How can supply chain issues impact small businesses?
Supply chains are designed to allow products to move from one point to another. Most companies have experienced disruptions in their supply chains by the inflation rate and pandemic in 2022. This has had significant negative effects on their businesses.
Large corporations can mitigate supply chain problems by buying cargo ships and monopolizing ports. However, small businesses will need to find alternative ways to navigate the supply chains in 2022.
A survey done by CNBC in late 2021 found that 58% of small-business owners reported disruptions to their supply chains, while 75% suffered inflated prices due to disruptions to their supply chains.
Although the current economic crisis and disruptions to supply chains will not be resolved soon, small businesses can still grow and profit by using supply chain management solutions.
Small Businesses Need Supply Chain Solutions
What is SCM Software?
Supply chain management (SCM) software allows businesses to monitor and improve their internal supply chains to meet consumer demands. SCM software assists businesses in the design, development, and delivery of goods or services.
Software solutions for supply chain management can also be used to help companies advertise to new customers and communicate with their existing customers. This will allow them to gain a competitive edge in their industry.
These are the five functions of SCM that businesses often outsource.
- The first function is purchasing. This includes procuring raw materials and other resources that are needed to make goods.
- Operations: The second function in supply chain management is planning and forecasting. This includes inventory management and production as well as shipping.
- Logistics: Logistics is the function that coordinates the storage and transport of goods to ensure that they arrive on time.
- Resource Management: This is the part of SCM that allocates resources to execute orders.
- Information workflows: Next in SCM is information workflows. This is where data and information related to logistics are exchanged among internal and external partners.
SCM software facilitates the efficient execution of all or some five functions in the supply chain.
Also read: Digital Supply Chain: Definition, Important, and Risks
What are the Advantages of SCM?
SCM software allows small businesses to operate efficiently while maximizing productivity. SCM software offers many benefits, including cost savings, better distribution, and better information flow.
Cost savings
SCM gives small business owners the tools to reduce costs and identify errors in supply chains.
A clear understanding of what isn’t working will allow the business to make improvements and save money. SCM tools can be used by businesses to cut overhead costs and improve expense management.
SCM software allows business leaders and managers to manage inventory and raw materials, and reduce costs that could negatively impact profits. Profits increase when excess inventory is reduced or certain materials are converted to “on-demand”.
Distribution improved
SCM software can also help small businesses improve their distribution processes. The software can provide real-time information about supply availability and shippers, thereby improving distribution efficiency between consumers and providers.
Business owners can minimize the risk of running out of products or materials by conducting a thorough analysis.
SCM contributes to this efficiency by alerting to areas that cause delays at distribution centers. This allows product deliveries to take place on time.
Improved information flow
Supplier management and customer interaction are essential to increase sales. A good supply chain management program can facilitate real-time communication between your customers and vendors. This software can help increase sales by eliminating missed opportunities and satisfying customers.
Customers can use SCM software to instantly access information regarding pending orders or shipments. You can also securely store the contact information of your customers on all platforms to minimize the risk of a security breach.
What are the Types of SCM Software?
There are many types of SCM software available, including programs with multiple functions and programs that only focus on one aspect of a supply chain.
Business owners need to understand the differences between supply chain management software before they can decide which one is best for them.
Order processing platforms
Product fulfillment is only possible if orders are processed efficiently. Automating order processing, fulfillment, and billing saves time. Comprehensive order processing software minimizes errors, improves the visibility of orders, manages product returns, and eliminates the need for manual purchase orders or invoicing. These solutions enable businesses to digitize their entire order process.
Inventory management
supply chain software solutions that are best for small businesses include inventory management. They give small businesses the ability to automate production with planning, scheduling, forecasting, warehousing, and warehousing. It can analyze your supply chain demand and help you to mitigate any disruptions.
Shipment optimization
SCM software can be used by businesses to track their shipments across different carriers and countries. To improve risk management, the more sophisticated shipping optimization tools offer real-time updates to shippers throughout the shipping process. The software can be customized to meet specific requirements and distances.
Also read: How Machine Learning Can Improve Supply Chain Management Efficiency
Choosing the Right SCM for Small Business
Software that manages supply chain operations is designed to optimize efficiency. However, it takes planning and research to find the right software. For business owners who are interested in learning how SCM tools impact their company, there are many great resources online.
Small business owners can meet their SCM needs using a single enterprise resource management system. Others find cost-effective solutions by using specialized SCM tools.
By analyzing the business needs of each company, small business owners can speed up the process of selecting the right SCM software.
Supply chain planning tools are designed to target customers with different scheduling and capacities. To identify the key features of SCM software, you must first outline your business and your customer. Then, determine your project management requirements.
To help you select software that will strengthen your strengths, it is a good idea to also look at areas where your business could be improved, such as sustainability, communication, profit, and so on.
What is the SCM Software Cost?
Costs for supply chain software solutions can vary depending on the software chosen and your business requirements.
When it comes to finances and when to invest additional funds, business owners must make important decisions. Small business owners must consider the return on investment when calculating the cost of SCM software.
- Can the software be used to help your organization reach its growth projections?
- Is the SCM able to reduce storage costs for raw materials?
- What business processes need more attention?
- The software will increase sales and help the business retain customers.
Many small business owners are in a position to look into external financing options after assessing the business needs and the cost of SCM software. There are many financing options available for upgrading existing SCM and ERP systems or rolling out new software platforms. These include a business line of credit or term loan.
Top 4 Supply Chain Software Solutions
Many supply chain software solutions are available for small businesses. Some of these offer extensive tools for medium-sized to small businesses. We’ve narrowed the selection to four of the most effective supply chain management software for growing businesses.
1. NetSuite
NetSuite’s supply-chain management solutions allow small businesses to manage the flow of products and materials from suppliers to manufacturers to customers.
NetSuite’s unique procurement capabilities allow suppliers to connect to maximize accuracy throughout the entire purchasing process. The software then integrates customer demand management, inventory management and transportation management to efficiently execute production. NetSuite also includes routing and work orders to ensure that consumer goods are delivered on time.
NetSuite by Oracle is a top-rated SCM software solution. It helps small businesses increase their profits by reducing traditional distribution planning costs and offers flexible pricing options.
Annual license fees are available to users of the platform for software-as-a-service (SAAS). This includes a core platform, optional modules, and a number of licensed users. Many small business owners can finance implementation using funds that are already in their budgets or by applying for a small-business loan.
2. Oracle WMS
Warehouse management systems (WMSs) give visibility to inventory and supply chain management. Small businesses have an important asset in inventory. It contributes to their bottom line, profit, and loss. Calculating inventory turnover can help business owners make better purchasing decisions.
Oracle WMS includes features that allow small businesses to find new sales channels, lower inventory costs, and integrate and automate warehouse operations. Because of its flexibility and access via mobile, Oracle WMS is a top choice for SCM software. Oracle WMS features are beneficial to small businesses that focus on eCommerce and retail, wholesale distributors, manufacturers, and consumers.
Also read: What is SAP Business Warehouse (SAP BW)
3. SAP SCM
SAP SCM is a software company that provides solutions for warehouse and supply chain management. This software can handle large quantities of inventory and shipping requirements. SAP SCM is a logistic software solution that streamlines tracking, reporting stock management, rotation, billing, and sales.
SAP SCM works best for medium-sized to large businesses, but the automation features, notifications, and real-time visibility make SAP a top choice for small businesses. Each business’s pricing is different depending on which features and modules are selected.
4. Odoo
Odoo provides SCM planning software that can be used with multiple business applications. The supply chain management modules include customer relationship management software (CRM), manufacturing, inventory, and accounting functions. This software is cutting-edge in automation and warehouse management. It saves small businesses time and money by providing total traceability and order management.
Because Odoo is flexible, it makes the top 10 list of SCM software. The software can be customized to suit the needs of any business, regardless of size or budget. Odoo offers monthly subscriptions that allow you to charge per user.
Bottom line
Small business owners around the world are affected by supply chain issues. Although delays and disruptions can’t be avoided, there are steps businesses can take to reduce the negative impact on their business. Small businesses can maximize their efficiency by using SCM software. This is especially true for those who want to optimize warehouse management and demand forecasting.
