What is Supply Chain Management Software?

Supply chain management (SCM) software is an essential tool for many businesses in today's complex society. It provides a centralised system for managing and optimising the journey of goods or services, from ordering to global exports.

In this article, we will explore what SCM software is, where and how it is used (particularly in the food and beverage industry), and identify the key benefits of using these types of tools.

What is SCM software?

Supply chain management software, also known as SCM software, is a technology solution that helps companies streamline the supply chain process, providing tools to track, organise and manage the movement of goods or services.

How is SCM software used?

In the past, supply chain management could be incredibly time consuming, manual and complex, especially due to the scope of a standard supply chain and how many businesses and processes were involved. So, SCM technology is primarily used to make supply chains digital, more efficient and streamlined, and less prone to errors.

Today, most vendors provide a Cloud-based SCM platform that is connected to each business location (e.g. stores, restaurants, factories, etc.). Some tools can be specialised to a specific industry and others may offer a modular option, meaning that businesses can use the software for specific parts of the process, like inventory management, rather than across the whole supply chain. This can be a particular benefit if they already have other solutions in their tech stack that are preferred and cover certain areas of the supply chain already. Many vendors will also offer a customisable version of the tool for enterprise businesses who may have more bespoke processes or requirements.

In a competitive market where efficiency and speed are crucial, SCM software enables businesses to streamline their operations using various functionality, such as:

• Planning capabilities: Forecasting demand, planning orders, and managing inventory levels.
• Sourcing options: Using the tool to select and manage suppliers, procure materials, and negotiate contracts.
• Production and quality checks: Allowing users to digitally oversee the manufacturing process, schedule production runs, and ensure quality control.
• Delivery tracking: Managing logistics, coordinating transportation, and ensuring tracked delivery to customers or vendors.
• Returns: Managing the reverse supply chain for returns and faulty items.

The role of SCM software in the food and beverage industry

In the fast-paced industry of food and beverage, where freshness and a quick delivery is crucial and consumer demands are continuously evolving, efficient supply chain management is essential. And this is where Supply Chain Management (SCM) software is a perfect addition to any business in this sector.

Firstly, the food and beverage industry faces unique challenges in its supply chain, including:

• Perishability: Products have limited shelf lives, making efficient inventory management crucial to minimise waste and spoilage. This also means that many products require unique features like temperature control, and specialised logistics and storage solutions, which can add an extra layer of complexity to the whole process.
• Traceability: Strict health and safety regulations require recorded tracking of ingredients and production processes to ensure food safety and quality, and to be able to pull products should an emergency ever occur.
• Seasons and changes in demand: Fluctuations in demand and ingredient availability require flexible planning and sourcing strategies. There may also be specific campaigns run by the business based on certain holidays (for example, the Pumpkin Spiced Latte from Starbucks).

SCM software helps food and beverage businesses overcome these challenges by providing functionality that counters these areas. For example, the Orderly Digital Assistant is a module that's part of Orderly's SCM software and it uses local and historical data to track the demand of products and predict when the next busy period will be. It can then predict what your next orders should be to keep your inventory stocked to an optimal level.

The benefits of SCM software

Supply chain management software offers businesses a range of powerful advantages. By automating tasks and streamlining workflows, SCM software can significantly boost efficiency and provide a clear view of the entire supply chain. This leads to optimized logistics, inventory management, and procurement processes, which in turn dramatically reduce operational costs.

For businesses to thrive, customer satisfaction is paramount. SCM software helps achieve this by ensuring on-time delivery, accurate order fulfillment, and efficient handling of returns.  Furthermore, it equips businesses with the agility to respond swiftly to fluctuating demand, unexpected supply chain disruptions, and evolving market trends.

Perhaps most importantly, SCM software empowers businesses to make data-driven decisions. Real-time data and analytics dashboards offer valuable insights into supply chain performance, allowing for informed decision-making and continuous improvement.

Specifically for food and beverage businesses, SCM software provides additional benefits. It helps reduce waste by optimizing inventory levels and minimizing spoilage, contributing to significant cost savings.  By streamlining processes and improving visibility, efficiency is enhanced, leading to increased productivity.  Ensuring on-time delivery, accurate order fulfillment, and product freshness are crucial for customer loyalty in this industry.  Moreover, the ability to quickly respond to changes in demand, supply chain disruptions, and market trends is vital in the fast-paced food and beverage sector.  Finally,  valuable insights into supply chain performance enable informed decisions regarding sourcing, production, and distribution.

Key features in SCM software

1. Inventory management

Effective inventory management is essential for a successful supply chain, and SCM software provides the tools to achieve this.  Firstly, it allows businesses to accurately forecast demand, ensuring optimal stock levels are maintained.  Real-time inventory tracking across multiple locations provides a clear picture of stock levels at any given moment.

The software also helps optimize stock levels by balancing the need to meet customer demand with the costs associated with holding excess inventory.  This is further enhanced by automated replenishment, which triggers automatic reordering of stock when levels fall below predefined thresholds.

For industries with sensitive goods, such as food and beverage, temperature monitoring capabilities are crucial. SCM software can monitor temperature conditions during transportation and storage to ensure product quality and safety.  Finally, effective supplier collaboration is facilitated through streamlined communication channels, ensuring the timely delivery of high-quality ingredients.

2. Order management

Enabling collaboration in the supply chain

SCM software acts as a central hub for seamless communication and collaboration throughout the supply chain. It connects all stakeholders, including suppliers, manufacturers, distributors, and retailers, facilitating the smooth exchange of information.

Suppliers can share crucial details about their production capacity, lead times, and material availability, keeping everyone informed. Manufacturers can coordinate production schedules and ensure the timely delivery of components. Distributors gain the ability to track shipments and efficiently manage warehouse operations.  Finally, retailers benefit from real-time visibility into stock availability and delivery times, enabling them to provide accurate information to customers.

Managing risk in the supply chain

SCM software doesn't just facilitate smooth operations; it also equips businesses with the tools to proactively identify and mitigate potential risks within their supply chain.  Real-time monitoring capabilities allow businesses to track shipments, monitor production progress, and identify potential delays or disruptions before they escalate.

Automated alert systems provide instant notifications of potential issues, such as late shipments or stock shortages, enabling swift action.  The software also supports contingency planning by allowing businesses to develop alternative sourcing strategies and logistics plans, minimizing the impact of disruptions.

For instance, in the event of supply disruptions, the software can help identify alternative suppliers and adjust sourcing strategies to mitigate the impact of ingredient shortages.  Similarly, during product recalls, SCM software enables businesses to quickly trace affected products and manage recall processes efficiently.  Even with transportation delays, real-time shipment monitoring and contingency plans can be implemented to minimize delivery disruptions.

Optimising your supply chain for success

By leveraging the capabilities of SCM software, businesses can achieve a more efficient, resilient, and responsive supply chain. This leads to improved profitability, increased customer satisfaction, and a stronger competitive position in the market.

While many SCM software options exist, Orderly stands out as a leader, specifically designed for the food and beverage sector.  With its intuitive interface and powerful features, Orderly empowers businesses to optimise their supply chain processes like never before. From intelligent forecasting and automated ordering to real-time inventory tracking and seamless supplier communication, Orderly provides a comprehensive supply chain management solution to streamline operations and maximise efficiency. By leveraging cutting-edge technology and data-driven insights, Orderly helps food and beverage businesses reduce waste, control costs, and enhance profitability.