13 Types of Supply Chain Management Tools
Amazon is constantly raising the bar in supply chain management. This means that there is less room for error. One simple error could cost your company thousands of dollars, and your competition may be able to win. It’s now easier than ever for companies to avoid these pitfalls thanks to supply-chain management software. Users can reduce errors and cost while optimizing their entire supply chain with the help of specialized tools and well-established supply chain management techniques. Let’s begin with the 13 types of supply chain management tools that are valuable for companies.
Types of Supply Chain Management Tools
Here is a list of essential supply chain management software tools.
1. Shipping Status Alerts and Updating
Real-time alerts are becoming a popular tool that provides timely information about all shipping activities. Large companies often have large supply chains that ship many types of cargo to customers across the country and around the globe.
These factors can allow growth but also make your supply chain more vulnerable to errors. You and your stakeholders are kept informed in real-time so that you can act quickly before little problems become bigger. These alerts can also be sent to your smartphone to notify you about the status of your supply chains at any hour of the day or night.
2. Order Processing
Order processing is vital to any supply chain. Solutions provide the tools to make it easier and more efficient. These tools can be used to support all aspects of order processing such as order processing, order fulfillment, billing, and order to cash.
These supply chain optimization tools automate all activities involved in order processing by using EDA software or similar technology to capture order data. It reduces the time required to process orders by eliminating the need for invoices and POs to be generated manually. This reduces human error and the risk of making mistakes by not having to manually enter order information into another system. This supply chain management tool is needed in super chains and eCommerce.
3. Lean Inventory
Toyota’s just-in-time production inspired Lean Production, a concept that dates back as far as the 1940s. Companies create only what they need at the moment, based on current and future customer demand. Manufacturers used to have large inventories of goods. This led to huge inefficiencies and wasted time and effort.
This practice aims to optimize production planning by reducing warehousing space and inventory costs, as well as the various procedures for storing excess inventory. A business can get a lot of return on its investment by using lean inventory tools. This allows them to reduce the need for warehouse space, streamline their labor force, and increase their productivity.
Although lean production principles are possible without the use of these tools, this type of supply chain management is more efficient. You can gain an even deeper understanding of the future of your supply chains by using simulation tools, demand forecasts, materials plans, scheduling, and scheduling tools. This makes planning production in accordance with lean manufacturing principles easier.
4. Warehouse Management
These tools can help you manage your warehouse’s day-to-day operations, depending on which solution you choose. You can choose from a variety of warehouse management options that are as specific or broad as you need. Advanced supply chain planning tools are available for some solutions, which allow users to manage complex logistics such as receiving, product tracking, and route planning.
Warehouse management tools can also be used to manage multiple warehouse locations and the kitting and bundling process. This is particularly useful when multiple products need to be bundled together and stored in different warehouses.
5. Specialized Freight Handling
Tools can include different types of freight handling functionality specific to each industry, in addition to shipping features. The evolution of cold-chain logistics, as well as new regulations regarding perishable goods, has led to changes in compliance standards. Some platforms integrate technology to verify that the goods are kept at the correct temperature up until the point of delivery. Vendors offer this tool as a standalone product, but it can also be integrated with a larger solution.
This tool is essential if you are shipping goods in this sector. You can reduce the costs of perished goods by ensuring product quality throughout your supply chain. This includes recall costs, item disposal, legal responses, and many other costs. Think about Chipotle’s E.coli outbreak in 2015. Even though stock prices fell through 2018, customer reviews were worse than during the original outbreak. A staggering 37% of customers reported eating at Chipotle less frequently due to concerns about food safety.
6. Bid and Spend
Many businesses rely on procurement and sourcing to support their supply chain operations. These activities require tools that can be used to support them. The best tools for supply chain management allow you to dig down and see exactly how much you are spending on each item you import and send out during production. Bid-and-spend tools automate a lot of the procurement process and reduce errors. Top tools, for example, can automate the entire procure-to-pay process.
These tools are also useful in helping you evaluate bids from different suppliers and identifying areas for improvement. Automated spend analysis is a feature of many modern tools. This allows users to better understand their procurement processes and suggest ways to improve them. These tools are great for procurement teams that have many members. They allow procurement officers to limit the spending and approve processes of employees.
7. Supplier Management
Supplier management, which is closely linked to bid and spend tools when it comes to procurement, is a must-have. Supply chain management tools, in addition to providing cost-saving features, can help businesses gain a better understanding of their relationships with suppliers. These tools allow you to see the history of your business partnership and the impact it has on the supply chain. You can view the contribution of each supplier to your business model using supplier performance analysis.
Decision makers can make better decisions about how to manage and change supplier relationships by being able to continuously assess the contributions of their partners. Supplier management tools can often be used to conduct bids, auctions, and negotiate for central procurement.
8. Demand Forecasting
Today’s supply chain tools can process huge amounts of data in a fraction of the time that it would take for a team of analysts. Analytics can provide insights into past practices and forecast future demand.
Supply chain forecasting tools allow you to predict your customers’ needs based on historical trends. This information is crucial to making critical decisions about production planning, labor management, and supplier relationships to meet the demand. Without forecasts, stock shortages can occur during intense demand periods. However, unexpectedly low demand can lead to high carrying costs that you might not have avoided.
These forecasts can be communicated using dashboard reporting. You can read more about dashboards and reports in the next section.
9. Analytics and Reports
This type of supply chain analytics tool can analyze your supply chain data and provide insights into consumer demand, supplier performance, and other factors. Analytic tools give users complete visibility into not only the location of inventory but also the health and performance of the company. Analytics can give insight into the whole company or just a few sectors. Forecasts can give insight into the demand for certain products, while warehouse analysis may reveal the best way to store and transport that product. It also allows you to analyze order processing, which could reveal the root cause of delays or errors. Users can also analyze logistical and transportation processes.
This allows decision-makers to see how carriers perform and patterns of error and delay. This visibility allows users to see how they can improve their processes and retire less-useful methods.
Reports are the best way to convey analytics. Different tools offer different reporting options, such as dashboards, tables, charts, and dashboards. The most popular method is the dashboard. They provide quick information once a user logs in to the system. The supply chain dashboard tools can display the most relevant key performance indicator (KPIs), as defined by the user.
10. Collaboration Portals
Modern supply chain monitoring tools allow companies and suppliers to work together in new ways via a designated portal. Supply Chain portals can solve many collaboration problems, including communication difficulties, bottlenecks in order and requisition, and other issues.
Portals allow all parties to view production progress, order forecasts, and product specifications. They can also access purchase orders, shipment history, schedules, and other information. Collaboration directly on documents eliminates the need to email back and forth in order to obtain the correct information. This also reduces the chance of making mistakes that are common with this type of communication. Collaboration portals allow both suppliers and companies to have full visibility into their supply chains, which allows them to keep up-to-date.
11. Security Features
Another element of supply chain tools is security. Data theft can lead to you losing your market position and damaging your relationships with suppliers. If your demand forecasts were stolen then your competitors could gain insight into your customers’ preferences and interests. This would allow other companies to sell to your market more efficiently, which could reduce your profit. You could lose the trust of consumers and business partners if financial data is stolen.
Implementing security features is essential to avoid these security problems. Today, most vendors offer security assurances to inform their clients of the efforts they have made to protect their data. They might include forbidding the creation of backdoors, preventing third-party vendors, aggressive patch management, and responding to breaches.
Your company may also take security measures to protect your data. To protect sensitive data, you can restrict dashboard reporting based on who is accessing it. A system administrator can also set file permissions with many tools. You can also integrate biometric devices for additional accountability.
12. Transportation and Logistics
You need some form of transportation management to be able to provide a complete solution. Transport and logistics tools allow users to manage the movement and storage of materials and inventory from one place to another. A solution that includes transportation management allows users to plan multi-stop trips, consolidate shipment to maximize space, and plan for less than loaded (LTL) shipping.
These features allow users to plan transportation and address any issues that arise. Individuals can track inventory and see when it is slowing down so they can intervene to fix the problem. Transportation modules offer collaboration options that allow all supply chain participants to manage to ship.
13. Compliance and Auditing
Today’s consumers demand that their products are safe, ethical, and well-made. Today’s tools make it easy to comply with both ethical and environmental regulations. Some solutions let users inspect suppliers closely to make sure that the minerals they are purchasing are not conflict-free.
Your business can be more transparent in third-party investigations by using auditing tools. These inclusions can store and collect data about relevant policies and regulations.