Supply chain management technology once reserved for large enterprises now increasingly sports price points and setup requirements suited to small and medium-sized companies.
The time is ripe for business owners to increase efficiency and performance through improved supply chain management with the help of technology.
The best applications of supply chain management technology use data to better match supply with customer needs.
“Information is king in supply chain management," says Michael Gravier, a professor at Bryant University in Smithfield, Rhode Island.
“Almost all the up-and-coming technologies for managing supply chains focus on gathering, processing, sharing and otherwise using information as a replacement for inventory," Gravier continues, "everything from RFID tags to ERP software to cloud data and 3D printing."
Goods in transit, stored in warehouses or shelved in stores generate growing mounds of data from RFID tags and scanners, Bluetooth devices, computer vision and other sources, notes Nicholas Finill. (Finill is the senior analyst of intelligent supply chain with New York-based research firm ABI Research.)
“But unless all this data can be effectively processed, analyzed and communicated to supply chain operators, all of this data is simply noise," he says.
Fortunately, available analytical tools can increasingly turn what might otherwise be noise into useful inventory management information.
“Thanks largely to [artificial intelligence]-driven software platforms, inventory management is being able to support more complex supply chain functions such as demand planning, optimization and supply chain management generally," Finill says.
Pricing Obstacles
Cost presents the major hurdle keeping small and medium-sized companies from deploying advanced supply chain management technology.
“Small companies will certainly be priced out of certain technology solutions from some of the best-of-breed vendors." Finill says. “And certain capabilities like full-scale warehouse automation will likely not be viable for SMBs.
"But," he continues, "with so many supply chain and inventory management technologies maturing rapidly, there are vast vendor ecosystems that can cater to companies of all sizes."
The emergence of scalable, affordable, cloud-hosted software-as-a-service enterprise resource planning and warehouse management system platforms has put sophisticated capabilities within reach of many more businesses. David Crist, president of Brother Mobile Systems, advises smaller firms to start by deciding first which platform they'll use.
“They need to be very comfortable with the software they choose and how their operations are configured," Crist says.
Establishing where major operational bottlenecks and visibility gaps are in the supply chain is the first step. From there companies can start looking at which technologies can solve these problems.
—Nicholas Finill, senior analyst, ABI Research
Small firms may get guidance from larger customers or suppliers on the most suitable supply chain management platform, he says.
“Once you get that foundation established, you start talking about the necessities to hang off that software system," Crist adds.
These technologies include scanners, readers and other data capture devices as well as outputs including printed labels and barcodes.
“Those are the things to complete a solution that can be relatively simple to implement and can get done quickly and won't break the bank," Crist says.
Making Supply Chain Management Tech Work for You
Gravier sees edge computing—analyzing data from smartphones, personal computers, sensors and other sources near customers—and 3D printing as supply chain technologies well-suited to smaller firms.
“Because the most powerful advantage of small and medium-sized businesses is their proximity to the customer," he says. “And the fastest way to fulfill customer needs will be the strategic deployment of 3D printers."
While the rapid evolution supply chain technology presents a challenge to business owners focused on day-to-day operations, plenty of help exists to aid anybody willing to learn, Finill says.
“Small companies can also have an advantage when it comes to adopting technologies due to the generally lower complexity of existing systems, allowing them to be more agile and generate returns more quickly while being flexible," he adds.
Getting Started
For small firms looking to apply advanced supply chain management technology, Finill suggests finding pain points.
“Establishing where major operational bottlenecks and visibility gaps are in the supply chain is the first step. From there companies can start looking at which technologies can solve these problems," Finill says.
Sizable improvement opportunities likely exist. Crist guesses that only around half of smaller firms have moved from obsolete supply chain management practices to significantly automate supply chain management.
“I wouldn't say they're still using clipboards and sticky notes, but it's one level above that," he says.
Given the gap between what they could do and what they are doing, supply chain management technology presents an appealing opportunity for small firms seeking competitive advantage through better inventory practices.
“If you're a small-business owner, consider small steps toward using more technology to at least manage inventory," Gravier says. “That will be fundamental to adopting future technologies as their costs come down."
The good news is that advanced supply chain management technology today is more affordable, capable, scalable and easy to use than ever.
“Now is a great time to be exploring how technologies can transform the supply chain of a small business," Finill says.
Read more articles on operations.
Photo: Getty Images