11 Jan 2024
Supply chain management manages the flow of goods and services from raw materials to final customers. Supply chain management is important and beneficial for businesses, as it can help them reduce costs, improve customer satisfaction, and gain a competitive edge.
However, managing a supply chain is difficult. It requires coordination and collaboration among multiple parties, such as suppliers, manufacturers, distributors, retailers, and customers. It also involves dealing with complex and dynamic factors, such as demand, supply, inventory, quality, and logistics.
To solve these challenges, businesses need a Supply Chain Management System (SCMS) that can help businesses optimise their supply chain performance and achieve their goals. SCMS is not a separate system, but a vital component of ERP software. By using SCM under ERP, you can have a single source of truth for your data, increase your efficiency, and scale your business. In this blog post, we will talk about what an SCMS is and how it can boost your supply chain management under the ERP software.
Table of Content
- What is Supply Chain Management System?
- Why Supply Chain Management System is Important for Businesses?
- How can ERP Software Support a Supply Chain Management System?
- Conclusion
What is Supply Chain Management System?
The Supply Chain Management System (SCMS) is a set of processes, tools, and techniques used to manage and optimise the flow of goods, services, and information. It involves managing the movement of goods from suppliers to manufacturers, from manufacturers to distributors, and from distributors to retailers or end-users.
Why Supply Chain Management System is Important for Businesses?
The Supply Chain Management System is important for companies as it enables businesses to streamline their operations, reduce costs, and increase profitability. An SCMS can also help businesses to:
- Improve the quality and consistency of their products and services
- Enhance customer satisfaction and loyalty
- Ensure timely delivery of goods and services
- Respond quickly and effectively to changes in the market and customer demands
- Manage risks and minimise disruptions in the supply chain
With an SCMS you can overcome many challenges and risks that you may face in your supply chain management, such as:
- Demand and supply uncertainty
- Inventory and logistics complexity
- Quality and compliance issues
- Customer and market changes
How Does a Supply Chain Management System Work?
According to many experts, an SCMS integrates the 5 different phases of your supply chain management. It can help you with the following aspects of your supply chain:
Planning
With a SCMS, you can plan and match your supply and demand of what you offer. You can also create and improve your supply chain network and strategy and take full advantage of resources and budget.
Sourcing
You can easily select and manage your suppliers, and procure the raw materials, components, and services that you need for your production with a SCMS. It can also help you negotiate and monitor your supplier contracts and evaluate and improve your supplier performance and relationships.
Manufacturing
An effective SCMS enables your company in efficient scheduling and control of manufacturing processes, while managing production resources and maintaining quality standards. It assists in tracking product and material, ensuring safety and compliance.
Delivering
An SCMS can help to coordinate and optimise transportation, warehousing, and delivery of your finished goods to customers. It can also help to manage inventory and orders and provide customers with visibility and service.
Returning
An SCMS can help to handle the reverse flow of defective, excess, or unwanted products from your customers to your suppliers or manufacturers. It can also help you recover the value and reduce the environmental impact of your products and improve your customer loyalty and retention.
Read more: Best Practices for Optimising Supply Chain Management in Manufacturing
How Can ERP Software Support a Supply Chain Management System?
ERP software can help integrate all your business processes, such as accounting, finance, human resources, and more. It also offers other functions that can complement SCMS in some of the following aspects:
Data Connectivity
ERP software collects and consolidates data from different departments such as finance, human resources, manufacturing, and inventory management. By integrating SCMS with ERP, supply chain data is seamlessly shared with other modules, enabling better decision-making across the organisation. For instance, when a supply chain manager receives a purchase order in the SCMS, the integration with ERP software allows the order information to flow seamlessly into the finance module, updating accounts payable and ensuring accurate financial records.
Process Automation
ERP software can automate and standardise the routine and repetitive tasks and processes in your SCMS, and reduce manual effort, errors and cycle times, then increase efficiency and accuracy. It can help you simplify and speed up your SCMS activities, such as order processing, inventory management, invoicing, and reporting.
Business Intelligence
The ERP system can analyse and visualise the data from your SCMS and provide you with insights and recommendations for improving your SCMS performance and decision making. It can help you monitor and measure the key performance indicators (KPIs) of your SCMS, such as customer satisfaction, inventory turnover, order fulfillment, and profitability.
Collaboration
Communication and coordination can be facilitated by ERP among the internal and external stakeholders of your SCMS, such as suppliers, customers, partners, and employees. It can help you share and exchange the information, feedback, and documents that are relevant to your SCMS, and align the goals and expectations of the parties involved. For example, if a production delay occurs in the SCMS, the integration with ERP software will allow instant communication with sales and customer service teams. This ensures that customers are promptly notified of any changes to delivery schedules and enables a coordinated response across departments.
Read more: ERP System in Supply Chain Management
Conclusion
To sum up, it’s necessary to have a Supply Chain Management System in your business, because it can help you manage and optimise the flow of goods and services from the source to the customer. However, to make your Supply Chain Management more efficient and effective, you may consider implementing it with ERP software to improve your supply chain performance and achieve your business goals.
Synergix Technologies is a company with over 30 years of experience in providing ERP in the manufacturing sector. We can help you save time by providing you with suitable options for your business. Synergix Technologies has been pre-approved by IMDA, so If you’re eligible, you can get funding up to 50% of the qualifying cost by implementing ERP software.
You can take advantage of a complimentary demo by contacting us right now!
