Writers often write about what they know best, which is understandable. If you write what you don’t know as well you might not write the right thing. Know what I mean?
However, I recently had a very “educational talk” with Ed Lewis, the CEO of Mitrix a supply chain management (SCM) company who gave me an overview of SCM and why it is so important for businesses to grasp and manage.
SCM is the aspect of business, applicable to businesses that ship goods (not that sell services). SCM manages your boxes of shoes arriving from Mexico on time, making sure trucks get to your distribution centers, managing what happens if a storm cancels a train with your cargo of bags for retail stores and etc. This is Supply Chain Management.
SCM is at any company that has good’s based business. Whether direct to customer, intermediaries, or etc.
Ed explained that 20 years ago, a company was only concerned with the goods they bought and the goods they sold. But today, the business world is very competitive and more globalized and there’s not enough margin left in goods based sales to accommodate inefficiencies anywhere in the supply chain. You’ve got to worry about every part of the “chain” that is responsible for your product finally reaching the customer.
It is easy to just buy more inventory and hope you don’t run out. But small businesses, especially, can’t afford to do this and have their money tied up in warehouses. Ed explained that product lines change so fast that having too much inventory is no good. If you have 4,000 cases of red t-shirts that no one wants, there’s little you can do but mark the price down (and lose money) or throw/give them away and still lose money.
Since smaller businesses don’t have the money that larger businesses have, it is even MORE critical that they are able to synchronize their supply chain, just as many larger businesses do. Many businesses try to get by using Microsoft Excel, email, telephone and a pad of paper but there is a lot of efficiency and time wasted in these manual processes.
Many smaller business owners feel that the software they need to help them manage SCM is expensive, complex to install and will take a whole family of expensive, by-the-hour, consultants. Well often times they’re right.
However, Ed, whose been in this business for a long time said that smaller businesses would prefer to avoid consultants and not worry that they might be told they need 2 consultants for 3 months and then being told a month into the deal that they will need 4 consultants for 8 months.
Mitrix’s software was initially created for Mitsui USA, one of the most diversified trading and service enterprises in the world, to manage its supply chain. But now Mitrix, a wholly owned subsidiary of Mitsui USA is selling its software, sold as a hosted application (software as a service) to others.
Ed said that with Mitrix’s software as a service customers get access to full blown SCM features with best practices built in.
Another problem, not so much now, but still an issue, is that a prospective business customer might worry that if they put all their business on a hosted service, what happens if the hosted service provider goes out of business? A valid concern. If you’re entire operations are “online” and your “hosted application” provider goes down, everything you have on their service goes down as well. Ed said that since Mitrix is part of Mitsui USA, Mitrix is backed by a stable company and is not like a young upstart company still using venture capital funding.
Mitrix is a partner with Salesforce.com and is part of their Appexchange, an online repository of applications that seamlessly connect to Salesforce.com.
I wondered, where would Mitrix’s product fit in to a small business that already has an accounting software, contact management, CRM and other tools that do many functions of supply chain management. Ed explained that their software’s key function is to work with these products and help you work with those partners OUTSIDE your company who are responsible for the success of your product moving. If you sell couches, made in China, that must go to 20 different retailers’ warehouses, you need a system to help you manage every aspect of the ships, trucks, manufacturing plant distribution, retailers’ inventory and everything in between. Supply Chain Management software does this.
If you’re still using spreadsheets, pencil, paper and cobbled together databases to manage your growing supply chain, it might be time to consider supply chain management software. If it is a hosted service or computer software you’ll have to consider which is best for you. But a hosted service will help you get up to speed quickly and a lot faster than traditional computer software.
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