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Home : Articles : Supply Chain : Supply Chain Software

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SUPPLY CHAIN SOFTWARE

Supply Chain Management (SCM) software can have tremendous financial benefits for companies. Some businesses have saved millions just by automating their supply chains, but those savings gain often do not come easily. When it comes to implementation, supply chain management software is one of the most difficult systems to effectively put in place. However, there are ways to prevent SCM implementation problems. This article will seek to identify the most common supply chain implementation problems and will provide some tips for implementing supply chain software more smoothly.

Resistance from employees and internal stakeholders is one of the biggest problems companies run into when putting an SCM system in place. Employees usually do what feels comfortable to them and generally have a negative view of new technology, especially when it causes major changes to their job. In many offices where a new SCM has been used, employees have taken great pains to circumvent the system and instead, continue using their old-fashioned spreadsheets, fax machines, and telephones to get the job done. Furthermore, many employees who do use the system are ready to abandon it after the first error or problem that they encounter. For example, forecasting aspects of the software are often inaccurate initially because the system needs to be tweaked and needs to have real data for a period of time. Many companies have had to deal with employees who lose confidence in the system initially after they come face to face with a forecasting error that has resulted from lack of data from implementing the new system.

Both of these problems can be prevented by thoroughly preparing their employees for the SCM implementation. Employees will require training that focuses not just on how to use the software to do their job but also on how the software will make their job easier and more efficient. Too often, employees are told how the new software will benefit the company and the company's bottom line, but today's employees are more concerned with how these implementations will directly benefit them. Also, employees need to be prepared for the fact that the software may make a few mistakes initially, but that doesn't mean the software is unreliable or useless. It simply means that it needs some fine-tuning or needs better data. It may also be that the employees need to learn how to use the software better.

Another problem companies discover with SCM is that the software is rarely 100% compatible with their existing ERP systems. In many cases, the ERP will need to be modified or at least tweaked in order to accommodate the new SCM system. These are steps that companies need to be prepared for in advance so that they can be dealt with promptly.

Furthermore, companies that want to use SCM may find it difficult to bring their suppliers on board. Generally, part of the SCM process may involve pushing the ownership of a company's inventory over to its suppliers. Many suppliers, however, are not prepared or willing to make such a change and that leaves the companies with a complicated decision: switch vendors or work with them outside the SCM structure. Of course, businesses can avoid making those decisions simply by being more effective at convincing suppliers to join their SCM strategy. This may require both communication and salesmanship

Convincing vendors may be easier than many companies think. First, the business must be prepared to send its people into negotiations with the vendors' top people. These are the people who will be making the decisions, so it is critical that they be the ones who take part in the discussions. Dealing with anyone else can be a waste of time. During every meeting, the company must emphasize how the SCM can be beneficial to both parties. Like employees, vendors aren't necessarily interested in how the new program will improve the company's bottom line, they want to know how it will directly help them. One point to keep repeating throughout negotiations is that the vendor's adoption of the SCM will mean that more business from that company will be coming its way. Vendors respond to the increased business potential and are more likely to agree when they know doing so could spell a steady stream of revenue.

The bottom line is that SCM cannot be adopted lightly. It requires carefully planning and preparation. Companies must make sure that their employees, their suppliers, and their existing technology is ready if they want to see the implementation be successful.

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