Certainty Blog

Reduced Risk, Increased Resiliency: The Advantage of Supply Chain Management Tools

While supply chains are beginning to stabilize in a post-Covid world, challenges remain. As noted by KPMG, issues related to logistics disruption, production delays, commodity pricing, and labor shortages will remain through 2022. The result? To maximize the efficacy of suppliers and supply chains, companies must focus on data-driven diversification: Finding ways to ensure they’re getting the products they need at the level of quality they require without breaking the bank.

Supply chain management tools can help achieve this goal. Here’s how.

Supply Chain Managements Tools

What Are Supply Chain Management Tools?

Supply chain management tools help companies streamline supply chain processes by identifying areas for potential improvement, pinpointing risks within current supply chains, and providing solutions to help organizations assess their current supply network.

Many of these tools are software-based and capable of integration with other technologies such as customer relationship management (CRM), enterprise resource planning (ERP), and general accounting solutions to help companies gain access to critical supply chain data more quickly.

Some tools are designed to assess current supply operations against stated objectives and provide reports detailing any deviations. Others offer insight into potential risks or quality issues, while advanced, web-based solutions make it possible for suppliers to conduct self-assessments which are then evaluated by your staff to determine the need for potential intervention.

Put simply? There’s no single form factor or function for supply chain management software — any solution that helps your organization better manage supplies and suppliers falls into this category and can help play a role in improving overall supply chain reliability

What Are Some Common Types of Supply Chain Management Tools?

As the supply chain tooling market expands, so does the number of available tools. While it’s now possible to find a supply chain solution to meet virtually any specific enterprise need, several types are common across enterprises:

  • Shipping status and tracking tools

Shipping status and tracking tools help organizations keep tabs on shipments as they move from suppliers to logistics companies and into warehouses — or directly onto consumers. These tools are critical as the demand for high-speed shipments with end-to-end visibility becomes standard operating procedure for organizations.

Status and tracking tools are also essential in worldwide supply chain efforts. Given the increasing volume of goods shipped worldwide combined with emerging challenges around port availability and customs staffing, companies need to know where their parts and products are at all times — and have a backup plan if deliveries are delayed.

  • Order processing and procurement tools

Order management tools focus on streamlining the acceptance, order fulfillment, and shipping of orders. These tools often include robust data capture and automation functions to reduce the amount of time staff spend manually entering and checking information. Integrated with other supply chain management tools, order processing helps reduce total complexity.

  • Lean inventory management tools

Lean inventory frameworks focus on creating and shipping what’s needed at the moment, rather than allowing warehouses to fill up with products that may or may not be purchased. Achieving this goal, however, requires inventory planning tools capable of analyzing both current and historical inventory levels to help companies determine what products will be needed, when, and in what quantities.

  • Customer demand forecasting tools

Similar to lean inventory tools. demand forecasting solutions are all about looking forward — in this case, to help predict what consumer or partner demand will look like over time. Given the sheer number of factors that can affect product demand, from current price points to shipping times to economic and social pressures, accurately predicting the supply volumes needed for production is no easy task. Demand planning tools are designed to analyze data sets and derive reliable models that help keep operations on track.

  • Collaboration tools

The easier it is to facilitate connections between your staff, your suppliers, and your logistics providers, the better. Collaboration tools and portals make it possible to quickly communicate issues around supply bottlenecks, order delays, or shipping concerns.

  • Supply chain audit tools

Supply chain audit tools allow your company to quickly and easily assess the current operations of your supply chain partners and their manufacturing processes, ensure they meet your expectations and evaluate their alignment with regulatory policies. Regular audits of supplier processes and procedures can both pinpoint issues that require resolution and provide documentation to help limit the risk if suppliers are found to be non-compliant.

30+ Audit and inspection checklists free for download.

Why Use Supply Chain Management Tools?

So why bother with supply chain management tools? Given that they require some degree of effort for installation, integration, and deployment, why are companies better served to implement these tools now rather than later?

In a word, data. Given the sheer amount of information now generated by suppliers and supply chains around the production, quality, shipping, and delivery of products, it’s no longer possible for companies to manually input and analyze this data. Without access to robust business intelligence, however, organizations can miss key indicators that supply chains may be breaking down or suppliers may no longer be able to meet their obligations. In effect, if companies aren’t effectively deploying and using supply chain management tools they’re flying blind — hoping for the best but unprepared for the worst.

Agile, software solutions make it possible for companies to quickly collect and curate data to provide near real-time visibility into supply chain processes, in turn driving more effective and accurate decision-making to meet business needs and help lower costs.

The Benefits of Using Supply Chain Tools

Effective implementation of supply chain management tools offers key benefits for companies, including:

  • Improved supplier and warehouse management

Insight into supplier operations, timelines, and business processes can help your company better manage suppliers and determine if current supply chain networks are sufficient to support your growing business.

  • Reduced supply chain risks

Supply chain instability can lead to lost revenue and reputation damage if your company can’t reliably obtain the parts and products required for continued operations. Supply chain management tools make it possible to pinpoint potential supplier and distributor problems early, in turn providing time for your business to make alternative arrangements.

  • Increased operational performance

Robust demand forecasting and lean inventory solutions can help optimize the production process to ensure you’re only ordering the materials and producing the goods you need when you need them. Improved production planning can also help streamline replenishment processes to help reduce waste.

  • Enhanced supply chain visibility

The better your supply chain visibility, the better your process optimization. For example, sudden staffing issues at a supplier could set your production timelines significantly — if you learn about it too late. Equipped with effective supply chain management tools, meanwhile, you gain visibility into all aspects of the supply chain process and can take action ASAP.

  • Data-driven decision-making

Data drives business success. The more information you have about how your suppliers work, how quickly they can produce and ship products, and how your supply chain at large works in tandem, the better equipped you are to make strategic decisions that drive improved ROI. Supply chain management tools provide the reliable data you need to make better decisions.

The Risks of Opting Out

The goal of management tool ecosystems is to create a standardized, global view of suppliers and supply chains, in turn making it possible for companies to reduce the risk of missed delivery deadlines or unexpected supplier shortages.

It can be tempting, however, to opt-out of integrating supply chain tools, especially if there are no issues with current operations. Lacking the impetus for change, it can be challenging to get C-suite approval for tool spending. The problem? Once this impetus for change occurs, it’s likely too late.

Consider a seemingly stable supply chain that is suddenly impacted by political unrest or a lack of raw materials. Even if companies get notice of this disruption hours after it occurs, downstream inventory and supply are naturally impacted because they must now take steps to shift suppliers and adjust processing times.

Supply chain risk management tools, meanwhile, offer big-picture insight to help companies make strategically sound decisions. For example, tools may uncover potential weaknesses in having only a few suppliers of a particular part or component or may suggest the need for geographically diverse supply chains that provide resiliency in the event of sudden market disruption. By leveraging this data to proactively modify supply frameworks, companies can limit the risks caused by unexpected disruptions.

The Future of Supply Chain Management Solutions

As the supply chain tools market continues to evolve, future trends have begun to emerge.

First is the emergence of supply chain solution frontrunners — software providers capable of delivering a comprehensive approach to supply chain management that provides accurate, on-demand information to organizations. Next is the ability of supply chain solutions to work within existing business frameworks to help improve visibility without increasing complexity.

In addition, many of the best supply chain management tools are now leveraging always-connected, cloud-based portals to help companies connect with suppliers, evaluate current conditions and make decisions in real time. From online supplier management via self-assessment tools to instant deployment across the entire supply chain and custom-built compliance checklist functionality, these tools are on the cutting edge of supply chain management by giving companies the data they need, when they need it to help improve supply chain workflows.

Strengthening the Chain

Effective supply chain planning requires a combination of diversity, visibility, and regular maintenance. Single-source supply models simply aren’t sustainable, while limited information about supplier processes and production times puts companies at risk of lost revenue. Without a framework for regular review and supply chain maintenance, meanwhile, familiar operations can become functional roadblocks until organizations can determine the root cause of issues.

Supply chain management tools can help strengthen the chain by proving on-demand data collection, collaboration, and insight to drive sustainable and streamlined operations.

Reduce potential risks and increase resiliency with supply chain Software from Certainty. Come to see how we can help.

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