Logistics is naturally a complex topic, since so many processes need to seamlessly intertwine, and there are usually numerous partners involved: customers, distributors, manufacturers, external warehouses, suppliers and subcontractors actively exchange data. This includes order data, shipment information, freight lists, receipt logs, invoices, credit notes – a huge range of information, moved around in numerous formats, even including programmed interfaces and heterogeneous systems. This all happens when information is being sent via dozens of systems with hundreds of software programmes that have thousands of version numbers, meaning that not everything always goes as planned. It’s often media disruptions that cause problems. For example, loading documents that are printed and scanned again. Nowadays, however, the problem often lies with the poor communication between the different IT systems. The customer’s product was not delivered because the system did not save the house number. The stock list was not updated because the server was down and nobody noticed. The haulier was not indicated to the customer because the mapping was faulty.
IT needs to meet a wide range of requirements
One thing is clear: the requirements of stakeholders in such logistics chains are multifaceted and highly heterogeneous. Furthermore, standards for formats are not always guaranteed, particularly in international data exchange. A classic example: A smartphone manufacturer orders gyro sensors for their devices with which the smartphones could respond to, for example, position changes. Instead, they receive barometer sensors. An experienced storekeeper or technician would have noticed this, since at around 15 mm², a gyro sensor is about three times the size of a barometer which measures just 5 mm². Since in this case the box was delivered via the German branch of a manufacturer from the Far East, good advice and rapid service are generally expensive in such a situation. The consequence is production downtime.
These and similar problems arise if, for example, the data systems of the warehouse in the Far East are unable to communicate with the international branches, or if files are damaged en route, or if there are problems with individually programmed interfaces between the German distributor and the Asian parent company. This can be remedied by increasing the reliability of data availability by having the data integration software responsible for the process automatically query data on a global scale on the respective servers in a time-controlled manner and then transferring it to the required formats. Very importantly, if the Japanese or Chinese server cannot be reached, the IT manager must automatically receive an e-mail or SMS from the system. Furthermore, it should be possible to save alternative options as automated routines within a professional software.
Correctly interpreting data
The right products, at the right time, in the right quantity, at the right place: for this to work, data must be correctly interpreted in national and international trade. In addition, the German subsidiaries sometimes also need the supplied data in different formats – for example for saving in SharePoint in xls format or for automatic processing in XML or EDIFACT. This data can then be accessed in turn by end customers. These requirements are part and parcel of everyday business in multinational corporations.
Data integration and SCM must collaborate seamlessly
To ensure that the right products always end up at the right sales office to then reach the producers and other customers, the software that ensures smooth data integration and the SCM software should ideally work together seamlessly as an efficient hub for heterogeneous supply chains so that all partners in a supply chain are always up to date and on the right footing. This crucially includes integrated data management. It must be ensured that wherever possible, all data sources can be connected using simple configuration without programming and be made available for further processing. And, of course, it must be ensured that the existing systems as well as the systems of the business partners to be connected do not need to be changed.
Data integrity problem: 25,000 kg cleaning agent – by accident
Sometimes the devil is in the detail. After all, it’s not just about optimizing and automating processes, but also about ensuring the integrity of the data. Time and again, it has been down to faulty data when goods are not delivered on time – for example, if a decimal place shifts in the re-order or if orders are received too late. The regulations for the shipment of part-load consignments alone could fill four DIN A4 folders. The responsible employee could quickly lose track.
That’s why it’s imperative for the SCM software to manage the entire supply chain and thus prevent errors as a fully configurable solution. Take the example of a chemicals manufacturer that wants to send 2,500 kilos of cleaning agent as part-load transport. The respective chemicals manufacturer employee enters the manufacturer’s data independently into a web interface for the manufacturer’s logistics provider created in the SCM software. This web interface ideally has the exact fields and functions required by the logistics provider for its daily work and guides the customer through the order. If a comma is inadvertently entered at the wrong position during data input, 2,500 kilos quickly becomes 25,000 kilos. Many systems do not recognise these kinds of errors and finalise the order. A good SCM solution, on the other hand, automatically informs the customer that this quantity cannot be sent as a part-load consignment because it must not be heavier than 2,500 kilos – the employee can then correct the entry error. The system is supplied with rules for part-load transport. The system will then know every detail that the logistics provider needs to consider for its operating activities, such as the number of packages, the package types to be used, the maximum length, width and height of the consignment as well as transit times and departure times for export consignments. A wide range of additional services can then be added which the logistics provider can offer their customers. In such cases, the SCM software inspects each customer order for all these parameters as well as the company guidelines for transporting hazardous goods in the case of chemical products, for example.
Automatically recognise contradictions
Good SCM software should also automatically recognise any type of contradiction. The software then serves as a fire service. Take the following situation as an example: A customer indicates that the logistics provider should deliver the product the next day and notify the customer by telephone a day in advance, but this is technically impossible, as the product is being transported overnight. The software will make the customer aware of this immediately. This means that through clearly defined processes mapped in the system, the user immediately recognises which additional options are possible and which aren’t. This reduces the subsequent work and makes the transport processes more effective.
Transparency, simple operation, system speed, efficiency, and configuration instead of programming are the factors by which success is measured. That, and the ability to react to future requirements in an agile and flexible manner. All those involved in a logistics process can therefore ensure that the right processes are automatically initiated, errors are promptly detected and rectified, and the customer will receive the correct delivery on time.
10 tips to keep in mind for supply chain management software
1. End-to-end with configuration: Good supply chain software should be capable of being deployed across systems (i.e. end-to-end) and immediately – without any programming knowledge on the part of the user. Choose a software package that can be completely configured by the end user.
2. Testing: Test your preferred software and only shortlist a solution that can be operated in a simple and intuitive manner, e.g. using drag & drop functions.
3. Everything is displayed: Make sure that the system is truly capable of incorporating all flows of raw materials, components, semi-finished and end products, all information from any kinds of systems and all those involved along the entire value creation and supply chain from the raw materials supplier to the end customer – from start to finish.
4. Seamless data integration: Look out for integrated data management to enable seamless collaboration of all partners in a supply chain. Important: The systems of partners should be able to remain unchanged – both nationally and internationally.
5. User-friendliness: Make sure that intelligent workflow technologies help you to minimise user interactions in order to make the process as efficient as possible by means of a high degree of automation.
6. Integrated checks: The SCM software must recognise inconsistent data or incorrect data entries and either warn the user or, better still, independently rectify the error in an automated manner according to corresponding rules. This saves money and avoids stress.
7. International: Integrated time zone support makes it easy to extend the area of operation to other countries.
8. Multilingual: It is good if the software greets your international colleagues every morning in their respective native language. In our globalised world, multilingualism is an absolute must.
9. Adjustments without programming: It must be possible to integrate the respective business objects, such as a delivery note or consignment, into processes, interfaces or workflows in a flexible manner via configurations and without programming as well as to change them again.
10. Standard software: Opt for the use of a standard software system for data integration and management rather than in-house programming. This saves money and avoids stress if processes have to be changed or if updates are required. And they will have to be changed at some point.