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Distribution Software and Supply Chain Value
In contrast to the narrow view of supply chain management (SCM) that many managers hold, most companies believe that SCM was critical to company success. However, only one in fifty labeled their supply chains 'world-class'. Clearly, there is a disparity here and a lot of room for improvement.

SCM involves three or more entities that are linked through the flow of products, services, money, or information from suppliers to customers. Managing this flow efficiently is what SCM is all about. Supply chain efficiency is viewed as critical because it provides a standardized workflow and eliminates the need to reinvent the wheel each time the company receives an order, fills it, or evaluates a supplier. Also, having a systematic SCM facilitates the use of best practices and knowledge and thus increases a company's chances of long-term success.

There can be pitfalls in implementing SCM. Many non-supply chain managers fail to see the advantages of a well-run supply chain. They also may not understand their role in the success or failure of the company's SCM. For this reason, it is key for managers to gain the support and buy-in of everyone in the organization. Given that most people won't support what they don't understand, education on the nature and scope of SCM is important. Supply chain understanding must transcend organizational boundaries so that managers and team players in disparate yet functional areas often play roles in SCM even if they think they do not play a role. For example, assessing a supplier's technical capabilities requires support from engineers, people who don't usually consider themselves part of a supply chain. In order to gain cross-functional support, several things must occur. Human resources will need to provide the right people with the right skills. Such skills include the ability to take a broad view of the business while taking a process-focused approach to SCM, cost-management skills, and the ability to identify and reduce upstream cost-drivers.

Another element of cross-functional support is proper organizational design. Non-supply chain personnel will need to be cross-trained so as to be able to rapidly deploy their skills to support SCM when needed. Since the seamless flow of information is the lifeblood of SCM, Informational Technology (IT) excellence is also critical. Supply chain systems must be able to share information across functional groups and organizational boundaries in real time or near real time, so upgrades in technology, hardware, software, and skills may be required.

The final link in the chain of support for SCM is the use of metrics with which to gauge degrees of success. Unfortunately, this is not widely realized; few companies have implemented measurement systems from one end of the supply chain to the other. In order to gain the most benefit from SCM, best practices should be used. These include education and training of non-supply chain personnel, the inclusion of functional managers in SCM planning sessions, and working with non-supply chain managers to seek out team players best suited to supporting SCM initiatives. Supply chain managers should also avail themselves of every possible opportunity to convince others of the benefits of a lean, efficient supply chain. By implementing some important supply chain management changes, companies will be on their way to improving the efficiency of operations and boosting profits.



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