Supply chain management software allows suppliers and customers to share information, track materials, and maintain inventory levels. There are two types of software: enterprise and dedicated. Effective use of this software results in fewer production stoppages and delays, and suppliers are motivated to keep stocks at the correct levels.
Supply chain management software is a class of software that allows suppliers and customers to share information through an ongoing computer program. This type of software is found in the manufacturing sector but can also be used in the distribution sector. The main purpose of this type of software is to track materials in a shared manufacturing or assembly process.
The first part of the supply chain begins with the handling of raw materials. When the materials are received, the supplier updates the system with the details of the materials. As materials are used and products are created, they are tracked in supply chain management software. The system is updated at fixed points in the process, even at the end of the process.
There are two types of supply chain management software products: enterprise and dedicated. A business system has connections to forms and data regarding financial, human resources, procurement and material aspects of the process. A dedicated system has no links to other systems and works completely independently. To share information with other software tools, you need custom programs to extract data for analysis or to update other systems.
In many manufacturing companies, supply chain suppliers are an integral part of the process. Using a supply chain management software product, each individual supplier can access data on the current state of the production process. The data provided to the supplier includes inventory levels, number of units in production and units in quality control.
Through this type of software, each member of the supply chain maintains control and accountability of inventory levels. Most companies that use supply chain management software build productivity and performance into the supplier contract. The supplier is charged for any production stoppages caused by problems with stock or inventory. Payment is often tied to finished products passing quality control, which encourages both high quality and timely delivery.
Effective use of supply chain software has resulted in fewer production stoppages and delays due to inventory issues. By providing direct access to the system, data is exchanged immediately, reducing delays and communication problems. Suppliers are integrated into the process and are highly motivated to ensure stocks are kept at the correct levels, to the benefit of all. This information is also used during contract negotiations, which can be of benefit to the customer or the supplier, depending on the performance.
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