Find the best Supply Chain Management Software

While the supply chain management software market is relatively small (compared to many other markets), the vast disparity in functionality between different SCM programs makes buying decisions much more complicated. Some programs concentrate on business intelligence, others focus on inventory control or transportation management and there are full-suite systems that do all of the above and more. This buyer’s guide is designed to identify the features associated with supply chain management systems to help navigate the selection process.

Here's what we'll cover:

What Is SCM Software?

Common Features of SCM Software

What Type of Buyer Are You?

Market Trends to Understand

Benefits of SCM Software

What Is SCM Supply Chain Management Software?

Supply chain software is a software program or module designed to control end-to-end business processes across the supply chain, perform demand planning and forecasting, and manage supplier relationships. While functionality in these systems varies tremendously, common features include:

• Purchase order fulfillment

• Shipping

• Inventory management

• Supplier sourcing

• Execution-focused applications (e.g., warehouse and transportation management) 

Many supply chain management systems include forecasting, which helps companies manage the fluctuations in supply and demand by using sophisticated algorithms and consumption analysis to evaluate buyer histories. Supply chain optimization software can be an invaluable tool in maximizing production efficiency and planning for the future.

Screenshot of Freightview shipment overview dashboard

Common Features of SCM Software

What Type of Buyer Are You?

Third party logistics. Companies that manage the ordering, warehousing and transportation of supplies for another business need a robust solution that can handle the data and processes for lots of different companies. These supply chain management tools will include lot tracking, customer profiling, supply management and order fulfillment.

Manufacturing. Manufacturing software needs to be able to track suppliers, costs and customers. This is where features like collaboration, demand planning and strategic sourcing are most likely to be used.

Distribution. Distributors sit in the middle, connecting manufacturers to retailers and/or consumers. Distributors need to track products and terms for multiple suppliers and customers, and have robust inventory and transportation capabilities in order to ensure the products get to the right person at the right time. Freight brokers and forwarders also fit into this category, and they typically rely on specialized software that facilitates daily freight operations.

Retailers. Brick and mortar retailers will want to consider dedicated retail software, but phone—and Internet—order retailers function more like distributors. These buyers will need warehouse and transportation solutions, inventory control and possibly additional strategic/planning modules, particularly for the larger/volume-based retailers.

Market Trends to Understand

Online purchases. Over the last decade, online retail sales have exploded, and with them the need for effective warehousing, inventory and transportation control. Suppliers, more often than not, are taking a product from manufacturing not to a store, but to a warehouse where it is stored and ultimately sent directly to the consumer. Ensuring an effective inventory control path is absolutely critical throughout this process.

Software as a service (SaaS). Cloud-based software—that is, software that’s hosted by the vendor and accessed through a Web browser rather than being installed on a local computer—has been adopted by most industries to a large extent. SCM technology has been a little slower to adopt this trend, with major players like Microsoft, Geneva Systems, WISE and Fishbowl yet to develop Web-based systems. But as the technology improves, more and more supply chain management software providers will offer Web-based applications, with its benefits of collaborative networks and online purchasing integration. Currently, S2K and SAP are the biggest SaaS contenders.

Eco-friendly logistics. With environmental consciousness at an all-time high, consumers are beginning to think about logistics when it comes to purchasing their products. This trend is most noticeable in the food industry, where grocery stores and restaurants are beginning to brand and market products under a banner of being “locally sourced.” As transportation from suppliers is the easiest place for a manufacturer to cut its carbon footprint, buyers may want to look out for a program’s ability to identify suppliers based on proximity or other green factors.

Improving business intelligence. More and more companies want to know how their business spends money, so sophistication of planning, demand planning and strategic sourcing capabilities will only grow in an effort to meet the demand.

Increased demand for labor management. Companies using SCM software to track their inventory are now turning their attention toward labor optimization and the ability to manage each worker more efficiently. These systems can create a list of tasks for a worker so he can complete multiple types of work in one trip.

Benefits of SCM Software

The benefits of supply management software are considerable:

Increased efficiency. First and foremost, SCM software is designed to improve the efficiency of your operation, from inventory check-in and storage to distribution and transportation. By making the processes electronic and/or automated, the time spent on these tasks drops considerably, which allows you to send more products out faster.

Reduced costs. The resulting efficiency reduces labor costs. In addition, many of the intelligence features are specifically designed to identify cost waste and eliminate it—for example, where commodities can be procured at lower rates, how to combine shipping to reduce to transportation costs or where to reduce inventory to maximize storage capacity.

Trend analysis and business intelligence. The intelligence features, in addition to helping control costs, can help improve revenues by identifying strongly performing products and guiding the user toward meeting market demand.

While these supply chain solutions do come at a price, proper implementation will usually lead to a calculable return on investment within a year.