What Are Supply Chain Management Systems?

Written by Scott Wilson

What are supply chain management systems? Supply chain management systems are the overall collection of software, processes, and positions that keep materials and products flowing through an organization. Many SCM systems extend beyond the organization itself, connecting customers, suppliers, and other vendors throughout the supply chain.

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A supply chain management system, commonly just called an SCM in the industry, is a set of tools and processes used to keep logistics and operations on track.

Frequently, these systems are part of larger management systems. Those large, integrated systems are frequently called enterprise resource planning, or ERP, systems. They collect, store, and distribute data from all the various branches of an organization, from accounting to HR.

In a sense, an ERP system is a supply chain for organizational data, procuring, processing, and delivering information to internal consumers.

The word system is almost always used today to refer to computers and the programs they run. And it’s true that since the 1980s, the introduction of computers to business management has moved this set of processes into software.

But a supply chain management system encompasses a lot more than just software tools, though. It also includes the concepts and people who are responsible for executing them.

Today’s supply chain management systems are hugely complex pieces of software and processes. Learning how to use them is a significant challenge in itself. Learning to use them to achieve a competitive advantage in managing the supply chain is a career goal for many logistics pros.

Systems Emerge to Govern Operations for Every Business Function, Supply Chains Included

evolution of aiSystems are organizational tools that humans have been developing for as long as we could communicate. In many cases, they simply evolved as individuals found ways to accomplish goals and cooperate. But in the modern world, systems are thoughtfully designed and planned by specialists long before being put in place.

In supply chain management, those specialists hold degrees in logistics and supply chain management.

Systems theory is a science in its own right. While there are degrees in systems theory, they are by themselves too abstract for supply chain management purposes. Fortunately, a degree in supply chain management brings both detailed logistics industry knowledge and basic systems thinking together in one package.

Sophisticated Computer Programs Help Manage Most Supply Chain Systems Today

Supply chain management systems today are usually built around supply chain management software.

Whether a single, stand-alone package, a comprehensive SCM program, or a set of modules in a larger ERP system, these are immense software systems that require specialists to manage. Supply chain managers work with information technology professionals and programmers to keep them running.

They are often clustered around the essential supply chain functions, with modules or programs such as:

These modules often overlap supply chain and other business functions, such as sales, HR, or finance. And they feed into systems that serve larger organizational goals, such as business intelligence and analytics.

Outside providers are often part of a company’s overall supply chain management system, and often have access to the tools and information available in that system.

As technology changes, so do these systems.

Tomorrow’s supply chain management system will incorporate artificial intelligence features to offload human decision-making; it will chew data from vast sensor arrays built by the Internet of Things; it’s likely to handle automation of everything from packaging machines to self-driving semis.

Supply Chain Management Degrees Offer Everything You Need to Know About Supply Chain Management Systems

A college education in the ins and outs of the supply chain and modern logistics is essential for effective supply chain management system use. While the system itself offers information and controls, it’s missing something vital: understanding.

An education in SCM covers all the important functions and how they need to connect:

Knowing how all the pieces fit together is essential for making sense of the data coming out of an SCM. It also shows the path to using the system to troubleshoot supply chain snags, optimize efficiency, and assure quality.

Equally important is the kind of critical thinking skills needed to understand information and control systems. These are complex processes. They are almost impossible to understand without a deep background in logic, management theory, and even human psychology.

On top of extensive coursework in how and why supply chains work, these degrees often include classes that go over specific tools and software used in supply chain management systems.

Undergraduate certificates earned alongside bachelor’s degrees in fields like business or even engineering, as well as post-bachelor’s graduate certificates, are also an option. Consisting of only a handful of courses focused on a specific set of topics, supply chain management certificates can be a great way to cultivate knowledge of SCM systems.

Professional Certifications Demonstrate an Understanding of Supply Chain Management Systems

As with other important parts of supply chain management, systems are a focus for various professional certifications offered by software vendors and industry organizations.

Certifications are real-world evaluations of skill and knowledge that assure employers that candidates have the qualifications to handle SCM systems through the verification of experience and education.

Of course, understanding the big picture of the supply chain system is an objective of the heavy hitters in certification. Certs like the Certified Professional in Supply Management (CPSM)® from ISM (Institute for Supply Management®) or the Certified Supply Chain Professional (CSCP) from ASCM (Association for Supply Chain Management) are signs of a master-level perspective on every element of the chain. And certs like the Six Sigma Black Belt develop big-picture understanding of concepts and processes crucial to supply chain systems.

That’s exactly the kind of understanding needed to fuel systems-thinking about multiple, simultaneous, interconnected operations.

Some supply chain management software systems also come with their own certification options. Oracle and SAP, both major ERP systems providers, offer various certifications specific to their systems. The Oracle Procurement Cloud Certification and the SAP Certified Application, Development, and Technology Associate Certifications demonstrate mastery of the specific systems platforms they offer.

Anyone who can engage in systems thinking already has a leg up when looking at supply chain management. An understanding of how all the pieces move, and the impacts that small adjustments can have is exactly what organizations look for in senior supply chain managers. A command of SCM systems is a clear advantage for anyone hoping to climb to the top jobs in the field.