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July 21, 2023

How to de-risk your supply chain software decision

As supply chains return to normal, businesses can use supply chain assessment tools to ensure their software selection meets all their future needs.

The COVID pandemic shook the global supply chain from top to bottom. Businesses struggled with disruptions, delays and stockouts, while customers watched prices climb and products disappear from shelves and showrooms. According to one study, 94% of Fortune 1000 companies experienced supply chain disruptions during the pandemic.

Now, almost three rollercoaster years later, supply chains are slowly getting back in sync, giving enterprises a renewed motivation to make these systems more resilient, collaborative and networked. A large part of this effort will require replacing or upgrading their supply chain software. But first, businesses will have to navigate the maze of options. Making the right software choice will ensure the supply chain is resilient despite whatever risk may come next.

We advise businesses to use a supply chain assessment tool to determine which supply chain software will meet their specific needs. Using these tools, organizations can evaluate a holistic set of criteria that pertains to the business itself, as well as IT, data security and the executive leadership team to optimize operations, mitigate risk and improve sustainability. Doing so will lead to reduced costs, improved overall efficiency and higher customer satisfaction.

Avoiding the pitfalls

The supply chain software market has grown significantly over the past decade. Businesses of all sizes and industries can now choose from an overwhelming number of platforms, from warehouse management systems to supply chain planning systems. While having such an abundance of options can be beneficial, it can also make the selection process both difficult and risky.

For example, using a platform that is incompatible or unsuitable for a particular business can lead to a wide range of problems, from system and application incompatibilities, to data inconsistencies, delays and miscommunications.

Supply chain software whose features don’t align with an organization’s needs can interfere with important functions such as inventory management, order processing and shipping, as well as other essential parts of the supply chain. If additional investments, customizations or workarounds are needed, this can raise costs and diminish return on investment.

Scalability and security are additional concerns. A software solution needs to be able to keep up with a business’s plans for expansion, and must meet security and compliance requirements to protect sensitive data and avoid legal issues. Otherwise, it may create legal issues and put sensitive data and systems at risk of hacking and cyber-attacks.

It’s also crucial to ensure the software produces reliable data so the business can make informed supply chain decisions. Otherwise, the software could end up negatively impacting short- and long-term planning, leading to incorrect stock levels and missed delivery dates. Businesses can avoid those scenarios by ensuring they have adequate and accurate information on the capabilities and functionality of planning platforms, as well as the vendor’s history of customer support, ability to meet deployment deadlines and record of successful implementations.

Benefits of a supply chain assessment tool

Supply chain assessment tools are designed to help businesses avoid these pitfalls. These tools provide a comprehensive, unbiased perspective on the available software options.

These tools enable businesses to examine criteria such as critical features and functionalities, vendor capabilities, implementation requirements and total cost of ownership, enabling them to achieve alignment within the organization and make data-driven decisions on their software selection. Managers can identify key performance indicators such as improved delivery times, order fulfillment rates and inventory accuracy that are important to tracking and measuring the benefits of these software decisions.

With the right supply chain software, businesses can streamline processes, reduce manual labor and eliminate unnecessary steps. By using an assessment tool to ensure the software aligns with their business and operational needs, businesses can increase efficiency, accelerate time to market and reduce costs. Organizations are then free to invest in other areas such as marketing or research and development.

The benefits extend all the way to the end of the supply chain. Businesses armed with real-time updates on order status, tracking information and delivery times are better able to avoid stockouts and increase customer satisfaction.

Facing any challenge ahead

Enterprises need to be ready to face the supply chain challenges of today and whatever surprises the future may bring. That’s why it’s vital to have a comprehensive mechanism to evaluate different supply chain platforms. Use a supply chain assessment tool to choose wisely and ensure a resilient and adaptable supply chain for years to come.

Magesh Karthik

Head of Supply Chain Planning

Magesh Karthik

Leading a practice of strong functional and technical planning consultants, Magesh Karthik is a seasoned supply chain leader at Cognizant, with vast experience in mergers and acquisitions, enterprise digital strategy and transformation.

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