Supply Chain Management Modules: A Comprehensive Guide

In the world of supply chain management, speed and accuracy are everything. The slightest disruption can throw a well-oiled SCM operation into disarray. But never fear. The right combination of supply chain modules can keep your operation agile.

Before you jump into the SCM software market, you’ll need a list of must-have requirements your business needs to succeed. Our comprehensive list of the most popular modules can jumpstart your selection process.

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Article Roadmap

• Key Requirements and Features
  • Logistics and Transportation
  • Inventory Management
  • Purchase Order Management
  • Warehouse Labor Management
  • Supply Chain Planning
  • Procurement
  • Supply Chain Analytics
  • Integrations
  • Warehouse Management
  • Supplier Management
• Purchasing Considerations
• Selecting the Right SCM Module
• Next Steps

Key Supply Chain Modules

The following list can help you explore which supply chain modules are crucial to maintaining a resilient and successful operation.

1. Logistics and Transportation

Logistics and transportation are the backbone of supply chains, without which smooth goods movement would be impossible. However, this process requires strategic planning, execution and control of the physical flow of products, information and financial data.

Leveraging transportation and logistics solutions allow organizations to optimize operations, reduce costs, enhance visibility and improve customer service.

2. Inventory Management

This SCM module ensures the right product quantity is available at the right time, place and cost.

You can gain real-time stock-level visibility to boost the customer experience and fulfill orders promptly. Inventory management tools also allow you to control and minimize carrying costs like storage and insurance expenses.

They align production schedules, procurement activities and inventory levels with anticipated demand to optimize inventory investments and prevent excess or insufficient stock situations.

• Low Stock Report
• Inventory Control
• Serial Number Tracking
• Cycle Count
• First-In, First-Out (FIFO)
• Backorder Management
• Returns Management
• Last-In, First-Out (LIFO)

3. Purchase Order Management

This element provides a structured framework for procurement processes. It helps streamline ordering by standardizing purchase order format and content.

The solution helps validate and verify order details like item descriptions, quantities, prices, delivery dates, and terms and conditions. Rules like automatic approvals optimize the overall purchase order approval workflow.

Track purchase orders and their associated delivery schedules to anticipate inventory needs, manage stock levels and align procurement activities. With this process, you can facilitate efficient inventory management and reduce stockouts or excess inventory situations.

• Direct Spending
• E-Procurement
• Financial Supply Chain Management
• Intelligent Spend
• Buying and Invoicing

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4. Warehouse Labor Management

Warehouse labor management systems can strengthen workforce planning and maximize productivity to close the gap between teams and high-performing employees.

Workers can compare planned and actual work duration, like indirect labor, value-added services, physical inventory and quality inspection documents, and more.

Employ workforce planning to avoid under-staffing and adjust labor allocation to ensure workers meet their performance goals.

• Workforce Management
• Planning and Forecasting
• Record Direct and Indirect Labor Activity
• Shift Scheduling

5. Supply Chain Planning

The best supply chain planning (SCP) practices allow organizations to meet operational challenges and optimize factors affecting the supply chain.

Effective planning minimizes inventory carrying costs, reduces transportation expenses and optimizes production, leading to cost savings. Organizations can anticipate and mitigate potential risks and disruptions to ensure operations continuity.

Advanced models like AI and machine learning can analyze historical sales data, market trends, customer behavior and other external factors to generate more accurate demand forecasts.

• Demand Planning and Forecasting
• Multi-Location Supply Planning
• Production Scheduling
• Sales and Operations Planning (S&OP)
• Order Planning
• Inventory Optimization
• Projected Inventory Levels

6. Procurement

Employ procurement software to minimize costs, maximize organizational value and facilitate better sourcing decisions.

Effective supplier selection allows you to establish strong relationships, ensure timely delivery and reduce disruption risks. It can contribute to risk management by diversifying supplier sources, implementing contingency plans and ensuring business continuity.

• Contract Creation
• Three-Way Invoice Matching
• Manual/Automatic Receipt Creation
• Stock Transfers
• Approval Reminders
• Bid Management
• RFQ Creation

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7. Supply Chain Analytics

Analytics provides insights and data-driven intelligence for strategic decision-making within the supply chain. You can track metrics and KPIs to measure supply chain performance like order cycle time, on-time delivery and inventory turnover.

Supply chain analytics also help you evaluate different scenarios, assess potential changes or disruptions, and guide strategic initiatives (network design, sourcing strategies and capacity planning).

Supply chain modules like analytics let you collect, integrate and analyze data from multiple sources to improve supply chain performance.

For example, a retail company wants to optimize its inventory management and ensure sufficient stock availability while minimizing carrying costs. It can leverage supply chain analytics to analyze historical sales data, market trends and other relevant factors to make informed decisions.

• Custom Reports
• Custom Dashboards
• Replenishment Planning Analytics
• Purchase Order Tracking
• Inventory Optimization Analytics
• Labor Utilization Dashboard
• Procure-To-Pay Analytics
• Demand Forecast Simulations
• End-To-End Supply Chain Visualizations

8. Integrations

Integration with multiple platforms like enterprise resource planning, warehouse, transportation and customer relationship management systems supports seamless data flow across different solutions. It eliminates the need for manual data entry to ensure data consistency and accuracy.

Seamless integration with other platforms provides end-to-end supply chain visibility. You can track and monitor goods, services and information movement from origin to consumption.

Integrating functions like production schedules, inventory data and transportation plans help optimize resource allocation, minimize bottlenecks and ensure timely product delivery.

• API Access
• Accounting, CRM, ERP and eCommerce Software Integration
• iPaaS and Middleware Software Integration
• Logistics and Shipping Software Integration

9. Warehouse Management

Warehouse management lets you manage efficient warehouse and inventory operations, boost productivity, enhance order fulfillment processes and more.

Track and record product information like lot or serial numbers, expiration dates and other relevant details to meet compliance requirements. Access real-time inventory information to prevent stockouts, overstock situations and record inaccuracies.

Improve end-to-end visibility by integrating with inventory, transportation and order management systems.

Adopt better resource planning to predict labor requirements and equipment utilization.

10. Supplier Management

Supplier management systems facilitate and streamline various supplier relationship management activities.

Create, store and track supplier contracts. Other functionalities include contract authoring, version control and automated notifications for contract renewals or expirations.

Mitigate supplier-related risks by monitoring financial stability, quality issues, capacity constraints and geopolitical factors.

• Spend Analysis
• Supplier Portal
• Vendor Performance Tracking
• Reverse Auctions
• Purchase Contracts Management
• Supplier Risk Management

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Purchasing Considerations

Determining which supply chain solution will best fit your business needs involves more than just understanding core modules and how those can impact your operations.

You need to curate a list of requirements and ask vendors how they will meet them. Consider the following questions to ensure you’ve made the right decision.

What functions do we need?

Deciding which functions you’ll need depends on your current business goals and objectives.

You might find vendors that will cater to your needs but at the expense of high pricing. Our free comparison matrix lets you evaluate and compare top vendors in the market and see which options meet your unique requirements.

How compatible is the integration process with our existing system?

Compatibility will vary based on various factors, such as the specific supply chain system you currently use and the capabilities and flexibility of the new system you plan to integrate.

However, you can consider factors like integration options, data mapping, system architecture, customization and configuration, integration complexity, vendor support, security and compliance before choosing.

Is the vendor reliable?

Vendor reliability is crucial and requires in-depth research. You need to dig deep before shortlisting. You can start by looking into the vendor’s reputation and tracking their record in the industry.

Check for testimonials, case studies, client base and the duration they’ve been in business. You can also request references and reach out to their past customers and inquire about their overall experience.

Determine if the vendor holds any certifications or compliance with recognized standards relevant to supply chain management. Supply chain modules often involve handling sensitive information, so evaluating the vendor’s security and data privacy is important.

What’s our budget?

Benchmarking the budget will depend on organizational needs. You can begin by clearly defining the requirements most crucial to business success. Research the market to gain insights into supply chain modules’ price ranges.

Since there’s always additional pricing added for maintenance, annual upgrades and training, reviewing pricing options like upfront and implementation costs, licensing fees and subscription-based pricing is a wise call.

In addition to upfront costs, consider the total cost of ownership (TCO) over the solution’s lifecycle. You’ll need to evaluate how these costs align with your long-term budget plans.

Is cloud-based or on-premise deployment better for our needs?

Both cloud-based and on-premise deployment options have advantages and considerations. However, the best choice will always depend on your organization’s specific requirements, resources and preferences.

On-premise deployments typically require substantial upfront investments in hardware, software licenses, infrastructure and IT resources. While cloud-based deployments often follow a subscription-based model with lower upfront costs.

In terms of scalability, cloud-based deployments offer more compared to on-premise. They may require additional hardware investments and implementation efforts to accommodate growth.

Does the vendor provide advanced capabilities to support our strategy?

Selecting a vendor who can align with your long-term goals and contribute to the success of your strategic initiatives is a win-win situation for both parties.

You can begin by first articulating your supply chain strategy and objectives. Identify the key areas where you require advanced capabilities like demand forecasting, inventory optimization, supply chain visibility, sustainability and collaborative planning.

Inquire about the vendor product roadmap and future development plans. A vendor committed to supporting advanced capabilities should have a clear vision for innovation and improvements.

Discuss their plans for incorporating emerging technologies like AI, machine learning and blockchain to enhance their solution capabilities. Evaluate whether their roadmap aligns with your strategic vision and requirements.

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Selecting the Right SCM Solution

Selecting the right supply chain management software requires a systematic approach. Our Lean Selection methodology follows nine simple steps that can help you pick the ideal SCM solution with all the modules you need.

1. Establish: Determine your needs and objectives for software evaluation. Identify key stakeholders involved in the process and establish a project team responsible for the evaluation.
2. Collaborate: Engage representatives from different departments and ensure they consider diverse perspectives and requirements.
3. Define: Define different requirements the software should meet. This list includes functional, technical and business requirements. Document the evaluation criteria to ensure consistency and transparency throughout the process.
4. Distribute: Identify potential software options and distribute the evaluation criteria to the shortlisted vendors.
5. Justify: Evaluate the received proposals from the vendors against your defined criteria. Assess how well each software solution aligns with your requirements,
6. Prove: Conduct demonstrations or proof-of-concept (POC) exercises for the shortlisted software solutions.
7. Rank: Rank the solutions based on their alignment with your evaluation criteria and performance during the POC exercises. Consider both qualitative and quantitative factors to assign rankings.
8. Negotiate: Initiate negotiation discussions with the top-ranked software vendors. Discuss pricing, licensing models, implementation support, ongoing maintenance, and customization or integration requirements.
9. Sign: Once you complete the negotiation phase, select the solution that best meets your requirements and aligns with your budget. Finalize the contractual agreements with the chosen vendor, including service-level agreements (SLAs), support terms and timelines.

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Next Steps

Ultimately, selecting SCM modules involves identifying and prioritizing features and functionality that are most important to your company.

Our free requirements template captures all the essential aspects of your supply chain operations. You can evaluate each module based on its importance to your business, considering factors like demand planning, inventory management, supply chain visibility and more.

Which supply chain modules did we miss? Let us know in the comments.