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Home : Articles : Supply Chain : Supply chain Software II

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SUPPLY CHAIN SOFTWARE II

Since the late 1990's supply chain software has been available to companies, but until recently most firms steered clear because of the costs of implementation and the past disappointments in deploying other, so-called revolutionary technological advances. When the economy started to take a downturn, however, many organizations recognized the need to do something drastic to turn the tide in their favor or at least to minimize the negative impact the economic changes brought about. Supply chain software was one of the answers many companies chose.

A majority of all large businesses are currently using supply chain software and most of them are seeing positive results. One company was able to cut several million off its inventory expenses while another has been able to extract over $15 million in value from its supply chain software implementation. Supply chain software can deliver these results because it allows companies to streamline communication between the company and its vendors.

For example, supply chain software allows vendors to be automatically notified when the company's inventory of a specific product needs to be replenished. The vendor can prepare the order, get it filled, and send it to the company in considerably less time than it would take the old-fashioned way. With this approach, the business no longer has to keep a large inventory on hand because it can be refilled on an as needed basis.

Another cost saving feature of supply chain software is that lowers the time required between purchase and delivery. The software allows vendors and businesses to deliver quotes in real-time and to acknowledge order receipts instantly instead of in the 1-2 days it would normally take. Placing orders, making transportation arrangements, and dealing with returned merchandise can all be done faster and with fewer hassles thanks to modern supply chain software.

Additionally, many organizations are recognizing that supply chain software can be an asset to their customer service. Because supply chain software allows companies to check in real-time the status of their orders, their inventory, and their deliveries, they can give exact and up-to-date information to customers who inquire about the status of their orders. This more exact system is a vast improvement from the mostly guesswork companies used to have to do in order to answer customer questions.

Supply chain software can also been an asset in the logistics field. Not only can the software help coordinate transportation for goods and finished products, but it can also help manage warehouse inventory and distribution centers. This benefit can not only save the businesses and the vendors money on shipping but can also shave the time off of delivery.

To take advantage of those and the other benefits of supply chain software, companies must be willing to foot the costly bill that goes with implementing the technology. The combined costs of the software, the hardware, the consultations, and the training for some companies could cost millions to put in place. Even though that amount of expenditure may seem high when the economy is in uncertain waters, companies who have completed the implementation successfully are generally pleased with the effects it has had on their bottom lines.

Essentially, supply chain software works because it tightens the connections between the business and the vendors. This relationship is one of the most important a company can foster because both parties are interdependent. When the company begins to suffer, the vendor can expect a loss of business and revenue as well. Likewise, when the company is running smoothly and doing well, the vendor will benefit from more orders and more profit.

Despite the high price tag of implementation, supply chain software has the potential to bring numerous cost-saving benefits to almost any large company. These benefits will definitely outweigh the initial expense in the long run.

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