sfa
ERP
ERP Search Supply Chain Software Supply Chain Industry Review

Chuck Schaeffer 2014 Supply Chain Management Year End Review
Social CRM Headlines

Social CRM
3.5 stars Average rating: 3.5 (from 29 votes)
By Chuck Schaeffer

The Year That Was 2014 in the Supply Chain Management Software Industry

For my year end blog post I've decided to look back on the supply chain management software industry. Overall, supply chain software continues to become more relevant in the IT portfolio of business software applications. IMHO, the complexity and size of supply chain software is second only to ERP applications and the line between the two continues to blur. There were no major events or shifts in the direction for supply chain software but the momentum does continue to advance SCM applications as more companies address needs to participate in the global market, reduce costs and respond more swiftly to fluid consumer driven demands and similar business changes.

Risk Management Reminders

Natural disasters such as floods, earthquakes and tsunamis continue to impose their wrath on supply chains. Recent disasters remind us of the need for information systems to incorporate risk management features to better understand, plan and mitigate natural and man-made tragedies. High impact risk management preparedness can be aided with software simulation models. To manage common and atypical events, supply chain sub-systems can provide real-time updates on regional and global incidents and facilitate the deployment of contingency plans.

Supply Chain Technology Trends

The last 12 months continued several supply chain software themes from prior years. The advances in SCM application development having a transformative impact include convergence, collaboration and visibility. Convergence is the symbiotic integration of supply chain planning and execution, where planning drives execution and execution feedback becomes the input into real time planning. Collaboration breaks down line of business, trading partner and hierarchical boundaries throughout the value chain to improve planning and optimize SCM processes. Visibility delivers real time, accurate information into the supply chain so decision makers can make better decisions and accurately evaluate performance.

Supply Chain Planning (supply management, demand management, sales & operation planning) and Supply Chain Execution (Inventory Management, Order Management, WMS, TMS) applications continue to get more plugged in to the larger supply chain ecosystem with infrastructures that support information sharing, business rules, process design, workflow automation, user interfaces and business intelligence. IBM with their Smart Commerce, SAP with Netweaver and Oracle with Fusion push their technology boundaries with underlying SOA infrastructures and new (cloud, mobile, social and analytics) technologies to facilitate SCM convergence, collaboration and visibility. The payback is a smaller investment in working capital, higher service levels, shorter lead times, more efficient operations and adaptable systems, all of which contribute to higher margins.

RFID technology has been in the works since the 1960s, but has only now got closer to the inevitable tipping point from peace meal deployments to full scale must have adoption. The hurdles holding back RFID from crossing this chasm include the cost of RFID tags, the initial investment cost, and suppliers incurring the costs while customers realize the savings. By replacing barcodes with RFID tags, warehouses stand to reduce costs and improve efficiencies. The real savings will come from a paradigm shift in business software applications such as CRM, Sales Order Management, Inventory Optimization and other traditional ERP capabilities.

Using RFID, consider new ideas where applications can retrieve inventory information from items that are actually in stock or identify an items physical location, replacing inaccurate record keeping systems. Once RFID technology is imbedded in middleware and treated as an available service to all business systems, then SCM software can facilitate big savings. For example imagine intelligent shopping carts, intelligent passive POS, passive real-time check in/out inventory portals, passive real-time asset tracking, plus many other systems that take humans out of everyday mundane processes.

The Internet of Things (IoT) entered the supply chain lexicon in a big way this year. However, at this point in time it's largely aspirational for most. Nonetheless, as the technology evolves from innovative possibilities to practical solutions it will clearly make its way into the supply chain software suites and day to day operations.

Being a Good Citizen

Green supply chain management continues to get quite a bit of attention. It's now easy to make the argument that being green has the dual benefit of public responsibility and improving bottom-line profits; for example: using electronic processes to reduce paper, using reusable packaging and containers to reduce waste, reducing inventory levels to decrease overhead, and better network planning and trading partner collaboration to reduce empty transportation miles. The good news is that most supply chain software vendors have already addressed many of these needs. Even better, a new frontier in green SCM (and overall cost reduction) is addressing the supply chain ecosystem as a whole, instead of each trading partner focused on reducing their foot print regardless if it increases their trading partners.

SCM Software Industry

SCM software revenues increased this year by what appears to be around 4%—with SAP, Oracle and JDA keeping their top 3 positions in the supply chain software market.

Supply chain software acquisitions were relatively quiet and had little impact on the SCM competitive landscape. Oracle, SAP and other vendor acquisitions were minor, filling gaps in SCM offerings.

Supply chain systems in the cloud continue to show a slow but steady market adoption. Look for accelerated traction for supply chain software in the cloud in the year ahead.

Future of Supply Chain Software

Not only has Supply Chain Management software improved business efficiencies, but SCM software is also improving strategic planning, operations analysis, global trading and B2B relationships. Thanks to innovations in SCM software, many companies are recasting the way they organize and do business. The future of Supply Chain Management is in solidifying the advances already made, keeping up with new business trends and leveraging new disruptive technologies such as cloud, social media, mobility, analytics and the Internet of Things. Another area that looks for improvement is the supply chain ecosystem as a whole. Instead of cost shifting between trading partners, supply chain systems may finally tackle benefits that improve the overall supply chain ecosystem. End

How would you rate this article?   
 

 

Share This Article

 

 

Quote

The future of Supply Chain Management is in solidifying the advances already made, keeping up with new business trends and leveraging new disruptive technologies such as cloud, social media, mobility, analytics and the Internet of Things.

 

Follow Us
social
social
social
social

erp

Home   |  ERP  |  Manufacturing  |  Supply Chain  |  HR Payroll   |  CRM  |  Blog