February 2001 | How-To | Ten Tips

Selecting A Supply Chain Management System

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Choosing supply chain management (SCM) software can be the single most important decision a logistics manager can make. This solution can be one that drives your business to 99.8-percent fulfillment levels or drives it into the ground. Blinco Systems Inc. (www.blinco.com) offers this 10-point checklist to use when interviewing vendors and evaluating SCM software packages.

1. Select a vendor that talks your talk. The vendor has to intimately understand your specific business needs. Ask vendors what percentage of their SCM implementations have been successful, and how happy customers are with their ongoing service levels. The industry average is 50 percent; you should look for 90 percent and up. Look for a tight, fully integrated enterprise-wide solution with well-designed screens to eliminate onerous duplication of data, which will save you time and money.

2. Get absolute supply pipeline visibility. A fully synchronized solution with impeccable levels of real-time accuracy eliminates barriers to information flowing through functional silos so goods can always be located. All users need accurate data that they can obtain easily. Distributors, trading partners, vendors and clients must have bulletproof visibility they can stake their reputations on.

3. Choose software that drives collaborative processes. With great supply chain visibility, you can develop and analyze plans, run and rerun scenarios until you hit the ones that drive and meet your short- and long-term targets. The software should slice core data until it can be viewed in its most granular form, or rebuilt for decision support. Make sure the software lets you electronically share plans with all partners. It should also allow you to track project milestones, send e-reminders, and report exceptions.

4. Ask about a Request for Quote (RFQ) system. A powerful RFQ system streamlines the quotation process with high levels of compliance for product specifications. If your business requires fully- or semi-automated RFQs, look for in-house auctions that can be run online.

5. Make sure purchasing processes are linked. To balance supply to demand, buyers must have access to purchasing history, sales demands, marketing budgets, inventory availability, RFQs, and product development requirements. That way they can accurately forecast, budget, and make cost-effective buying decisions. The software should be able to set triggers to ensure vendor compliance.

6. Are the sales order systems flexible and quick? Customers need to be able to place orders in whatever manner they wish—the web, with your sales team or call center reps. Look for systems that easily pull up customers' order preferences, specials and credit history. Select a system that auto-sends order confirmations and delivery information.

7. Make sure inventory is visible at any point in its lifecycle.A dynamic SCM system needs to support allocations and reallocations of goods across the entire supply chain to meet critical production, fulfillment and delivery schedules. Along with auto-generation of customs or transit documentation and exception reports, you also want links to your financial and accounting systems. This ensures carriers' invoices can be checked, verified, even paid automatically.

8. Customer relationship management (CRM) is a must. A well-designed CRM system gives customers the status of their goods—via web, call center representatives, or even if they call the company president. The software must back up responses to customer queries with accurate information and reports, plus the ability to add to orders or reconfigure requirements—whatever it takes to consistently meet customers' needs.

9. Software that tracks and sells inventory. You can sell goods off the floor, or you can create "virtual" warehouses—whether goods are floating, flying or moving. Look for a system that tracks inventory down to the SKU, or via original serial numbers through multiple transformations. Ask if you'll save warehouse space by being able to track goods to their precise location.

10. Look at the entire picture. The ultimate role of the supply chain is to give your customers what they want, when and how they want it. This is accomplished when your SCM software lets you locate anything anywhere in your operation. Integration creates synchronization, which creates visibility.

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