By Julie Fraser

Are you struggling to get the right product to the right place in the right quantity and quality at the right time and the right cost? Are you finding improving your profits while balancing your inventory a major challenge? In short, is supply chain management an important goal?

I'll bet the answer's a no-brainer: of course. However, finding the right supply chain software is not. Don't expect to unthinkingly choose a "market leader" and hit the return-on-investment (ROI) jackpot. Although supply chain success stories are proliferating, you cannot necessarily copy what others are doing and expect equivalent results. To achieve the major benefits available, each company or division must analyze its business to choose the right supply chain process models and software. And don't expect your enterprise resource planning (ERP) backbone system to be the entire answer. Multi-site ERP capabilities can improve supply chain performance, and adding electronic data interchange can enhance communications accuracy and speed between trading partners. However, we have rarely worked with a company that can meet all of its supply chain needs with an ERP system alone.

That's why there is a wide range of products described as "supply chain software" -- forecasting and demand management, distribution planning, inventory planning, advanced planning and scheduling, transportation planning, warehousing, vendor-managed inventory, point-of-sale data management, electronic catalogs and product configurators. These applications can enable successful supply chain management. The challenge is to determine which software addresses the most pressing business drivers for an operating company.

A few software suppliers have developed integrated suites of software to address the broad supply chain information needs of manufacturers and distributors. Logility (the supply chain planning company just spun-off from American Software) and Manugistics focus strongly on demand planning and replenishment planning, and have recently purchased constraint-based production planning and scheduling companies to round out their suites. Numetrix grew up in production scheduling, and has interesting distribution and transportation capabilities in its product suite. Most of these supply chain management software suites have focused on consumer packaged goods industries. The reason is clear: industry pressure. Anyone who deals with major retail giants, such as Wal-Mart, Kmart, or grocery and drug stores, is being driven to extreme delivery performance and cost improvements.

But what if your products don't end up in a retail store? What if your products are not produced in batches? What if you make products to customer order? In any of these cases, what should supply chain management mean? The answer to that question depends not only on the distribution channels, or even just on the industry. Some of the answer depends on your company's role in the supply chain, and part of the answer requires you to determine the basis on which you want to compete: cost, quality, responsiveness, variety, customization or other services.

To choose the right software, you need to consider the critical success factors keeping you from performing perfectly in your supply chains: order fulfillment timeliness; shipment completeness; visibility into changing demand; synchronization of production with demand changes; process costs to achieve margin; product quality; process quality and yield; design or production cycle speed; correct product configuration for customer needs; inventory balancing; or optimized production sequences to meet customer mix. Each of these factors demands a different piece of software functionality. To get the ROI top management wants from software, the key is to be sure the functions address the fundamental issues for your company.One of the functions nearly every company needs is an ability to share data with suppliers and customers. Visibility and communication have been major missing pieces from many trading partners' relationships. More accurate forecasts, plans and schedules -- validated by all parties -- can create savings for nearly every supply chain. And then each partner must execute on those plans.

What's hidden in that last statement is that, in addition to the commonly focused-on supply chain issues of planning and scheduling, the supply chain may also need execution-oriented information systems to be effective. Execution systems exist not only for order execution, but also for ensuring activities run smoothly in vendor-managed inventory (VMI) systems, in warehouses, and in production plants (manufacturing execution systems). In our work with manufacturers and software providers, we're finding success stories based on each of these types of products. Integrated suites, focused single-package solutions and products rarely associated with supply chain management can be the cornerstone of a company's supply chain information flow capability.

Designing a supply chain information system requires careful thought about the drivers of your success and analysis of the products that will support your market position.