McKinsey and PwC envision a Supply Chain 4.0 as a connected, smart, and highly efficient supply chain ecosystem. In this ecosystem, there are no silos preventing full visibility of the needs and challenges of every link.
Digitisation is the key to eliminate the barriers and unlock the potential for achieving a Supply Chain 4.0, which Mckinsey foresees as…
- More Flexible
- More Granular
- More Accurate
- More Efficient
With digitisation being so critical to accomplish these outcomes, choosing the right enterprise supply chain software for your organisation becomes paramount.
The software for you: step-by-step guide for your best enterprise supply chain software
In order to select a system with the tools your business needs most, you’ll have to work with your team to understand:
- What you want to get out of your platform or what you need the software for
- Decide what functions you require
- What resources you have internally to implement the new platform
- How much guidance and support you want from your provider
- What challenges you could run into
- What allocated budget around purchasing and managing the platform you have available
- What future impact it will have on your business and ability to better scale
- What integrations with existing businesses you are looking for
- How reliable the vendor is and if it is a partner that can evolve with you
- What the ROI is or the estimated financial and operational gains over the investment
1. What you want to get out of your platform or what you need the software for
A clear understanding of the needs and wants is fundamental. Before exploring all the choices in the marketplace, you and your team need to focus on assessing and outlining the requirements of your specific situation.
This approach avoids the paradox of choice that may lead to feeling overwhelmed by the multiple supply chain solutions offered and establishes criteria for the software selection.
You may use different tools to conduct such an assessment. It is important to collect the voice of the customer through interviews or by applying six sigma tools, such asK-J or Affinity Diagram and Kano Diagram, among others.
2. Define what functions you require
During your evaluation of your business needs, you may include some of the functionalities listed below:
- Ability to track shipping activity in real-time. This includes receiving real-time alerts with detailed information about the cargo and shipment status to know where the cargo is at all times.
- Along the same lines as above, allowing for rerouting and rescheduling based on real-time conditions to optimize deliveries.
- The capability of freight handling, to ensure, for example, that your products are being refrigerated at the right temperature until the last stop of their delivery route.
- Maximisation of space and planning of LTL shipments.
- Analytics and reports that allow your company to see and evaluate carriers’ performance.
The list can continue. Once you have all the functionalities listed, go over them and categorize each functionality with “Must Have” or “Nice to Have”. This distinction is critical and allows you to focus on the top priorities and have more objective selection criteria.
If one of the vendors does not meet a “Must Have”, such a service provider can no longer be considered. Nonetheless, if the vendor does not meet some of the “Nice to Have”, the evaluation of that vendor will proceed.
3. What resources you have internally to implement the new platform
As a Supply Chain Software encompasses multiple areas, you need to plan capacity and availability of your stakeholders of each area involved. These areas may include the following in a typical software:
Supply chain planning
- Custom alerts
- Scenario-based plans
- Reorientation of supply network around
- Demand needs
- Optimisation of resources
- Supply forecasting
- Capacity estimation
- Optimisation of material and employee
- Supply chain network coordination
- Raw material sourcing
- Supply market assessment
- Cost analysis
- Expense logging
- Order fulfilment optimisation
- Return services
- Generating purchase orders
- Scheduling supplier deliveries
- Creating pricing and product configurations
Logistics and Transportation Management
- Delivery planning across transportation channels
- Route optimisation
- Rate analysis
- Shipping performance
- Labor management
- Fleet management
Warehouse & Inventory Management
- Automation of warehouse operations
- Inventory storage
- Stock monitoring across warehouses
- Inventory tracking (using barcodes, serial numbers, or RFIDs)
- Asset management
- Future inventory and price forecasting
- Demand signal sensing
- Demand forecasting
- Customer analytics
- Optimisation of future inventory stock
- Sales and operations planning
- Pricing and promotion tracking
- Supply chain analytics
- Product lifecycle oversight
- Internet of Things (IoT)
4. How much guidance and support you want from your provider
Defining the scope of work, which includes the kind and frequency of support from your provider, actually helps both parties. You understand if the support will be on-site or remotely or a hybrid model by combining the two. You also know how much time of support you can expect as well as when such support is available.
In turn, a clean and clear scope of work helps your provider to deliver according to your expectations and avoid misunderstanding.
5. What challenges you could run into
Gartner defines integrated risk management as a set of practices and processes supported by a risk-aware culture and enabling technologies that improve decision making and performance through an integrated view of how well an organization manages its unique set of risks.
Gartner highlights attributes such as assessment, response, communication together with reporting, and monitoring. These attributes are relevant in the evaluation of a supply chain solution and later implementation.
A tool that you may use is the Failure Mode and Effects Analysis (FMEA) to help you prioritize risks, estimate the impact on the outcomes, and how you can mitigate such risks.
6. What allocated budget around purchasing and managing the platform you have available
There is a wide range of options available in the market and with this variety, there is also a wide price range. Pricing depends on the functionalities, vendor’s reputation, and the complexity of implementation, among other factors.
Along the same lines, the impact on cash flows needs to be considered in the vendor selection of the supply chain software. Whether your company follows a phased- approach or the rollout is at the same time, it will have an impact on the financial aspects of your organization and thus you need to bear this point in mind during the solution and vendor assessment.
7. What future impact it will have on your business and ability to better scale
You want a software that can evolve as your business grows. The capability to scale is key when you are assessing the different software solutions for your supply chain. You probably want to avoid going through the same exercise again one year later, as it implies cost and effort.
Based on this, you need to consider the current and future needs of the business. When your business grows, the number of suppliers will probably increase, and supply chains become more complex with more layers. This is the reason why many supply chain solutions are cloud-based, which facilitates rollout in multiple locations at the same time and they are less resource-intensive.
Another related point is about updates. Technologies change fast so it is important to make sure that the software can be updated and upgraded following such changes in technology.
8. What integrations with existing businesses you are looking for
This is a significant point that is sometimes overlooked. To properly select a supply chain software, you need to be mindful of the potential integrations with other existing systems and infrastructure to leverage functionalities and minimize overlaps.
9. How reliable the vendor is and if it is a partner that can evolve with you
It is pivotal that the company behind the supply chain software has a solid reputation and provides you with excellent customer support throughout all the process from selection until rollout and beyond, in the trenches, when you are actually using the solution.
You need to be confident that the vendor will indeed provide support when needed. Ask about performance with other similar companies like yours, find out about the security of the data, and on having SLAs.
10. What the ROI is or the estimated financial and operational gains over the investment
To calculate the ROI, in addition to understanding the investment that the supply chain software implies, you need to quantify the following benefits:
- Cost effect reduction
- Company output increase
- Improvement on the profit level of your business
- Reduction of time spent in processes
- Better customer service
To achieve a Supply Chain 4.0, an investment in technology is required. Nonetheless, it brings high value to your bottom and top lines. If you need help getting started, Yojee would love to talk to you. Book a consultation session with us here.