Supply-Chain-Management Software

Short description: Type of business process software

Supply‑chain‑management software (SCMS) refers to software tools and modules used to execute supply chain transactions, manage supplier relationships, and control associated business processes. By automating operations across product development, sourcing, production, and logistics, SCMS can enhance both the physical and informational flows within a supply chain—ultimately driving better performance, lower costs, and increased efficiency.

While functionality in such systems is broad, it commonly includes:

Customer-requirement processing
Purchase-order processing
Sales and distribution
Inventory management
Goods receipt and warehouse management
Supplier management/sourcing

A requirement of many SCMS often includes forecasting. Such tools often attempt to balance the disparity between supply and demand by improving business processes and using algorithms and consumption analysis to better plan future needs.^[1] SCMS also often includes integration technology that allows organizations to trade electronically with supply chain partners.^[2]

Supply chain management software is basically a type of computer program that helps retailers or allied field workers or professionals to handle and optimize logistics processes. Logistics hereby refers to the system of producing, transporting and distributing goods from a manufacturer down to the customers ^[3].

Supply chain management software is in part responsible for the coordination of a business’s platform. It is needed in the entire production flow ^[4], from sourcing raw materials to delivering a finished item, to costumers feedback.

Digital platforms have increasingly relied on supply chain management softwares are for sale, inventory and customers database utilisation too. For instance, it is a supply chain management software that is responsible for propping up the recommended items page on their website to any visitor. Supply chain management software is also used by such e-commerce platforms like Alibaba to interact, compute and evaluate customer satisfaction and feedback, whether pleasant or awful ^[5].

Modern supply chain management software often does not only indicate the origin and destination of the parcel but can also pinpoint the package's real-time location. Additionally, the software may also be able to give both parties involved the reasons why a parcel would be arriving late, be it weather conditions, port congestion or conflict/geopolitical shifts that would influence delays in delivery even before they happen. By doing this, room is created for companies to reroute cargoes and parcels autonomously.

Shift to Software as a Service (SaaS)

SCMS adoption is growing faster than the broader enterprise application software market. The annual revenue from SCMS (on-premises and SaaS) reached $10 billion in 2014, a 12 percent increase over 2013.^[6]

While on-premises software was still more widely used than SaaS solutions for SCMS in 2014, Gartner projected that about two-thirds of the growth in SCMS adoption between 2015 and 2018 will be based on the SaaS subscription model: driven by a growing realization of the benefits of cloud-based services, the SaaS-based SCMS market grew by about 24 percent in 2014 and is projected to continue to grow at a 19 percent compound annual growth rate, reaching $4.4 billion in annual sales by 2018.^[7]