Growing use of software in the supply chain industry

Paul Feeney, Head of Sourcing and Development, encourages the use of specialist software to manage the supply chain. He says that it helps 3PLs to move closer to satisfying customer needs.

Being a third-party supplier (3PL) in Middle East markets is a challenging undertaking today, with many experienced firms competing for business. As consumers in these markets become more demanding and selective, so FMCG logistics experts need to become more adaptable and responsive.

The role of software

Business strategy in a company like Mohebi Logistics is influenced by the need to meet customer requirements, satisfy issues of compliance/safety/security, introduce new products and open up new markets. In each area, advanced supply chain software programmes help the 3PL to keep a finger on the pulse of the business.

For example, at Mohebi Logistics we use:

Freight forwarding software that allows users to rapidly process international shipments and incorporate all invoicing and accounts payable processing issues.

Warehouse management software that can handle the work practices, processes and billing schedules of multiple customers. The system delivers real-time information through EDI (electronic data interchange), barcode scanning and other technology-based solutions that increase warehouse efficiency.

Transport management software includes route optimization features to plan deliveries on a run that is based on the quickest or shortest route to destination. In addition, we constantly review the profitability of each vehicle and job.

Customs management software arranges the submission of simplified document and saves considerable administrative time.

Customer relationship management software communicates with our prospects, shares sales information, helps to close deals and keeps our customers satisfied.

The essential point is that all these software programmes need to work well not only within their own individual sphere but equally across the enterprise as they interrelate. Only by gaining a multi-dimensional view can 3PL management deal with both the daily and the extended horizon.

The empowerment of sharing

So the sharing of information becomes the essential prerequisite. No matter where you are in the process – a shipper, a warehouse manager, a truck driver, an end-user – you need to be part of a collaborative supply chain that consumes fewer resources along the route to the final delivery point.

Managers at every stage should be able to interface with their software, analyze variability and see the accuracy of their forecasts.

We recommend that any new supply chain IT system be evaluated according to the parameters of projected return on investment, total cost of ownership and the estimated timescale needed until the benefits of that investment can be realized. We believe that effective arrangements in supply chain software can be a bridge towards creating new business opportunities.

The trend is clear: software is becoming one of the main engines that drive progress in the logistics industry. According to Gartner, the worldwide market for supply chain management software market totaled $7.7 billion in 2011, a 12.3% increase from 2010. As operating margins continue to tighten, supply chain partners need to share their information better if they are to survive and prosper. It’s a lesson that Mohebi Logistics has learnt well.