So, your small to mid-sized business (SMB) is still slogging along with an inefficient manual supply chain. You know that managing it with paper printouts, emails, phone calls, and Excel is costing you time and money. Or maybe you’ve cobbled together some antiquated systems that have your supply chain running on one cylinder.
At the same time, you’re skeptical that modern supply chain management (SCM) software is the answer. After all, isn’t SCM built for big companies? Isn’t it too costly and complex, packed with features that an SMB neither wants nor needs? Wouldn’t you need a small army of IT geeks to get it up and running?
The answer to those questions is, in a word, no. Recent years have brought a new wave of business digitization (as is evident by Target’s recent acquisition of Shipt) and technological simplicity that puts a faster, more cost-efficient supply chain within easy reach of SMB manufacturers, distributors, logistics providers, and retailers.
As we enter 2018, it’s high time for SMBs to take action on making the digital supply chain a reality. Every day you wait, your competitors are making moves to digitally transform their supply chain and deliver the speed, affordability, transparency and service that customers expect in our digital age.
What could you expect from moving to a digital supply chain and automating processes such as order fulfillment, inventory management, supplier sourcing, warehouse management, logistics and demand planning? Over my 25 years in the industry, I’ve seen four main benefits unfold: cost, speed, insights, and customer satisfaction.
Cost, Speed, Insights, Customer Satisfaction
Costs are reduced as you eliminate manual work, whether it’s paper-based purchase orders or double-data entry into disparate desktop applications. Speed accelerates across the supply chain lifecycle - from sourcing to customer service. You have new insights and visibility to optimize operations, from shortening lead times to maintaining minimum stock levels.
And finally, customer satisfaction increases. Today, that’s a moving target as B2B customers increasingly expect a consumer-like experience from supply chain partners. And it’s perhaps the #1 reason why SMBs need to move aggressively to digitize supply chain operations.
If you’re gearing up for supply chain modernization, I’ll be blunt — don’t even think about an on-premise solution. In-house servers and software will punish you with high capital costs, and you’ll face the ongoing ordeal of IT maintenance and upgrades.
Cloud SCM is the way to go. Now fully mature after more than a decade, cloud SCM solutions dramatically lower the barrier to entry for SMBs while providing superior data access and operational agility. Let me share a few tried-and-true best practices I’ve observed many SMBs follow when assessing and deploying a new supply chain solution:
Benchmark your pain points. Too many SMBs write off supply chain inefficiency as a “cost of doing business.” Instead, survey your supply chain personnel and quantify how much time and effort goes into routine and ad hoc tasks. Reach out to some top customers and partners for feedback on where you could improve. Estimate the time and cost you could save by streamlining operations.
Understand the SCM market. Just like buying a house, you want to apply thorough due diligence when sizing up prospective SCM vendors. Sites like G2 Crowd, TrustRadius, Software Advice, and Capterra can be useful for user reviews. Time that you invest in understanding capabilities, checking references and devising the right questions to ask will pay off in the long run.
Meet today’s needs — and tomorrow’s. If you’re planning to grow the business, be sure your SCM software can grow with you. Maybe you desperately need a better way to run the warehouse today, but will you want demand forecasting and EDI in two years? The last thing you want to do is rip and replace software down the road because you went with a solution that couldn’t flex and scale with your growth.
Take an incremental approach. In your initial rollout, focus on quick-win, high-payback initiatives that attack your biggest pain points. Then build on those successes and lessons learned to apply SCM automation and analytics in other areas. Also, be prepared for resistance among users who might want to stick with “the devil we know.” Devise a strategy to encourage fast adoption and better collaboration.
From a supply chain perspective, it’s no exaggeration to say that the future of the business is on the line for many SMBs. Inefficiencies will only become magnified as the world moves at a breakneck pace to a digital future. Make 2018 the year you modernize your supply chain to protect and grow your competitive advantage.