How ERP, WMS, TMS, GTM and other supply chain management applications are helping companies tackle current supply chain problems and plan for better resiliency in the future.
The global pandemic, labor shortages, rising freight rates and other forces pushed companies to rethink their supply chain management approaches in 2021. “Supply chain management (SCM) rose to the top as a way to cure at least some of these woes,” Logistics Management points out in Supply Chain Management (SCM) Software Update: SCM keeps the supply chain wheels turning.
Charged with managing the flow of goods, data and finances from raw material to final delivery, these solutions include (but aren’t limited to) enterprise resource planning (ERP), warehouse management (WMS), transportation management (TMS), global trade management (GTM), procurement management and other applications.
Supply chain control towers and visibility platforms are also a part of SCM, a group of supply chain applications that’s been expanding and advancing right along with the complexities of supply chains themselves.
Tracking SCM Trends
In an era where disruptions and labor shortages have become the norm, demand for SCM is on the rise. In many cases, supply chain visibility—that ability to see where anything is at any time and from anywhere—is the end game for the organizations that invest in it. Here are some of the trends that Logistics Management is tracking in the SCM space in 2022:
- The more visibility, the better. “The biggest thing everyone wants is better, more actionable visibility earlier,” Terri Hiskey, VP, SCM and manufacturing product marketing at Oracle, told the publication. “What we saw in 2021 was that even if companies felt like they had that visibility, it wasn’t accessible early enough for them to take action or do anything about it.” For example, a company may receive alerts that its imported cargo is entering a particularly busy ocean port on a certain day, but by the time it gets that information it may be already too late to pivot. “If the ship was already in port, there was no way to just back it up and move it somewhere else.”
- Consumers are concerned. These and other points of frustration have directly affected end customers, many of whom have come to appreciate the value of a smooth-running supply chain and the technology that supports it. According to an Oracle survey from September 2021, 87% of Americans were negatively affected by supply chain delays and disruptions, with worries over delivery delays, product shortages and heightened disruptions topping their list of concerns.
- Wall Street has a newfound love for supply chain technology. End customers aren’t the only ones to gain a better understanding of supply chains over the last two years. Wall Street has also taken notice and put logistics and supply chain applications squarely in its sights in recent months. According to the Wall Street Journal, investors are literally “piling” into supply chain technology, with some of the 2021’s target investments involving e-commerce fulfillment specialist ShipBob Inc., digital warehouse and distribution provider Stord Inc., and Flock Freight, a platform that matches shipper loads to trucks. “Backers including big investment funds are pumping money into logistics technology at a rapid pace,” WSJ reports, “driving up valuations for digital-focused ventures across freight, delivery and warehousing.”
- Supply chain visibility is still a distant dream for many. Gartner’s Koray Köse tells Logistics Management that supply chain visibility gaps remain a big problem for many companies. For example, he says that 50% of organizations have visibility into about 90% of their tier 1 suppliers, and that those percentages drop significantly for tier 2, tier 3 and beyond. And, only 8% of companies are familiar with 25% of the suppliers that they contract with on an ad hoc basis. “If you ask a supply chain organization whether it knows a specific supplier, there’s a 75% chance that the answer is ‘no,’” Köse states. “This means many companies out there are flying blind and it gets worse when you start talking about tier 2 and tier 3 vendors.”
Logistics Management says that while many companies want more analytics, AI and ML from their SCM software, others are still trying to replace their manual, spreadsheet and paper-based approaches with more automated, technology-based systems. Credit the current labor shortage—which precludes many firms from simply hiring more people to fill empty seats—with driving some of this momentum.