What's the role of supply chain management software?

[Monirul Islam]

The goal of supply chain software is to improve supply chain performance. Timely and accurate supply chain information allows manufacturers to make and ship only as much product as can be sold. Effective supply chain systems help both manufacturers and retailers reduce excess inventory. This decreases the cost of producing, shipping, insuring, and storing product that cannot be sold.

Roadblocks to installing SCM software may include:

Gaining trust from your suppliers and partners. As a result of the spread of television in the 1950s, manufacturers were able to build so much consumer awareness of their brands that retailers were forced to carry certain products. Unfortunately, executives in some national brands were quite arrogant and used their power to extract concessions from retailers.

Over the next thirty years power shifted from manufacturers to retailers. The explosion of broadcast television channels and the advent of cable television made it more difficult for manufacturers to have as much influence with consumers. During the same period, retailers gathered new insights about consumer purchasing habits from their point of sale (POS) systems. Eventually, Walmart grew powerful enough to dictate terms to manufacturers. Although smaller retailers lacked Walmart's power, they realized that information about consumers was exceptionally valuable.
This power shift created friction, making many manufacturers and retailers reluctant to share information. While this cultural divide remains in many grocery and consumer products companies, it is fading as retailers realize they have to cooperate with manufacturers or supersize retailers like Amazon will render them irrelevant.

Internal resistance to change. If selling supply chain systems is difficult with customers and suppliers, it isn't much easier with internal staff. Few people embrace change enthusiastically; in fact, most resist new processes, interfaces and job responsibilities.

An effective organizational change management program can help. The goals should be to convince everyone from front-line operations people to senior staff that the new processes and supporting software make jobs easier. Said another way, the program should help everyone understand, "What's in it for me."

Source: cio.com