a Supply Chain Management System (SCMS) is a software that supports the management of information within a supply chain. The aim is to make the decision-making and planning within the supply chain easier and therefore work more efficient and successful.

To better understand what kind of information have to be managed and how a supply chain works please follow the link: Supply Chain

To reach its main aim - which is to have the right item, in the right quantity, at the right time, at the right place, for the right price, in the right condition, to the right customer - three different flow processes take place within the supply chain:

• The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs.
• The information flow involves transmitting orders and updating the status of delivery.
• The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.

For example, to ensure an optimal information flow and integration of suppliers within the whole supply chain, there is the opportunity of a Collaborative Commerce.

According to these information goods are produced. Starting with the first supplier finally the right good will be delivered to the end-customer.

Additionally money has to flow from the ordering party to the supplier. This process is also known as “order-to-payment”. ¹⁾ The challenge is to manage the flow of information, goods and money in an efficient way so that success factors are generated for the participating companies in the Supply Chain. ²⁾ This process is called Supply Chain Management.

As we got to know from the first chapters of this article a bundle of information flows within a supply chain. The more efficient this information is handled the more efficient and successful the supply chain will be. Supply Chain Management Systems (SCMS) are useful tools to support the managing of information. It is the aim of SCMS to create transparency of information for the different companies participating in the supply chain and therefore make decision-making and planning easier.³⁾ For example each supplier needs to know how much output he has to produce for the demanding party. This is easier if he has information about the quantity to produce as well as the capacities and the inventory of the demanding party. A SCMS offers this information and therefore makes it easier to plan and steer each single company as well as the whole supply chain. This is valid in particular for multi-tier supply chains. Therefore a SCMS is an add-on on the classical ERP-system. While an ERP-system is mainly responsible for the information flow within a company, SCMS connects different companies with each other ⁴⁾. These two systems work together: the ERP-System offers the data-basis for successful planning and decision making with SCMS.

The main task of a SCMS is the planning. This is done for different areas:

Strategic planning is mainly the configuration of the Supply Chain. In detail decisions are made about which customers are served from which warehouse, what are the required capacities and how much should be invested in which activity.⁵⁾

Tactical planning refers to the planning of ⁶⁾

• Production- and logistic-resources with the aim to fulfill the current and future demands
• stock to assure the delivery on time
• Transport of resources
• demand for different products and regions

The aim of the functional planning is to optimize and continuously improve the ongoing operational process by short term planning. This involves activities like Vendor Managed Inventory.

supply chain simplification

supply chain management systems