With business cycles getting shorter, there’s pressure to run lean and be more responsive. But the processes of procuring, manufacturing and distributing can be time-consuming, slowed down by manual business processes.
SCM, or supply chain management, can help a business integrate its supply chain with key customers and suppliers for speed, efficiency and cost savings. But SMBs must find the right fit for their business model, or decide if SCM even makes sense.
Integrating with customers and suppliers will allow you to become “sticky” with them, says Colin Brown, president, founder and CEO of eBridge Software Inc., which offers integrated solutions for SMBs. This means you will become more valuable to your customers as they come to rely on you.
The company’s SCM solutions allow a user’s back-end accounting applications to exchange information with customers and suppliers, as well as various SCM applications such as procurement solutions, warehouse management and third-party warehouse providers. Benefits include flexible data exchange (including automated data exchanges) and reduced risk, due to less reliance on manual data entry and the reduction of duplicate efforts.
The company also offers products in an on-demand model, says Brown, where customers pay a monthly fee for integration with their partners or from application to application. For example, they can integrate their customer relationship management (CRM) package to their back office.Sometimes electronic data interchange (EDI) or even CRM can start the process of integration, he says. SMBs that run a Web storefront might be taking orders through an accounting package, which can be integrated for drop-ship with a courier company.
Businesses are not always calm about the process of integrating, according to Brown. “The majority of SMBs react in fear, not in a proactive way,” he says. Not a lot of Canadian SMBs have integrated their electronic documents and most wait until they’re going to lose customers before they do something about it.
In Canada, 51 per cent of mid-market companies (between 100-499 employees) don’t have supply chain management in place and have no plans to roll it out over the next 12 months, according to a recent survey by IDC Canada. Twenty-eight per cent of respondents said they had an adequate system in place and weren’t planning to make further investments. And only 18 per cent had SCM in place and were planning on making upgrades or custom modifications.
Of those who were using SCM, 32 per cent saw overall cost reduction as being the key benefit, says Michael Hyjek, senior analyst of Canadian customer segments with IDC Canada. But once rolled out, they start seeing other benefits, like increased monitoring, analytics and automation.
What a lot of companies are struggling with is how to get there, says John Berki with CSB Systems, which was acquired by Bell Canada last June to become part of a wholly owned subsidiary called Bell Business Solutions. CSB specialized in providing mid-market companies with business software solutions including supply chain integration, B2B collaboration and e-commerce.
First, SMBs must figure out which skills, technologies or investments are required to make that work, says Berki. But you’ve got to have the fundamentals in place first. What’s your handle on order commitments, due dates, schedules and service capabilities? And if you want to move externally, you must have your act together internally, he says, otherwise you won’t get the returns youíre looking for.
Then, figure out where external pressures are pushing on you, or where your costs must be contained. To do it right, you must look at your business process flows. Where are the greatest opportunities to apply technology to your processes?
Consider not only the costs and internal skill sets required, but the degree to which you can deploy SCM across your supply chain and its usability for your own people and your trading partners.
But keep in mind that if your core data is weak, then all the investment in the world isn’t going to help.
“It’s like eating healthy,” he says. “It’s really hard to get around to doing it, but once you do there are a lot of other benefits.”
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