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Supply Chain Management Software Implementation Best Practices


Project Management

A Project Sponsor needs to be appointed and may likely be the same person who sponsored the supply chain software selection. The Project Sponsor should be a senior Supply Chain Management executive, or possibly another related business executive. The executive sponsor will have responsibility for selecting and overseeing the Project Manager (PM), allocating resources, approving deliverables, coordinating with other executives, and maintaining relationships with all key stakeholders - who may include trading partners, SCM partners, 3PLs and the supply chain software vendor.

The Project Manager must have the skills to lead cross departmental teams, work with executives of all business areas and have experience in implementing Supply Chain Management software projects. If this person is not on staff and available full time for the project, a consultant should be engaged to manage the project. It is important NOT to select a Project Manager based solely on PMP certification. While formal project management knowledge is helpful, direct and relevant experience implementing supply chain software systems is an absolute critical success factor.

Because most project team members are not versed with modern supply chain software systems, and generally unaware of the new capabilities that could provide value, it's a recognized supply chain best practice to begin the deployment with a thorough overview or light training of the business software before jumping into actual software deployment. The goal here is to stimulate new thinking, and not just redeploy old processes into a new system.

To insure that the key stakeholders are in agreement with the objectives, scope and implementation plan, the project charter from the software selection process should be reviewed in detail and updated, or a new charter developed for the implementation project.

It's extremely important to determine, document and allocate roles and responsibilities at the beginning of the supply chain implementation effort. Another supply chain software implementation best practice is to firmly identify the responsibilities and resources of the supply chain vendor. The vendor should provide a seasoned project manager to manage all vendor resources and tasks, an Account Manager to keep the lines of communication open (particularly at the executive levels), subject matter experts (SME) to provide early guidance and initial implementation decisions (that often have long-term impact), experienced deployment consultants and skilled developers to make requested modifications to their systems.

Once the team along with roles and responsibilities are in place, the team can start work on defining the project deliverables.

Project Deliverables

Sales & Operational Planning (S&OP)

Supply chain software project deliverables include the policies, procedures and systems to evaluate and make judgments on the sales forecast, supply plans and the impact to the financial plans. The business software should facilitate the analysis, planning and reporting for the monthly executive meeting to approve the plan. Other considerations include the reconciliation of the approved S&OP plan with the detail sales and supply plans. As the S&OP plan is being executed, there should be a process for capturing feedback for future planning periods.

Demand Management

Islands of analysis result in different departments working from different plans. By consolidating planning with accountability for delivering "One Version of the Truth", then everyone is working from the same playbook. To facilitate a central consolidated planning structure, the planning software will need the ability to model and recast plans based on different needs. Other considerations are the coordination and collaboration with marketing, supply management and other stakeholders.

Specific project deliverables include the following:

Demand Forecasting – Includes systems and procedures for capturing demand, defining forecasting models, forecasting structure, forecasting time horizons and periods, and interfacing to the sales forecast.

Sales Forecasting – Includes systems to recast and calibrate the demand forecast into a sales forecast based on internal and external demand drives, and a process to incorporate judgments from the S&OP producing the final sales forecast.

Planning Demand Shaping – This offers the analysis and planning tools to assist the Sales and Marketing Departments to evaluate options to shape and align demand with the sales forecast.

Demand Fulfillment – Includes systems to evaluate current demand needs and prioritize orders to fill and stock locations to replenish.

Supply Management

A primary challenge is in developing processes and configuring supply chain software to effectively manage the supply of goods and materials that achieve the desired financial and service level benchmarks. This includes coordinating plans for the efficient flow of products and information to meet demand requirements.

Specific project deliverables include the following:

Supply Network Planning (SNP) – SNP is a mid-to-long term planning tool that integrates inventory management, distribution and transportation. The planning component helps design and model supply networks, including cost, constraints, lead times and risks. Features should include sourcing and capacity optimizations (based on targeted benchmarks), good visual graphical tools, and what-if analysis.

Distribution Planning – This includes planning tools to optimize inventory strategies to support the S&OP plans. It also includes detailed planning of product mix and inventory positioning.

Replenishment – Includes features to support inventory requirements for demand and sales orders. Requirements include the ability to analyze the gaps between supply and sales, initiate purchase orders and maintain inventory levels.

Procurement – A marketing and financial based tool that includes bid, contracts and catalog management, along with planning tools to align sourcing with demand and manage PO processing.

Relationship Management

Project deliverables include planning and management tools for supporting trading partner segmentation strategies. Other system deliverables include trading partner collaboration, vendor compliance, contract management and trading partner value tracking. A lot of these functionalities rely in part on ERP and CRM systems.

Warehouse Management Systems

Because of interfaces with trading partners, Warehouse Management Systems (WMS) require special consideration. Even though the exchange of data between trading partners is based on industry standards, key trading partners should participate in the design and end to end testing.

The big implementation decisions include functionality for cross dock (flow through), central stock inventory, value added services, seasonal and temporary facilities, which tasks need automation, and which types of auto identification to support.

Implementation considerations also include:

  • Appointment Scheduling
  • Yard Management
  • Planning and Processing Inbound Trainers
  • Processing Outbound Deliveries
  • Quality Management Policies
  • Policies and Procedures for Returns

Transportation Management System

Project deliverables depend on the use of private fleet versus 3PLs. Both options need the systems to plan, facilitate and coordinate logistics with trading partners that operate in different time-zones. Also, TMS must have the ability to track multi-modal inbound and outbound deliveries, optimize trailer loads and optimize transportation routing. Companies that operate a private fleet will want to implement driver and asset management features.


It is important to have visibility as a project deliverable. Therefore a determination can be made on who needs access to the different types of information, how long data needs be kept before purging, the types of reporting that is needed and what system resources IT needs to deploy.

A visibility strategy should address real time execution needs (such as visibility to product flow, exception handling and constraints) and access to short term, midterm and long term plans.

Once an information strategy is defined, the team should work with the vendor’s SMEs and IT on how best to implement the strategy.

Shared Services

Shared Services are made up of the databases, business rules, process flows and web services that are common to all applications, such as managing customers, suppliers and product profiles. It is important that the project team develops the shared services specifications, and not outsource this task to the supply chain software vendor. There are many factors not always on the vendor’s radar including interfaces to other systems, initial populating of files with data, developing policies and procedures, and building custom applications. While the supply chain software vendor may assist with these efforts, primary responsibility remains with the company.

Supply Chain Software Implementation Steps

Whether your pursue a waterfall or agile supply chain software methodology, you're likely to proceed through the following steps.

Build—This step uses the CRP to model the many business processes and determine the best supply chain software configurations. A best practice is to use actual company data, not fictitious or demo data, when modeling your business processes in the CRP. Although the specifications are relatively complete at this point, the stakeholders need to stay actively engaged in crafting the end solution. The challenge for the Project Manager is producing an SCM system that meets stakeholder objectives while avoiding scope creep.

Testing—The supply chain software CRP will need unit and regression testing at regular milestones. Another supply chain best practice is to test and validate your data early in the implementation process. Few companies recognize their poor data quality before they incur the testing, and testing will determine if your data is incomplete, duplicative, missing required fields, missing foreign key fields or otherwise requires cleansing before import to the new system. If your IT department does not have a QA Manager that can be dedicated to the project full time, a consultant should be hired early on in the project. Before going live, robust testing with trading partners should be conducted. If key trading partners are involved early on, they will be prepared and will understand the need for testing.

Training— Old habits are hard to break! Prior to implementing a new supply chain system, user and IT training are critical and should include all affected users. A supply chain software best practice is to hold successive types of training. Begin with Train the Trainer training, then move to classroom training and then perform individual or small group hands-on training. It is hard to quantify the confusion that users deal with on the first week or two upon going live. SMEs should be available for the first few weeks to answer questions and help learn the new software. To save on travel costs, training can be scheduled at your site or at least in your city. Most vendors will accommodate onsite training. Training on new policies, procedures and new SCM concepts is important and can be facilitated by Human Resources (HR).

Documentation—SME experts should document policies and procedures. The Project Manager should review, update and archive the project documents in an online location where they are accessible.

Next - Supply Chain Software Optimization Best Practices >>

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