The following is a guest post by Ömer Bakkalbaşi, Chief Innovation Officer at Solvoyo Co., which provides supply chain optimization tools that give customers comprehensive capability to maximize profits while minimizing cost-to-serve.
The choice of supply chain software is an important one, primarily because of its ability to significantly improve a company's processes, reduce waste and improve profitability. Supply chain leaders may not be fully aware of how much the right software can contribute to the vitality of a company, but he or she certainly knows something must be done to improve performance. In a 2015 study of supply chain executives, the top two supply goals of respondents with their supply chain software were:
- Integration of a best-in-class supply chain planning technology with execution systems such as ERP or TMS or WMS.
- Improving planner productivity through better exception management and increased automation.
Those are the goals of supply chain leaders; what's actually happening is a far cry from that. When asked what best characterized their internal supply chain planning environments today, nearly 78% of respondents in another study* stated their organizations have not implemented systems that offer planning to execution integration. They describe their environments as being either "disconnected" or as having "modestly integrated planning environments across their companies."
The single biggest opportunity for improvement? Respondents in the same study pointed their fingers directly at integrating supply chain planning across the company.
Integration is a critical component of today's best supply chain software solutions. Is your organization's supply chain planning integrated? That's just one question to ask yourself to determine if you could benefit from new, more sophisticated supply chain software. Here are six others:
- Is your software "old?" Yesterday's technology can't effectively solve today's supply chain complexities. If you're not using the latest, state-of-the-art analytics and software technology, you're not taking advantage of capabilities that can:
- Determine inventory deployment across multiple echelons of the fulfillment network to ensure the right goods are in the right places at the right times.
- Minimize backorders and lost sales.
- Allocate resources and goods to maximize fulfillment of orders and service levels simultaneously.
- Consolidate goods to minimize transportation costs.
- Does the system you're using today require multiple applications and platforms to address your planning needs? If your system is not fully integrated – seamlessly connecting planning and execution – you're undoubtedly wasting time and effort and probably having to deal with a fair amount of error and continual missteps.
- Does your planning technology seamlessly flow with your continuously improving business processes? Or do you continuously fight to maintain focus and chase results? Planning and execution should be precisely aligned and within a single system to avoid wasted time, effort and error.
- Does your software periodically require costly refreshes? Today's best supply chain software is offered as SaaS, cloud-based and continually updated (at no cost to the customer). If your system requires traditional updates, you're (again) wasting both time and money.
- Is your software budget predictable? Is the value measurable? The ROI? Software isn't really an "investment" if you don't know what the return is; you're spending money that may or may not be paying off. Solvoyo, as an example, is a SaaS pay-as-you-go system that offers rapid deployment; most companies see ROI averaging less than six months with inventory savings of 10%-30%, freight savings of 5%-25% and on-time fulfillment improvements of 10%-35%.
- Is your hardware aligned with the needs of your software, and with your data complexity requirements? Most software has minimum hardware requirements related to storage, processing capabilities, etc. Oftentimes, on-premises systems can't handle the complexity of the data involved. As a cloud-based service, Solvoyo requires no capital equipment expense, and it is capable of processing significantly more data than non-cloud-based systems.
If, after answering these questions, you have a better picture of the capabilities available (and see all the ways in which you're not benefiting from them!), spend some time evaluating all the options on the market today and find the one that addresses your supply chain goals.
*2014 supply chain planning benchmark study, Supply Chain Digest