Why is SCM Software essential to supply chains?

What is SCM?

Supply Chain Management (SCM) is the management of the flow of goods, data and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination. Despite lots of people defining the supply chain with logistics, it is only one part of the supply chain. Today’s digitally based SCM systems include material handling and software for all parties involved in product or service creation, order fulfillment and information tracking - like suppliers, manufacturers, wholesalers, transportation and logistics providers and retailers.

The supply chain involves procurement, product lifecycle management, supply chain planning, logistics and order management. SCM can also encompass activities around global trade, such as the management of global suppliers and multinational production processes.

Why is SCM software vital to a well-functioning supply chain?

Following the impact of COVID-19, many companies are rethinking their supply chain strategies to adjust to the uncertain new conditions imposed on them following the pandemic. Supply chain management is now more important than ever before, with SCM software being turned to as a tool to help reduce costs and improve visibility. In the July issue of Supply Chain Digital, Richard Howells, VP of Solution Management at SAP Digital Supply Chain, commented: “End-to-end business processes across all supply chain functions are especially crucial now, during a time where supply chains around the world are being disrupted due to spiked demand and factory shutdowns. While unprecedented events such as COVID-19 will almost always catch us off guard, it’s important to ensure good visibility, agility and resilience across the supply chain in order to react in real-time to shifts in supply and demand.”

Nick Ford, VP of Product & Solution Marketing at software company Mendix, believes that SCM software brings an all-important ‘modernising’ effect to some supply chains. “COVID-19 has made it clear that outdated systems which can’t communicate with each other lead to difficulties in quickly pivoting to altered endpoints, ultimately leading to untimely deliveries and dissatisfied customers,” he said. “SCM software can help businesses streamline processes using intuitive algorithms and analytics to future-proof the major elements of supply chain management including integration, operations, purchasing and distribution.” 

Interested in reading more? Check out July’s issue of Supply Chain Digital!