Business owners who source globally can use technology to overcome distance, time zones and other obstacles that make managing global supply chains challenging.
Systems that handle order management, tracking, warehouse management and transportation optimization can all help businesses improve performance and reliability across global supply chains.
Cost increases have been a significant issue for supply chains. According to the State of Logistics Report issued in 2018 by the Council of Supply Chain Management Professionals, total U.S. business logistics costs rose 6.2 percent in 2017 to $1.5 trillion.
Along with price hikes from major package delivery services, businesses had to deal with issues ranging from customer demand for shorter delivery times to a shortage of truck drivers.
To deal with the pressures, businesses are turning to supply chain management technology.
Key Global Supply Chain Management Tech
"Businesses exploring technology for managing global supply chains should look first at their order management systems," says Suman Sarkar, a supply chain management consultant and author of The Supply Chain Revolution.
“Having a good order management system is the first step," Sarkar says.
Simplicity and customer-friendliness are the primary concerns here. Sarkar points to the ease of ordering on Amazon as an example of an easy-to-use order management system.
“Make it extremely easy to get the orders," he says.
After the order is taken, a distributor or manufacturer might connect its order management systems to a warehouse management system that tells business managers where products are so they can deliver the order.
The technology you choose depends on your size and the kind of customer you're dealing with.
—Buck Devashish, chief commercial officer, MP Objects
Bar codes, radio frequency identification tags, scanners and readers and similar tracking technologies play key roles here. They provide data to tell precisely where in the supply chain individual products and lots are located.
"Even the smallest e-commerce company can employ technology to print accurate labels," says Buck Devashish, chief commercial officer for MP Objects, a cloud platform for digital order management and supply chain orchestration with offices in Boston.
“Having a good clean label makes a box seem more professional and ensures accuracy of delivery," Devashish says.
Computerized shipping and tracking systems use tracking data to reduce errors while helping to streamline supply chains and reduce costs. For instance, Devashish says, shippers can use supply chain orchestration platforms to combine small shipments into one to save on shipping costs.
Route management systems help companies devise the most efficient ways to physically reach customers, such as on a delivery route. Network optimization software can help locate warehouses and distribution centers that are close to customers and convenient to production centers.
"After it helps deliver the product to the customer, supply chain management technology can also help a business work with its suppliers," Sarkar says. This may take the form of connecting the supplier's information systems with your own to make it easier for the supplier to give you what you need, when you need it.
“You want to ensure your suppliers can work with you in a very effective way," Sarkar says. “You should be able to provide the operational information back to your suppliers so they know when to drop it off at your store."
Larger suppliers, similar to larger customers, are likely to have their own supply chain management systems. Small and medium-sized firms selling to or buying from these businesses may have little choice but to do it the bigger company's way.
Supply chain management systems, software and platforms emphasize interoperability, however. Sarkar says systems typically come with application programming interfaces, or APIs, that simplify working with other systems.
“You may have to get a little help doing the programming," Sarkar says. “But there are lots of off-the-shelf technologies available, which lets you get capability very similar to what a large company would have."
Making Supply Chain Management Work for You
These days, managers of global supply chains rely heavily on technology to keep everything working smoothly.
“If you're in this business you have an inventory management system connected to a transportation system which is connected to a warehouse management system," says Rick Blasgen, president and CEO of the Council of Supply Chain Management Professionals, an education and certification group based in Lombard, Illinois.
“There are lots of tools out there that are easy and flexible," Blasgen says. “And there are tools that can be implemented at a not-overwhelming price."
Many shipping and tracking systems are based in the cloud and use a Software as a Service (SaaS) model, so small companies can purchase only the services they need.
Supply chain management experts caution business owners against technology for technology's sake.
“The technology you choose depends on your size and the kind of customer you're dealing with," Devashish says.
For instance, he says, a major retailer will want a specific kind of label that provides tracking features so the customer can know where the item is all the time. A consumer customer, on the other hand, may be more impressed by a label that makes return shipping easy in case the produce doesn't satisfy.
Sarkar emphasizes that designing the supply system to serve customer needs should take precedence over selecting supply chain management technology.
“Once you have the right design," he says, “technology makes it easier to do the work."
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