Why does the term “plug-and-play” not refer to automating your supply chain? Running a supply chain is not a centralized process. Although materials feed from one end of the chain to the other…..the functions are different and usually separate.
One part of the supply chain purchases materials, another part will schedule manufacturing. One area arranges customer shipping while another processes returns. Imagine if we could get all these departments together and share information.
What benefits will befall us if we stop faxing orders, writing invoice numbers on scraps of paper and storing quantities & price on a spreadsheet. Enter the world of supply chain software.
By allowing software to share data from different sources you can forecast demand and supply. Access to customer purchases lets you determine who received what and what needs to be shipped. Inventory software alerts you in real-time as to how much needs to be ordered.
This is a partial view into the ultimate goal of optimizing a supply chain: Making only what is needed at the right time to minimize carrying stock.
The jobs that supply chain software fill are fragmented. Larger vendors have put the whole range of capabilities under one roof. But one size will not fit all. McDonalds has different needs that a cell phone manufacturer. Many companies will purchase industry specific applications….even if it prevents easy integration with other departments.
Important areas that need to be integrated and where companies like Innovecs can help include:
Your Partners : Sharing information on inventory levels, pricing and production capacity isn't easy between separate companies. It boils down to trust. This integration is easier if partners receive some benefit by sharing data.
Logistics & Warehousing : Giving a customer the ability to track the location of their order in seconds, goes a long way. Using technologies such as RFID, can track where goods have been and where they are. Your system can be notified immediately when a customer receives their shipment.
Scheduling : When production schedules change there is a downstream affect on labor, materials and machines. Scheduling software can help coordinate a flow in real-time between departments that are seperate but rely on each other.
Sometimes it’s referred to as an ASP (Application Service Provider). In supply chain circles, I’ve seen Software as a Service used more often. I won’t fight the trend.
You probably know where this is going. Why spend money hiring IT staff, implementation services and training when you can just rent it? This is a growing trend among large companies and small.
SaaS providers are definitely worth reviewing. Instead of doing a large scale installation; just download the application, train the users, let them login and begin entering data.
One objection I’ve heard is the expense. Obviously you’re going to pay a monthly fee as opposed to just buying a system outright. But if you buy a system outright you still have to pay maintenance fees and a team to do technical support. Not to mention the time it takes to install.
An underused benefit of supply chain automation is developing a network of partners. A SaaS provider makes this so much easier. All your suppliers or customers have to do is logon from the web. Build your core business…..outsource the nonessentials.
Although you’ve heard of ERP and CRM….we’ll delve a little further and see how these applications can improve your business.