A supply chain management tool is any device, concept, or system that is used to help oversee, control, and improve the flow of goods and services through the supply chain. In practice, it almost always refers to software applications that serve certain key functions:
- Order processing and tracking tools
- Inventory management
- Specialized freight handling equipment
- Supplier and customer relationship management tools
- Automated warehouse systems
- Bid and purchasing management tools
- Analytics tools
A tool is an item that extends the ability of an individual to perform work. We use tools to make tasks easier; we use tools to make other tools.
In the supply chain world, picking and learning to use the best set of applications is what distinguishes successful companies from those running on the brink of failure.
Over time, a variety of different kinds of supply chain management applications have been adapted, invented, and evolved into the extremely capable toolset used in every industry today.
What Are the Different Types of Supply Chain Management Tools?
It’s important to find and use applications that are fit for purpose. That is, a tool that is most efficient at performing the work that the supply chain organization needs to accomplish.
For supply chain managers, that means applications that help them achieve their primary functions:
To this end, today’s sophisticated software tools fall into these categories:
A supply chain organization may start off the cycle by using a Request For Proposal (RFP) generation tool to kick out specs and evaluate responses from suppliers. An application that builds contracts may be next, with cryptographically secure e-signature tools to sign and execute them. Then the materials are procured would go into an inventory management system… and so on, all through the supply chain, every piece of the process is served by the right application.
Many of the above toolsets are wrapped up into a larger package of software called an Enterprise Resource Planning (ERP) package.
ERP systems are enormously flexible and far-reaching tools. They take in far more than just supply chain data and functions. Instead, like the label says, they deal with every factor of resource allocation and strategic planning that a business relies on.
They are so complex that you often need special tools to work with ERP systems. With different modules for many supply chain and corporate management jobs, there is an ecosystem of vendors and supply chain management consultants whose business it is to select the right ERP package for a given organization and implement it successfully.
In Skilled Hands, Supply Chain Management Software Tools Can Be Limitless
Software tools used in supply chain management aren’t always an unqualified success. Applications are rarely perfect.
This is where education and human expertise comes in. While SCM software tools can be highly capable in their own right, it takes some real world experience and on-the-ground know-how to get the most out of them. A broad understanding of logistics and supply chain operations is essential, as are creative thinking and problem-solving skills.
In fact, the most valuable tool in supply chain management may be the human mind.
Degrees in supply chain and logistics management cultivate the ability to reason through challenges and use the appropriate applications for the job. Just as important, those degrees introduce students to many of the most common and useful applications in the field.
On-site experience through internships and other cooperative projects offers a glimpse of how those tools are used in the real-world. And it can spark ideas about how to be more effective and develop even better tools in the long-term.