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9 Benefits of SCM Software That Will Boost Your Profits

Benefits of SCM software are related broadly to how data-driven decisions and automation improve supply chain management. In times of digital transformation, choosing SCM solution is actually a must.

The popularity of SCM software is the answer to a changing global economy. For many businesses, supply chains have become extremely complex. Manual tracking and management are now less efficient and prone to errors.

In short, when investing in supply chain management software, you can significantly improve the flow of finances, products, in addition to enhancing collaboration.

Let’s take a closer look at the benefits related to these three areas.

Benefits of SCM software: Improved financial flow

1. Costs reduction

A question of how to effectively reduce costs of running a business while avoiding adverse effects is in all likelihood widely queried across industries. One of the main benefits of SCM software is that it allows you to spot and eliminate wastes and costs, without actually changing the way your business operates.

In an SCM tool, you can track each step of a supply chain, find errors and processes that are inefficient, and improve on them. Think of it more like fixing a broken part instead of replacing it.

2. Overhead costs reduction

After reducing the costs of inefficient processes, it’s time to manage the expenses better, so you can reduce overhead costs.

With SCM software, you can better manage raw materials or inventory. This newfound advantage allows you the opportunity to assess which of these are crucial to your business, and which ones lower your profits, as the demand for them is not as high as you thought it is.

3. Profit growth

With the knowledge of what expenses to cut-back, or where to focus your investments on reducing overhead costs, you can substantially increase your business profits.

What’s great, is you haven’t even started to implement new solutions to achieve that! With SCM solution, you can begin with assessing processes and expenses first, adjust them, and build up from there.

Improved product flow

4. Improved product quality

By knowing the availability of raw materials or inventory, you can better coordinate supplies, shipments, amongst other things. This way, you ensure a higher efficiency rate, as you won’t find yourself suddenly going out-of-stock, for example.

Having effective supply chain management processes in place also improves product quality. This is because with the increased efficiency rate, you increase the speed at which you optimise your business to accommodate for changing needs.

5. Data-driven SCM

What’s important, is that with supply chain management software, you can use data you would have missed otherwise.

For example, the higher efficiency rate I just mentioned is possible with real-time insights. Having these insights can be challenging without a tool that makes it easy to capture and translate the data in a way that’s comprehensive for you and your team.

6. Decreased delays

Finally, SCM solutions improve product flow by minimising delays. With a real-time overview of the whole supply chain process, you can spot slowdowns and errors to reduce late shipments.

Even if the demand grows, or there is a problem with supplies, you can get notified about any issue early on and act accordingly to solve the problem.

Improved collaboration flow

7. Improved collaboration

Improved information flow based on real-time data is crucial for better cooperation. This is true to your relationships with both clients and vendors. Sharing information within your company, with clients and your business partners can significantly increase your sales, reducing the number of missed sales opportunities.

Customers, on the other hand, want constant access to information about their shipments. Enabling them with an SCM solution may lead to a higher retention rate, as many happy customers may come back and buy from you again.

8. Communication improvements

When working with different vendors and customers, you may sometimes find it challenging to communicate. Large quantities of and including incomplete information may lead to miscommunication, which can lower client sentiment, resulting in lost sales opportunities.

By improving communication at your company, you can improve customer service and, again, the retention rate.

9. Improved security and trust

SCM software is also a more secure way to store customers’ contact information. Investing in security pays off, as data breaches may harm your company’s trust and reputation. As these are hard to regain, focus on securing the data you manage – right away.

Investing in SCM software

As you can see, there are numerous benefits of SCM software. Each can impact your company’s processes, finances, and even reputation.

If you’re willing to take the next step and invest in an SCM solution at your business, there are two main possibilities:

  • You can implement an existing, out-of-the-box solution 
  • Or you can invest in bespoke SCM software, developed specifically for your company.

Both ways are valid solutions depending on your needs, your company size, goals and business objectives. As they differ mostly in price, you also must consider how they will impact your growth.

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With Microsoft technologies related since 2005. He graduated from the Computer Science Faculty of the Bialystok University of Technology where he was the leader of the .NET Group and the Microsoft Student Partner. Four times finalist of the national stage of the Imagine Cup competition, and later the mentor and the jury member of the contest. Co-founder of the Bialystok .NET Group. He lectured .NET development at the Bialystok University of Technology. Microsoft MVP in the Client Application Development category in 2008-2010, when he actively participated in the IT community. Constant new technology enthusiast and IT consultant.