3 Steps to Modernizing Your Supply Chain

April 26, 2022

Issues in the global supply chain have affected us all in many ways. For many manufacturers, this has meant a reworking of purchasing, ordering, or forecasting. One of the issues that exacerbated the supply chain problem was legacy Supply Chain Management (SCM) software or manual tracking. Some of these legacy SCM systems are so old that their own provider is pulling its support for the product.

With the strains on the global supply chain starting to break, innovative companies around the world have started implementing next-generation systems to help them improve decision-making with better data, analytics, and other forms of automation.

Modernizing your internal systems is one of the things you can do to improve the resiliency and efficiency of the impact you have on the supply chain. However, like all major system upgrades, this takes time and money. A proper implementation plan is required, along with executive buy-in, for the modernization effort to be adopted successfully.

You can improve the outcome with these three factors: business process mapping that leads to an implementation plant, improved vendor selection, and an eye for a system that is future-ready. Furthermore, your firm should be ready for the organizational change and upskilling that will be required from this shift.

Picking New Supply Chain Software

As mentioned, the first part of the process is understanding that your current legacy systems are not going to be enough. Spreadsheets alone haven’t been enough for decades and while many still use SAP APO to manage their supply chain, this is a 20+ year old program that is being sunset by SAP within the next 5 years.

Of course, your SCM software has been in play for a long time at your firm. It wasn’t cheap to implement and everyone is quite familiar with its quirks. This brings up the issues keeping you where you are:

• Implementation costs – Purchasing a subscription for a new software package is the easy part. The time and training required to implement the new system is often the biggest concern. At some point though, you are throwing good money after bad by keeping the old model.
• Too many choices – Technology is both a blessing and a curse. There is a glut of choice. How can you know that your choice is the best one? In this, you should look for a partner, not just a vendor. A company that understands your industry, the trends, and the best processes to implement with the system that maximize your potential.
• Bells and whistles – Another thing to be wary of is over-selling. Yes, you want your new system to add automation and be future-ready, but do you really need to pay for that now or can you implement a base model and add features later? Or perhaps your new SCM has innovation as a core principle, so you know that whatever the future holds, your new system will provide when you need it.

Better Implementation and Adoption

To start, you need to layout the plan for the purchase. This means:

• Understanding where you are lacking
• What your ideal system looks like
• What you can change in your processes for the better with a new system
• What KPI you will use to measure success

This will give you an idea of what you need and what you can look to improve with your new system.

You may be concerned about a new system adoption. There will be issues with the implementation. If you look online, you will find an almost endless list of poorly implemented SCM systems that fail, or fail to deliver. They are over budget, over time, or under-performing. These implementation issues, however, can be avoided with the above steps as part of smart project management and proactive leadership.

Better Choices

With the roadmap helping you improve your implementation success rate you can now start looking for your partner in software. The search process can be broken down in three parts:

• Business requirements – Ready a list of requirements that covers your must-haves and includes a list of nice-to-have features.
• Evaluation criteria – Setup a way to evaluate your must-have features in comparison to the vendors software and how it can meld with your current or updated business processes.
• Use cases – Have a few example scenarios ready so the vendors can show you how their software will handle your issues. Your cases should include a high priority example and common problem areas where you need help. This will give you a better idea of how your processes will work within their package.

You can also include frontline employees in your evaluations so you can get a better perspective of how this will impact daily operations.

Better Bells

While a standalone SCM can fulfill your supply chain needs, or a plug-in for an existing ERP system, look for an all-in-one system that is built from the ground up to tie all your business units together and can maximize your productivity with Lean thinking. Your new SCM, or ERP with an SCM module should be a future-ready system that is constantly evolving with new technology.

Conclusion

While replacing any system can be a stressful time for a company, preparing for the choice and selecting an ERP that is ready to evolve with you can boost your producitivty and profits while helps to avoid future supply chain woes.

Agree/ Disagree? Tell us what you think below!