by George Purdy

Supply chain management (SCM) improves the methods that companies use to find and use raw materials necessary to make services or products. SCM also aids in the delivery of said services and/or products. Basic components of SCM include planning, source, creation, delivery and return.

In SCM a plan is the strategic portion for managing all the resources that go toward meeting the customer demand. A source chooses the suppliers who will deliver the goods and services needed to create the product and develop a set of prices, delivery methods and payment processes with the suppliers.

The manufacturing step is called make. It schedules the necessary activities for production, testing, packaging, and preparation for delivery. Many insiders refer to deliver as logistics. It causes a network of warehouses to develop and coordinates the receipt of orders from customers, etc. Receiving excess and defective products back from the customers and supporting customers who are not satisfied with the delivered products is called return.

For any retail or manufacturing company, their most disjointed group of software applications is probably their supply chain management software. There are many specific tasks for each of the five major supply chain steps, and specific software options available for each step. Although some software vendors have bundled groups of different software together, a coherently unified software package that can suit every company did not exist until just recently.

"Systems are only as good as the information they contain" is doubly true for SCM. When incorrect information is entered into a demand forecasting application, the results will provide an incorrect forecast. It is also true that if employees attempt to manage information manually, bypassing supply chain systems, an incomplete picture will be provided of pertinent company data. Management training and management coaching are vital, then, in order for supply chain management software to be correctly utilized.

The complexity of supply chain automation makes it uniquely difficult. Supply chain management software can only be used by the largest and most powerful companies because of the radical changes it requires. Both employees and suppliers need to modify their work methods. In addition, most companies need to get outsiders to support the system.

The world's most fractured group of software applications may be supply chain management software. There are dozens of specific tasks in each of the five major supply chain steps. Many require their own special software. Also the old adage about systems only being as good as the information that they carry applies to SCM doubly. If the employees bypass the supply chain systems and try to manage things manually, then the systems will provide an incomplete picture of what is happening in a company's supply chain. So management training a management coaching is necessary for the correct working of this management software.

About the Author:
G. Purdy, an expert on supply chain management software, wrote many articles and is a well-known public speaker on this subject. More resources and great products on supply chain management software at site management software.

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