A smoothly functioning supply chain is essential for any organization’s success and growth in today’s fast-paced marketplace. Consumers expect to be able to find, buy and receive the item they want in a timely manner, however, this is difficult to accomplish for an organization with a poor supply chain execution strategy. Let’s look at what supply chain execution entails and what kinds of software and systems can help companies create a foolproof supply chain execution roadmap.
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What is Supply Chain Management?
Supply chain execution (SCE) falls under the realm of supply chain management. Supply chain management refers to the way that organizations coordinate processes in production, inventory, distribution, transportation, warehousing, etc. within a supply chain. When all these variables are operating efficiently and in synch with one another, the supply chain runs efficiently, minimizing costs and ensuring that customer needs are met in a timely manner. Supply chain execution is the second part of the supply chain management process and takes place once the supply chain planning step has been completed.
What is Supply Chain Execution (SCE)?
Supply chain execution refers to how goods are driven down the supply chain, from procurement to delivery. The goal of a successful SCE strategy is to make sure customers get their items on time and to maximize the use of assets to lower costs in each step of the supply chain. Communication is essential to supply chain execution success, as is the proper software, systems and equipment. An important part of SCE is tracking any issues that occur during the movement of goods throughout the supply chain, such as bottlenecks. When these issues are identified quickly, management has time to react and solve the problem by reassigning workstations or machinery, rerouting products, etc. This allows organizations to keep up with rises and falls in consumer demand and mitigate the harm caused by the bullwhip effect.
As you can see, keeping track of supply chain operations in real time is essential for the success of a supply chain execution strategy. To gain this real time visibility, organizations use supply chain execution software and applications to keep track of various execution tasks throughout a supply chain. Here are a few common applications and software types that are used in SCE.
Common Types of Supply Chain Execution Software
With the rise of cloud based management solutions for supply chain, supply chain management (SCM) software is being used by more and more organizations. Here are a few of the most common types of software utilized in supply chain execution.
Transportation Management Systems (TMS)
Transportation management systems do just what the name implies – manage the transportation portion of the supply chain. A good TMS can help an organization manage and optimize carriers for land, sea and air transportation. Transportation management systems keep track of packages in transit and can also handle common shipping concerns, such as international tariffs.
Warehouse Management Systems (WMS)
The main function of a WMS is to help organizations optimize warehouse operations. This includes use of warehouse space, inventory management, order fulfillment, labor distribution, etc. Warehouse management systems can help create a picking, packing and shipping process that increases the speed of order fulfillment and lowers warehouse operating costs. Warehouse management systems can also help with keeping inventory levels stable.
Order Management Systems (OMS)
Order management systems are designed to organize orders from different sales channels and optimize processes such as order prioritization, order creation, returns management, etc. A good OMS allows an organization to see and keep track of all these processes in real-time on one interface.
Warehouse Control Systems (WCS)
Warehouse control systems interface with warehouse management systems to regulate warehouse equipment such as sorters, scanners, conveyor belts, etc. A WCS can help make all these tools more efficient at handling inventory and help you quickly spot any productivity issues as they arise.
Labor Management Systems (LMS)
Labor management systems do just what the name implies-help warehouses manage human labor. This type of software helps companies figure out what amount of workforce will be needed and when so that warehouses are not under or over-staffed. This helps warehouses save money on unnecessary labor and prevents order fulfillment from being delayed due to understaffing. A good LMS can also track the productivity of workers to help monitor labor costs.
Yard Management Systems (YMS)
Yard management systems utilize technologies such as GPS to track and coordinate trailers, pallets, trucks, etc. through the yards of a warehouse or manufacturing facility. This type of software helps warehouse managers optimize the loading and unloading of goods to speed up order fulfillment and lower costs.
Slotting is the process used to place inventory in the best location in a warehouse to minimize the time and effort it takes for items to be retrieved to fulfill orders. For example, certain types of items are grouped together to reduce the number of trips a worker or piece of equipment needs to make to find items commonly shipped together.
Manufacturing Execution Systems (MES)
A manufacturing execution system (MES) is used to manage processes on a shop floor. An MES can keep track of orders and inventory levels, manage workloads and schedules, and keep track of transaction information to report to ERP systems. An MES can also send orders electronically to workers if a schedule needs to be changed quickly.
MES software allows organizations to maintain detailed records of products with ease. Tracing and tracking are increasingly essential for companies working with global supply chains, so maintaining this data can be invaluable. This is especially true in industries more likely to deal with recalls, such as food or pharmaceuticals.
Tips for Successful Supply Chain Execution
Successful supply chain execution leads to quicker deliveries, less unavailable inventory, happier customers, etc. In short, it helps to lower operating costs while raising profits. Let’s look at a few steps to start improving supply chain execution strategies at your organization:
Start With a Plan
Before you implement anything, you should have a solid plan in place. While this part should be mostly covered during supply chain planning, you should still check to make sure your planned processes are solid enough to make your SCE strategy successful. A few things to consider include:
- Which manufacturers you will source inventory and raw materials from
- Where you still store inventory (warehouses, distribution centers, etc.)
- How much inventory you will need at different points (based on predicted demand)
- How to distribute inventory into the best warehouse or fulfillment center based on locational demand
- How finished goods will be transported to fulfillment centers
- Who will fulfill your orders and what your order fulfillment process will look like start to finish
These are a few things that you should have a firm grasp on before moving on to the next stage of the supply chain execution process.
Understand Your Communication Channels
Communication can be an unexpected hurdle in supply chain execution because you are dealing with so many players at once. From your team to vendors and manufacturers, to your customers, communication is essential for a well-functioning supply chain. Make sure you have the tools and processes in place to foster effective communication before you move forward with new strategies.
Prioritize Tasks by Importance
Creating and managing a lean supply chain that delivers products in a timely manner and lowers costs requires efficient and prioritized processes. This means that early on, a company’s leaders must figure out what the most important tasks in the supply chain are and prioritize them. This process can help managers figure out where processes get stalled and where additional investments could help increase productivity the most. Some of these important tasks include demand forecasting, inventory distribution and picking and packing. Saving time in these areas can greatly improve the speed and profitability of an entire supply chain.
Since these tasks are unique from situation to situation, it is important to take the time to look at your own supply chain to evaluate priorities and see where your strengths and weaknesses lie. This allows you to make improvements and even outsource some tasks to software or outside vendors if it will help increase productivity and profits.
Utilize Supply Chain Execution Software and Applications
As more strides are being made in technology, supply chain execution systems that were previously only available to large businesses have become more assessable to smaller companies. Utilizing things like labor management systems, warehouse management systems, order management systems etc. can help you keep all of your information in one spot, reduce the chances of human errors, save on labor costs, speed up processes, etc. Project management software can also be invaluable for the supply chain execution process, as this type of software allows you to plan, sort, and manage all your tasks in one place.
How enVista Can Help
Creating an airtight supply chain execution strategy is no easy feat. It requires careful planning, data analysis, software and application use, communication, etc. However, as explained above, there are certain steps and tools you can utilize to make the process easier. enVista’s supply chain consulting team has helped many organizations with supply chain planning and executing. Let’s have a conversation if you are ready to lower costs and increase efficiency with the help of our expert supply chain execution consultants.