Order processing, warehouse management, transportation – for companies, the seamless coordination of a supply chain across different platforms is a complex task. A supply chain management system that allows logistics processes to be controlled centrally is certainly helpful. However, careful planning and integration are required in order to benefit from the advantages of centralized processing. In this article, we explain which SCM systems and platform solutions are available and discuss the steps that are necessary in order to manage a smooth and efficient supply chain.
SCM system and platform solutions: What’s the difference?
Companies that want to digitally set up and streamline their logistics processes are increasingly relying on platform solutions and integrative SCM systems. While transactions take place and operational business is processed on the digital platforms, SCM systems enable the strategic control and management of various operational processes.
SCM systems – managing and optimizing the entire supply chain
SCM systems are used to manage and optimize various aspects of a supply chain. Companies can choose from different types of systems. Which software solution is best suited for a company’s respective needs depends on various factors, such as the size of the company, the industry, the business model or the business objectives:
- Self-developed software: Large companies in particular tend to use self-developed SCM software that is tailored to their individual needs. The entire life cycle of supply chain management can be covered and order processing, warehouse management, delivery and product returns can be integrated. However, the internal costs and time required for development, maintenance and servicing are correspondingly high.
- Third-party software: If you don’t want to develop your own SCM software, you can fall back on offers from third-party providers. Third-party software supports and automates selected logistics processes. Solutions from SupplyX, for instance, include various functions such as demand forecasting, inventory management and transport optimization. E-commerce companies use flexible third-party software for their sales and trading activities. There is also third-party software that can be seamlessly integrated into other systems and supports order processing and shipment tracking, for example.
- Cloud-based SCM systems: Solutions such as AWS, Microsoft Azure or Google Cloud offer scalable environments for SCM that enable companies to add or reduce resources as required. By subscribing to cloud solutions, the management of hardware and software can be outsourced to the provider. With data centralization, demand forecasting, supplier management, logistics optimization, inventory management or real-time transparency, these applications offer various functions to increase efficiency and reduce costs.
- Open source SCM system: Companies generally do not have to pay any license or usage fees for open source SCM software. The software can be flexibly adapted and expanded. Yet, usually it does require more technical expertise and support. Although such systems are a cost-effective alternative to proprietary software, companies should definitely include the aspects of development, maintenance and support in their decision-making process.
- Combined systems: Some companies rely on a combination of different SCM systems to meet their individual requirements. For example, a company may use a cloud-based system for demand planning and an in-house developed system for warehouse management. This approach can also lead to increased costs.
Platform solutions for interaction with partners and customers
Digital platforms that are related to supply chain management and through which companies can offer products or services and interact with customers include:
- Specialized Logistics Platforms: Logistics-related platform solutions aim to manage and execute the transportation of goods more efficiently. They include transportation management, inventory management, warehouse management, supply chain tracking, freight handling and customs clearance, data exchange, analysis and integration, reporting, returns, customer communication and notification, and sustainability compliance. Outsourcing all or part of these aspects to external logistics service providers that offer platforms for these processes ensures greater efficiency and supply chain transparency. For example, SupplyX offers integrated platforms that cover warehousing, order fulfillment and delivery.
- Marketplace Solutions: Large e-commerce providers such as the Otto Group, Amazon or Zalando offer virtual marketplaces where external sellers can offer their products or services. Depending on the marketplace solution, retailers have access to tools and functions for order processing, integrated logistics options or payment processing services.
- Supply Chain Visibility Platforms: Data is collected from various sources, making it possible to track the movement of goods from production to delivery. By means of end-to-end supply chain visibility, companies can gain real-time insights into their entire supply chain.
- Supplier Management Platforms: These platforms help to manage and improve supplier relationships. They include features for evaluating supplier performance, risk management and collaboration with suppliers.
- Warehouse Management Systems (WMS): WMS platforms enable companies to manage their warehouse stocks and processes more efficiently. Important functions include inventory tracking, order processing and storage location optimization.
Other platforms include freight marketplaces, telematics platforms for real-time tracking and customs and export management platforms. It is not uncommon for companies to rely on a combination of different platforms and solutions in order to manage the individual requirements of their supply chain. But how do the colleagues in charge maintain overview and control over the multitude of processes?
Steps for controlling multiple platforms via the SCM system
In order for companies to operate smoothly on different (sales) platforms while maintaining an efficient supply chain, integration between an SCM system and different platforms is key. Orders flow from the platforms into the SCM system in order to manage stock levels, process orders or coordinate deliveries, for example.
The following recommendations for action will help you select the right SCM system and integrate and manage different platforms:
- Managers should choose an SCM system that is highly integratable and flexible and supports data and processes from different platforms.
- It is also important that the SCM system is scalable in order to keep pace with company growth and the addition of further platforms.
- Using APIs, databases, data exchange or middleware, companies can implement seamless data integration between the SCM system and the various platforms. The integration should enable the exchange of orders, inventory data, shipping information and other relevant data.
- To avoid overselling or shortages and enable precise inventory management, the SCM system should provide real-time information about stock levels on all platforms.
- Order acceptance, processing, packaging and dispatching – the more order tasks are automated, the better the SCM system canrecord, coordinate and prioritize orders from all platforms.
- The chosen SCM system should generate cross-platform KPIs and reports that enable managers to identify trends and adapt strategies.
- To ensure consistent customer service, customer data from the various platforms should be integrated into the SCM system. Customer satisfaction can be increased by processing inquiries more efficiently.
Combined with various platforms, an SCM system offers real-time transparency across the entire supply chain process. This enables companies to react immediately to changes in demand, inventory or delivery conditions and to avoid bottlenecks, overselling or delays.
Additional services included: The SCM system as a control center
In order to make the customer experience as positive and seamless as possible, many platforms offer included additional services that pay off, especially in digital commerce:
- Free shipping plus various shipping options,
- fast deliveries,
- Product ratings,
- personalized recommendations for customers based on their search history and purchases,
- free returns,
- Points systems and loyalty programs or
- Vouchers and gift packaging.
Here too, the SCM system plays a key role in integrating the above-mentioned aspects into an efficient and smooth supply chain. For example, data on a customer’s shipping preference can be used to display particularly fast or free shipping options. Product reviews and returns data are used to identify quality improvements in the supply chain. Personalized recommendations based on inventory data and customer behavior are used to show customers only relevant products and services that match their interests and buying habits. This not only increases customer satisfaction, but also the conversion rate. The SCM system thus acts as a control center that integrates the platforms’ additional services into a company’s supply chain strategy in order to ensure an optimized user experience and increase its own efficiency and competitiveness.
Conclusion: The integration of SCM system and platforms is a powerful combination
The SCM system is used to manage and optimize the operational processes, while the platforms provide the digital starting point and interfaces through which customers can order products and companies can market content. Together, they form a powerful combination for business processing: the SCM system can be seamlessly integrated with the platforms used to facilitate sales and order processing on the various platforms. This gives companies a centralized overview and control of their entire supply chain, regardless of how many different sales or logistics platforms they use. Thus, a better coordination of operations is enabled. It maximizes opportunities for growth and success in an increasingly digitalized business world.