As your business grows, you supply chain software will need to expand. You may opt to organize your business into an independent third-party logistics provider (3PL), or you may want to purchase software for tracking, monitoring, and processing all of your needs. No matter which direction you choose, supply chain software comes riddled with opportunities for confusion, demise, and incapability. Before selecting a representative’s offering of the best, most recently updated software, evaluate this guide from Software Advice and consider the implications of each of these five potential pitfalls we outlay below in selecting software.
5 Pitfalls of Supply Chain Software Selection
#1: Don’t Go For ERP Software First.
ERP software offers unprecedented capabilities within one centralized location. However, some ERP systems may have extensive costs, which would easily outweigh the purchasing price of individual Warehouse Management Systems (WMSs) and Supply Chain Management (SCM) suites. Additionally, some ERP systems may not contain all of the functionality found within lower-level Transportation Management Systems (TMSs). True, ERP systems allow for fast integration across a variety of platforms and routinely offer web-based accessibility and use. However, you must factor in the cost of purchasing an ERP system and compare it to the cost of purchasing an individual TMS, or SCM system.
ERP software used to be designed primarily for manufacturers, but solutions targeted at distributors, retailers, and logistics providers are now hitting the market. Such systems include manufacturing, CRM and HR modules that may not be appropriate or even necessary for your organization.
We recommend exploring best-of-breed options first; ERP should only be considered if you determine that a collection of best-of-breed applications will still leave major gaps in the functionality that you need. That said, our research shows that many ERP systems do offer features for logistics providers such as 3PL billing and value-added services processing. More sophisticated logistics providers known as 4PLs, who completely manage the supply chain for a client’s product (including sales and order management), may want to explore full-blown ERP solutions.
#2: Create a List of Features You Need.
Often, the chaos of the supply chain and managing orders, manufacturing, and shipments reaches a critical point, where time is of the essence. Unfortunately, a rash decision to purchase one type of supply chain software over another will result in anguish. This pitfall is most easily avoided by creating a list of the things you need the software to accomplish. Ask yourself the following questions:
- Do I need accounting and billing within the software?
- Will I be using parcel carriers?
- Will my clients want to have access to the software?
- How will the software benefit my inventory control measures?
- Do you need value-added services processing?
- Do you have an existing custom labeling software, or does it need to be included with the new supply chain software?
- Will the software monitor my assembly processes?
- How will the software mesh with my current data through kitting.
Once you have written out detailed answers to each of these questions, create a list of features you need or want. It’s better to err on the side of caution and select as many features as you feel will be of value in the future. For example, inflation will result in price increases in the future years, so today’s supply chain software purchase represents an investment towards ensuring your business’s future.
#3: Check For Multi-Client and Multi-Location Capabilities.
Depending on the individual type of software, you may be limited on how effectively it manages multi-client and multi-location operations. The software you select needs to have the ability to manage inventory across multiple client relationships. Furthermore, most business owners do not select software that only manages fewer than 10 clients. However, you may opt for a single-client WMS if each warehouse serves one client. Now, some may argue the use of cloud-based software eliminates the need for a multi-client platform. However, the cloud simply refers to where the information is stored, and without the multi-client capabilities, information within the cloud will still function as a single client platform.
#4: Does the TMS Solution Offer SCM Features?
When looking for software to manage your transportation system, you may find yourself stuck between multiple venues with different capabilities. Fortunately, Cerasis offers fully integrated TMS software with all of the features of SCM software suite through our robust integration capabilities. This eliminates the need to purchase or hire development resources as the integration should go with the supply chain software purchase while improving your productivity and streamlining your shipping processes. As mentioned earlier, the features within the respective TMS solution need to align with the features you need.
#5: Where Does Visibility Fall on Your List of Needs?
Perhaps the gravest concern of selecting supply chain software boils down to compliance and risk management. As a business owner, you need to ensure all applicable local, state, federal, and international laws are upheld throughout your organization. As part of your risk management program, you have probably installed a means of ensuring visibility. When you select a web-based platform, you essentially expand the number of persons viewing your processes to any available, authorized Internet connection. Furthermore, this enhances your credibility and allows new consumers to potentially connect with your business, which is essential in the interconnected market of the global economy. Within our previous blog posts, we have discussed the issue of visibility in great detail, and it should rank within the top five features you need in your software.
At Cerasis, we offer multiple technology solutions for the supply chain to meet your unique business needs, and we want to help you sort through the confusion. Do not be tempted to purchase from a fly-by-night organization in the hopes of gaining savings on software purchases. In addition to these possible pitfalls in selecting a supply chain software solution, you need service after the sale. What happens if the software suddenly fails? Do you have a reliable way of getting it back on track and operating? This is where Cerasis comes into play and excels past the competition. Selecting the right software today will prepare you for the future, make sure you do not fall victim to watchdog groups, and keep your business operating at maximum efficiency.