All Blog Posts

The Role of Software in Combating Supply Chain Challenges

Software's Role in Supply Chain Management

As we try to settle into a “new normal” in the aftermath of the COVID-19 pandemic, we seem to be left with an interesting paradox: the global economy gets healthier by the minute, but the disruption to the global supply chain gets more challenging every day.

The explanation is fairly simple: as most of the world spent the better part of 2020 in lockdown, a lot of industries powered down or shut down almost completely. People were more careful with what they consumed and how they spent their time outside of their homes.

But now, after the restrictions have been lifted in most countries, consumer demand has skyrocketed. Most industries are playing catch up and they will most likely still be playing catch up in the near future.

As Tim Uy of Moody’s Analytics puts it, “There are bottlenecks in every link of the supply chain—labor certainly, but also containers, shipping, ports, trucks, railroads, air, and warehouses.”

12% of retailers reported heavy supply chain issues due to the pandemic and their problem has not been solved yet. The global chip shortage has affected not only the electronics industry but also the automotive one. Briefly put, there are issues at every tier of the supply chain and everyone is affected: large corporations, small companies, and individual consumers. 

How can your business avoid major disruptions now and in the near future? The right software can help.

Supply Chain Management Software Is More Important than Ever

It was always considered good practice to have as much control over your supply chain as possible. Supply chain management software to help in that endeavor is not a new concept. 

From the procurement of raw materials to the delivery of the final product and everything in between, SCM (supply chain management) software can help you maintain an overview of your current situation at any given point. Moreover, the right type of software can also help you dive in at more granular levels and identify supply chain issues before they become chronic problems. 

While large companies have relied on SCM software for years, some smaller companies have postponed SCM implementation. When you deal with smaller quantities, it seems manageable to do everything in a spreadsheet, an email inbox, or team members’ brains.

That might have been effective enough...until an unprecedented supply chain crisis struck and businesses are now left scrambling for suppliers, parts, equipment, and labor. This is when the real value of SCM software becomes apparent to any company, regardless of size.

How SCM Software Can Help You Manage Supply Chain Issues and Mitigate Risks

When one of your suppliers has a huge order backlog, there is very little you can do to get them to ship your order faster. But the right SCM software can help you work around or even avoid that situation altogether.

Get Actionable Insights from Your Inventory Analytics 

Good SCM software can help you understand your inventory and your needs—well beyond how many units of each material or product you currently have in stock. You can create combined reports between the materials you have in stock right now and what you would need for a certain amount of finished products. With this kind of reporting, you can quickly identify gaps and place orders faster than you normally would.

Furthermore, you can integrate your software with that of your supplier to know when certain parts or materials will be in stock again or when replacements can be available. AI-enabled software can help you schedule your production based on part availability. You can keep lines running or, when necessary, save costs by closing lines or rotating staff members if you need to.

Manage Suppliers, Wholesalers, and Retailers from a Single Dashboard

The current supply chain issues have shown us how deeply connected the world is. A factory strike in China and a storm in Texas can leave the whole world without essential goods.

This is why you need to think about your business holistically. Your suppliers and retailers may be managed by different teams, but they are all affected by global shortages and delays.

A bird’s-eye view over your entire production chain, along with a customer overview, will help you not only manage your supply chain better but also communicate your challenges and set realistic expectations with customers.

How to Choose the Best Supply Chain Management Software for Your Business

If you’re a regular on our blog, you know that we usually steer clear of one-size-fits-all solutions. We know that different companies have different needs, so without knowing your current challenges and goals for the future, we can’t say what solution works best for you.

There is no shortage of SCM software that’s already built and ready to use, either in the cloud or on-premise. There are countless vendors and you can start with a buy vs. build analysis to see if you can find a software that has the options and functionalities you need.

You also have the option to build your own custom software from scratch. This comes with the advantage that it can do anything you want it to, the way you want it to. But, of course, it’s a long process and, if you’re in a rush, it might not be the best option for you right now.

Luckily, there is also the middle ground. While out-of-the-box software can be implemented quickly, agility is important during a crisis. Out-of-the-box software is rarely agile and new feature implementation takes a lot of time—the company that developed the software has to analyze whether enough of their customers need it.

Enter the middle-ground solution: buy existing software and build custom features separately. This option comes with both speedy implementation (you’ll have running software very fast) and agility (you can build new custom features that your competition doesn’t have access to) much faster than building the whole software system from scratch.

Software already plays a major role in global supply chain management. If your business wants to more closely manage your supply chain, software is a great place to start. Reach out!