How to Implement Supply Chain Management System and Improve Your Business Grow

A good supply chain helps reduce costs and improve quality. It also makes operations more efficient and less expensive. Have you ever wondered why some companies profit more than others in the same sector? How can you make money as a manufacturer or a distributor if there isn’t any coordination among suppliers?

In this article, we will show you how to implement a supply chain management system. We’ll talk about how it can help companies increase their profits, improve deliveries, and boost customer satisfaction.

What is a Supply Chain Management System?

An SCM system is any software a business uses to coordinate and direct the flow of its goods. This refers to anything from raw materials manufacturing to finished product delivery. SCM systems organize:

• procurement
• order tracking
• quality control
• order fulfillment
• distribution, and more

SCM systems are tools that help different teams and professionals work together. They connect all the experts needed for the process, from production to delivery. These include:

• suppliers
• manufacturers
• logistics managers
• wholesalers
• retailers, etc.

More modern SCM systems integrate advanced technologies such as:

• artificial intelligence or AI
• machine learning or ML
• Internet of Things or IoT
• automation, etc.

to supercharge business operations.

How Does the SCM System Work?

A supply chain is a coordinated network. Therefore, any SCM system must also have a cohesive structure that enables functionality and visibility along the product delivery journey.

As such, an SCM system would typically integrate features such as:

• inventory management
• warehouse management
• purchase-order processing
• demand forecasting
• supplier relationship management
• logistics planning, and so on.

Also, most SCM systems are integrated with bookkeeping functionalities to enable the business to manage its ledger and optimize finances effectively.

Over the years, cloud-based SCM systems have been adopted as software-as-a-service (SaaS). Cloud management of the supply chain allows businesses to track the entire lifecycle of a project. It offers close monitoring and adequate visibility at each touchpoint.

It emerged to fill the gaps with traditional SCM systems, which lack the 360° management enabled by cloud technology. Overall, cloud-based SCM systems are more scalable and efficient.

Key Advantages of SCM Systems

We already see that SCM systems are quite useful for businesses. But you need something more specific, right? Let’s see what benefits such systems have and how you can improve your supply chain with such software.

We speak from our experience as we at ProCoders have planned and developed quite a few supply chain management systems.

1. Cost Savings

An unorganized supply chain can cost your business more than you realize. Unnecessary expenses can be created by:

• mistakes in operations
• delays in deliveries
• errors in fulfilling orders

These costs can hurt your cash flow and make it harder to run your business effectively.

With a supply chain management (SCM) system, you can reduce these risks and improve how your business operates. The system provides tools to:

• Manage your inventory efficiently
• Organize your warehouse to save time and avoid confusion
• Automate tasks that usually take time, like tracking orders and updating records
• Keep track of your finances by linking accounts with supply chain operations

By using an SCM system, you can cut out waste and make sure every dollar you spend helps your business grow. It allows you to avoid the hidden costs and focus on reaching your financial goals.

2. Smart Decision-making

We live in a data-driven world. Any business that wants to succeed today must take data seriously. The data from an SCM system can help business leaders and managers make smarter decisions.

An SCM solution can help:

• forecast demand changes
• analyze market forces
• strengthen your company’s operations

Data from the software can help you identify areas that need improvement and implement planned measures.

3. Collaboration

One of the biggest challenges in traditional supply chain management was the lack of real-time information sharing. Without automation, businesses struggle to keep everyone on the same page. Even today, many companies find it hard to manage the flow of information across departments.

SCM software solves this problem. It connects all parts of the supply chain. It integrates departments like production, logistics, and delivery into one system. This way, everyone involved has access to the same information in real time.

4. Demand Management

Another great challenge for businesses is how to keep up with demand, ensuring that their stock is never way above or below the demand. SCM systems typically integrate demand forecasting and inventory management functionalities.

These two features help companies:

• analyze their market
• understand consumer behaviors
• find demand patterns

These, in turn, enable them to project demand and optimize their supply towards consumer expectations.

5. Logistics Management

Logistics is central to supply chain management. You optimize logistics and shipping operations by implementing an efficient supply chain management system. It helps identify the best transportation methods and routes for each good type. This, in turn, allows you to save costs on transportation and logistics.

The system can also help you maintain meaningful relationships with drivers and other logistics operators. This can improve the timely delivery of goods.

6. Business Stability

Supply chains are business-critical. For e-commerce companies, the supply chain is essentially the business itself. Therefore, any disruption to the supply chain can threaten the stability of the business. And one mistake may often cost you a big chunk of reputation.

However, by efficient supply chain implementation to capture and mitigate risks, businesses can make their operations more sustainable.

7. Quality Control

An SCM system enables businesses to exercise greater control over their goods and supplier relationships. This also means the business can quickly identify non-compliant behavior within the chain.

Most SCM software solutions have data analysis functionalities. So managers can track information and performance data.

This improves quality assessment and the level of product delivery. With SCM systems’ visibility, nothing should be lost to the cracks.

And this is often what makes people come back to you.

8. Productivity and Efficiency

The main goal of an SCM system is to improve business productivity. It enables businesses to manage their supply chain operations in real time. This, in turn, makes sure there are no delays or disruptions to the process. ERP in supply chain management systems is one of the reasons Amazon has same-day delivery!

So, don’t shy away from new tech decisions for your business.

Of course, some degree of delays is inevitable. However, an SCM system is useful to make sure the number is as close to zero as possible. Today, SCM systems are also integrated with smart automation solutions that minimize delays and boost performance.

What You Need to Know Before the Implementation of Supply Chain Management

Determine your business goals (short-term and long-term supply chain implementation plan). Having a clear vision for your company helps you to implement the most efficient SCM model that can help you achieve your goals faster. After all, not every supply chain management is the same. Even if you start supply chain software development from scratch internally by hiring developers, you still need to know what you want in order to define its functionalities.

Of course, this begins by auditing your existing system (traditional or digital) and identifying its failures as well as key areas for significant improvement.

Set objectives, metrics, and milestones. SCM software solutions are data-driven, and unless you define the metrics you want to measure and why, you would most likely be gathering data that’s not useful to you. Therefore, you need to define how success or progress would be determined.

Certainly, you have to be realistic. Setting impossible metrics and timelines is just as bad as not setting a plan at all; either way, you get an inaccurate picture of the state of your business. Avoid that by having a clear plan of steps in supply chain software implementation.

Crucial Steps of SCM Implementation

Step 1. Onboarding

The first among the SCM implementation steps is that you have to get managers, operators, and vendors familiarised with the new system. It would help if there was a business case study explaining why the old system was out-of-date and how the new system can enhance operations.

Key staff must be aware of the functionalities and capabilities of the new system so it is important to communicate frequently throughout the process. This onboarding stage may take up to a couple of weeks.

In addition, you should give room for some learning curve, especially if you’re transitioning from a very traditional model. Often, IT staff augmentation through a development company is the best choice here because the additional staffers only need to know so much to integrate well with the rest of the team.

Thus, supply chain management system implementation means that some of the former procedures will definitely change. You want to ensure that your employees respond well and quickly to this change. More so, you want to ensure that there is no disruption to your pending deliveries during the roll-out.

Step 2. Technology Considerations in Supply Chain Implementation

This is one of the most important decisions you would make in any SCM implementation plan. You need to determine if it’s an on-premise or a SaaS product.

Examples of questions to ask at this stage:

• How many servers do you need?
• Do you have supporting infrastructure?
• What development stack would it be built on?
• Will you build a new solution in-house or outsource the development?

Have answers to these questions before setting out on the actual implementation process. Even if it will take a month to decide the finer details of the project, that’s worth enough. Above all, choose options that support your business operations best.

Recommended: Cold Chain Logistics Challenges

Step 3. Start testing early and test often

An SCM is an overarching solution that transcends and connects all business departments. Thus, you want to ensure that it is a perfect fit for your business before the final implementation. The way to do this is to start testing early in the supply chain management implementation steps.

Carry key staff along throughout all the steps, including the preparation stage. Collect feedback from stakeholders (including vendors and third parties) and use the information gathered to refine the system before launch.

Finally, don’t think all the work comes to an end once you have finished implementing your SCM system. Not at all. Engineers and developers must continue to work in the background to assess the stability and functionality of the system, ensuring that it is working according to its defined purposes.

In all, depending on the size and complexity of the project, the whole process should take a couple of months. For instance, a project we undertook for HANDLE took seven months to execute.

How Can the ProCoders Team Help You to Implement the SCM System?

Of the many options available, building your own SCM system from scratch is a great way to transform your supply chain operations. Many on-demand software solutions today may not be comprehensive enough to cater to niche needs, especially if your business operates in a non-typical context. What to do, then? You don’t even have to hire web developers. A software development company such as ProCoders will listen to your needs and assemble a team of developers for you.

One of the real advantages of having a supply chain management implementation plan is business expansion. At ProCoders, we have witnessed this first-hand by building an SCM system that enabled a client to expand its core offerings to meet market demand. The client in question is HANDLE, a company that procures and sells medical equipment to healthcare organizations.

As you know, the COVID-19 pandemic has put a serious strain on hospitals and healthcare facilities. Stretched beyond its capacity at the time, HANDLE decided to explore a fantastic business opportunity to expand its supply pool by building an efficient SCM system. Before then, HANDLE only provided a marketplace for their clients (healthcare organizations) to sell old equipment. Now, it needed a comprehensive tool that enabled the company and its clients to track assets, manage warehouses, set budgetary allocations, and project demand. That’s where ProCoders came into the picture.

ProCoders always has ready developers in its talent pool, so within days, a team for HANDLE was ready. Going through the supply chain management implementation stages took some months and HANDLE’ supply chain management was transformed for good.

HANDLE’s revolutionary story is one that we try to replicate in every company we work with. Our software development process is essentially a partnership with the client, sustained by frequent interactions, meaningful communication, and consistent iteration until the project is completed to the client’s satisfaction.

Worried about offshore development? There’s no need for that. Central Europe has one of the most affordable prices for software development while keeping the quality top-notch. More so, at ProCoders, our developers are masters of communication, and we strive to maintain a good relationship with our clients to fulfill their needs.

Conclusion

Using supply chain management software has many benefits. It helps reduce costs by tracking materials and equipment. It also ensures that everyone involved in the supply chain, like manufacturers, distributors, and retailers, stays on the same page.

The implementation process isn’t very difficult if you work with professionals. You need to go through 3 key stages that have to be well-planned.

Decisions about how to hire developers and which tech stack to use must be taken carefully. There might be problems during the process, but proper communication is important, especially if you are using an offshore software development company.

We say all of this from our experience. ProCoders has augmented over 150 teams over 10 years, and we know for sure that communication is key.

Therefore, to supercharge your supply chain operations, you need a reliable software development company. Professionals who can easily handle the implementation of supply chain management systems or SaaS product development.

That company is ProCoders, and we would be glad to have you work with us. Contact ProCoders today!