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How SMEs Can Win With Supply Chain Management Systems

How SMEs Can Win With Supply Chain Management Systems

Why small and medium-sized enterprises (SMEs) must leverage supply chain management systems.

Small and medium-size enterprise (SME) owners need to understand that they have an untapped gold mine right in front of their eyes. It's their supply chain management system.

Even though SMEs can choose from among an abundance of such software, which supports the daily decision making of complex matters like what to buy, when, how much and from where, too few understand the true value of it.

I find this surprising, because we have been living in the age of information technology for many decades, and still many SME owners do not appreciate that IT systems, such as SCM systems, are only as good as the data entered into them.

In my experience, many SMEs are not taking SCM systems seriously enough and, as a result, they are losing market share and, ultimately, money.

Most of the SME's that I have advised had not been maintaining the simplest data, such as product lead times or minimum stock levels, in their SCM systems. They left these fields empty or entered meaningless data. Instead of entering the proper data and letting the SCM system do the work, the SME owner did a lot of manual calculations while sitting in front of the computer.

As well, the simplest SCM processes were not in place or, if they did exist, were not followed. Often the SME owner talked about and planned to use an SCM system, but the good intentions ended up buried under the daily piles of work. This usually happened because the SME owner did not let employees run these SCM projects in a consistent way.

Basically the SCM strategy in many SMEs is non-existent.

This has to change.

While daily business life is, even in SMEs, increasingly global, complex and fast paced, with information flowing into a company from various directions, the human being can only handle a limited amount of data. Even a very small company can have thousands of products and hundreds of customers and several suppliers that must be managed daily or weekly.

SCM systems offer huge process, customer satisfaction and direct cost reduction potential for SMEs. Without proper SCM strategy, action plan and processes, SMEs will lose business to competitors who have already implemented SCM.

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