations faced materials shortages, production delays, and significant financial losses, while customers were left wondering when they would get the products they needed. Everything from natural disasters to labor strikes can cause disruptions in the supply chain, and supply chain management professionals must be prepared to deal with these problems as they arise. 

Supply chain management solutions or challenges can also come in the form of everyday difficulties such as navigating relationships with suppliers, ensuring regulatory compliance, and balancing inventory levels to meet fluctuating customer demands. Whether the obstacles are localized to a particular organization or occur on a global scale, supply chain management software is essential in overcoming them.

The Future of Supply Chain Management Software  

Technologies such as artificial intelligence (AI), machine learning, advanced data analysis software, and the Internet of Things (IoT) have dramatically changed the supply chain management landscape—and this trend is expected to continue. Organizations are digitizing supply chain processes at an unprecedented rate. For example, a recent study showed that 64% of supply chain leaders have already implemented generative AI or plan to incorporate the technology in the next 12 months. These advancements have the potential to revolutionize supply chain operations and drive even greater efficiency and productivity. Businesses must stay up to date with the latest technologies and developments in supply chain management software if they want to thrive. 

Final Thoughts on the Types of Supply Chain Management Software 

Supply chain management is a multifaceted field where professionals leverage cutting-edge software to optimize supply chain processes. If you’re interested in the dynamic world of supply chain management, an online degree from WGU can be the first step toward a fulfilling career. Our B.S. in Supply Chain and Operations Management degree program can equip you with sought-after skills in data visualization and analysis, business analytics, organizational behavior, project management, and other essential domains. WGU’s degree programs are competency based with no set log-in times, meaning you can complete coursework and exams at a pace that works for you and your schedule. Begin your journey toward career advancement by applying today!

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