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Part - II

What does supply chain management software do?

Supply chain management software is possibly the most fractured group of software applications on the planet. Each of the five major supply chain steps previously outlined composes dozens of specific tasks, many of which have their own specific software. There are some large vendors that have attempted to assemble many of these different chunks of software together under a single roof, but no one has a complete package. Integrating the different software pieces together can be a nightmare. Perhaps the best way to think about supply chain software is to separate it into software that helps you plan the supply chain and software that helps you execute the supply chain steps themselves.

Supply chain planning (SCP) software uses fancy math algorithms to help you improve the flow and efficiency of the supply chain and reduce inventory. SCP is entirely dependent upon information for its accuracy. If you're a manufacturer of consumer packaged goods for example, don't expect your planning applications to be very accurate if you can't feed them accurate, up-to-date information about customer orders from your retail customers, sales data from your retailer customers' stores, manufacturing capacity and delivery capability. There are planning applications available for all five of the major supply chain steps previously listed. Arguably the most valuable (and complex and prone to error) is demand planning, which determines how much product you will make to satisfy your different customers' demands.

Supply chain execution (SCE) software is intended to automate the different steps of the supply chain. This could be as simple as electronically routing orders from your manufacturing plants to your suppliers for the stuff you need to make your products.

Do I need to have ERP software before I install supply chain software?

This is a very controversial subject. You may need ERP if you plan to install SCP applications because they are reliant upon the kind of information that is stored in the most quantity inside ERP software. Theoretically you could assemble the information you need to feed the SCP applications from legacy systems (for most companies this means Excel spreadsheets spread out all over the place), but it can be nightmarish to try to get that information flowing on a fast, reliable basis from all the areas of the company. ERP is the battering ram that integrates all that information together in a single application, and SCP applications benefit from having a single major source to go to for up-to-date information. Most CIOs who have tried to install SCP applications say they are glad they did ERP first. They call the ERP projects "putting your information house in order." Of course, ERP is expensive and difficult, so you may want to explore ways to feed your SCP applications the information they need without doing ERP first.

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Source: The Net