What Is a Supply Chain Management System?

Businesses often rely on robust supply chain management software systems to integrate vendor processes and mitigate risk throughout the planning, sourcing, manufacturing, delivery and logistics, and returning stages.

bird of eye view of containers at a dock

Published June 07, 2022   •   3 minute read

A product’s supply chain entails multiple processes and stages prior to ending up on a shelf for purchase by consumers. 

It’s critical businesses maintain oversight of these to ensure full transparency for stakeholders, efficient progress, optimized workflows, streamlined coordination, identification and remediation of potential roadblocks, and more. 

Even the most basic products demand such insights to achieve and maximize optimum efficiencies, from production to distribution—making an advanced supply chain management system imperative for each of its many ‘links.’

This modernized software provides companies a complete scope of end-to-end processes, enabling smooth integration and risk mitigation.

Components of Supply Chain Management

According to IBM, five prevailing components comprise the average supply chain management system, including planning, sourcing, manufacturing, delivery and logistics, and returning.

Planning

This involves plotting all necessary steps and products required to meet demands for consumer goods and services. Those involved determine overall supply chain workflow, as well as any metrics to determine the success of the charted route.

Sourcing

Businesses then choose which suppliers to source essential goods from, monitoring those relationships as well as any necessary documentation, contracts, and certificates of insurance (COIs) over time. 

Especially in the cases of products demanding numerous sourced goods and services, it can be quite a handful to adequately track vendor information and avoid non-compliance risks. Businesses can easily curb liabilities by maintaining third-party communications and documentation on streamlined software systems, enabling easy onboarding, in-app messaging, pre-qualified application comparisons, and more.

After selecting suppliers, businesses can manage orders, receipts, inventories, and authorized payments, the IBM analysis continues.

Manufacturing

The manufacturing process converts sourced materials into desired consumer products, tests their quality, packages them, and coordinates delivery, the analysis reads. 

Delivery & Logistics

After goods and services are manufactured, businesses schedule deliveries, itemize orders, dispatch products, and invoice and receive stakeholder payments.

Returning

If a product is faulty or flawed, businesses should, finally, accept defective items through a standardized return process.

Optimizing Flow With Supply Chain Management Systems

Throughout the flux of communications, goods, services, and documentation necessary for a successful supply chain, it is vital businesses invest in streamlined software to manage the flow of products and information.

Not only does a supply chain management system track the planning, sourcing, manufacturing, delivery and logistics, and returning components within the supply chain, but a robust software seamlessly integrates communications from each stakeholder, enabling easy connections between suppliers, manufacturers, wholesalers, retailers, transportation providers, graphic designers, logistics managers, and more, according to resource planning software vendor Panorama Consulting.

Equipped with artificial intelligence (AI), automation, and machine learning technologies, among others, today’s modern software leverages cutting-edge capabilities that spot gaps or issues in the supply chain as they unfold—proactively righting them before they negatively impact systems, the explainer continues.

For instance, in the event of a part malfunction, companies can use such smart capabilities to report issues in real time, empowering proactivity in curbing negative experiences and customer complaints, it states. This enhances visibility throughout the supply chain, expediting delivery and improving overall consumer feedback.

Streamlining Third-Party Management in the Supply Chain

Amid the flow of supply chain production and distribution, real-time stakeholder information is essential in effectively monitoring progress and compliance. 

Without these insights into crucial vendor documentation, contract expirations, and insurance inadequacies, businesses risk significant non-compliance liabilities. 

According to a recent survey from multinational professional services network Deloitte, 87% of respondents experienced third-party incidents that “disrupted their operations” within the two to three years leading to the inquiry, and 11% of such incidents resulted in “complete third-party failure.”

By investing in robust automated tracking software, businesses can diminish the minutiae of manual third-party documentation monitoring, build safer vendor connections, and empower streamlined supply chain management.


Business Credentialing Services (BCS) is one of the preeminent COI management solutions on the market, offering self-service and full-service tracking. The BCS App facilitates streamlined efficiencies through simplified in-app onboarding, automated request for proposal (RFP) broadcasting, and integrated communication tools. 

Our innovative platform supports your business in third-party management, compliance mitigation, and more. Contact us today.

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