Why Supply Chain Management Software Helps Reach Lean Manufacturing Objectives

The proper use of supply chain management software can dramatically reduce waste and make almost any business operate more profitably. The key lies in properly using the software to reach your lean objectives.

Before the internet, companies had to rely on spotty information to predict demand from their customers and try to make their own supply chains operate effectively. All that changed with the universally accepted standards and ease of access on the internet.

In a perfect business world, customers, suppliers and companies would all be connected in a flowing integration of supply and demand information. Of course, the world is not perfect and the networking of all the players is not so easily accomplished.

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Nevertheless, it is entirely possible to achieve a very workable level of cooperation among all these players. All that is needed is appropriate supply chain management software and a high level of trust among all the participants.

Many businesses have a long history of distrust that might even go back centuries, which makes it all the more difficult. Yet these schisms can be overcome once everyone sees the benefit of cooperation and trust. Often companies begin in a small manner and then, once the process is fully functioning, expand into other areas of supply and demand. It is easier to demonstrate the advantages to a potentially adversarial business once there is a proven track record.

Some larger companies, such as Wal-Mart, not only recommend, but demand that the suppliers share information, otherwise there is no deal to be done at all! It can be a bit of a bully tactic, but when you are that powerful it is hard to argue.

The benefits of sharing information is that the practice known as just-in-time manufacturing can be implemented. This control of inventory and raw materials greatly reduces overhead and keeps costs down. Obviously, if you are not producing and storing excess goods you will be saving money.

Learning curve for management

One of the quirks about supply chain management software is that, by nature, it requires human intervention for the first few months after it is set up. This is because the software is unable to know the past history and nature of the company.

The software does what it is supposed to do, but it cannot know what has happened in the past, therefore it is very prone to making erroneous decisions in the beginning. This is actually to be expected, but not everyone involved is aware of this twist, which makes for a very cynical and distrustful workforce.

Management must educate and inform everyone involved about this phenomena, otherwise it is certain that nobody will trust the new software and they will revert to what they know works. It takes a few months of tweaking and intervention to get on a new playing field.

Another problem with using this type of software is the fact that globalization has changed the face of business forever. What works in the US or Europe may very well not work at all in China, for example. It can be very difficult to integrate such a program due to language, culture and even a poor internet connection and adequate bandwidth.

Lean manufacturing is an integrated approach to business, a culture change. Supply chain management software is just one link in the lean chain. Other links include 5S, Six Sigma, Value Stream Mapping and Kaizen.

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