What Are the Use Cases of Software in Supply Chain Management?

Supply chain management and software technology have a pretty good marriage. Oh sure, there’s the occasional rough patch. But overall, these two are like soulmates.

There are so many moving parts in any given supply chain. Too much complexity. In reality, we need technology to keep everything organized.

Granted, technology needs us too. Without human interpretive skills, within situational context, tech is just ones and zeroes. So we’re talking about a symbiosis.

There’s no doubt that software has a ton of use cases when it comes to logistics. Both today and in the future. So in this article, let’s take a brief step back to review these use cases. Also, let’s do a little brainstorming and hit some software highlights.

The Three Main Areas of Supply Chain Software

In reality, most of what we talk about when it comes to supply chain software revolves around one of three areas. Those categories are:

1. Cost management tools
2. Supply chain planning
3. Digitization of systems

Some of the best software might cover more than one base. But in general, it’s important to know which of these areas your software addresses. This is the roundup of the best use cases for software in the world of supply chain management. We’ve organized them into those three categories.

Let’s dive in with the best use cases for logistics software when it comes to cost management.

1. Cost Management Software Use Cases

In reality, this is the primary objective of the entire logistics industry. You have to spend money to make money. We could probably do an entire article solely about cost management software for logistics. But everything we do is about managing costs.

What are your costs? A short list starts with your most important asset: your employees. Next comes your vehicle payments, if you’re asset-based. Then maintenance costs. Fuel costs. Other travel expenses for drivers. And back-office costs like rent, and any other overhead costs. Software has a  use case to streamline the management of all those costs. Just don’t forget the cost of your IT and software as a service (SaaS)!

Speaking of SaaS, let’s list a few software use cases that help with cost management.

Payroll Software

Payroll can be outsourced to a good payroll software provider. Find the right payroll software provider for your company’s size and business model. As such, payroll software use cases include the following:

• Running payroll, obviously
• Tracking paid time off (PTO)
• Managing direct deposits
• Building reports
• End-of-year (EOY) accounting
• Keeping track of taxes

Fleet or Asset Management Software

Fleet management software provides businesses with their asset tracking process. Trucks are always on the move. Today, that means they’re accumulating data. Therefore, using software to track your assets streamlines the entire process.

Here are the use cases for asset management software:

• Mileage tracking
• Routine maintenance schedule tracking
• Return on investment (ROI) tracking and reporting

Driver Management Software

Driver management software helps keep your drivers safe and organized. Software communicates with your fleet through onboard telematics and GPS. In short, these Internet of Things (IoT) devices require software. GPS obviously provides a real-time location for your truck and driver. That eliminates the need for constant check-calls.

But further, telematics software produces reports on how drivers are performing. Telematics software can also automate the hours of service (HOS) recording process to a certain degree. The next generation of software manages the live feed provided by onboard cameras. Cameras might seem like a step too far for some. But in reality, camera footage can protect drivers in the event of an accident.

That said, here are a few use cases for driver management software that helps with cost management:

• GPS tracking
• Telematics tracking and driver performance optimization
• Hours of Service (HOS) tracking
• Onboard cameras and risk mitigation

2. Supply Chain Planning Software Use Cases

Every day is obviously a new battle in the logistics industry. The supply chain gets support from a highly networked web of suppliers, manufacturers, carriers, warehouses, and logistics providers. It goes without saying that everyone communicates through software. The best use cases for logistics software involve supply chain planning.

In reality, planning involves a broad umbrella of processes that all benefit from software. For example, these processes include load matching, shipment routing, tracking, and other operations. Those use cases are covered by transportation management system (TMS) software.

Beyond that, software powered by machine learning and artificial intelligence (AI) helps with processes like forecasting, inventory management, and other business analytics. These use cases fall under warehouse management systems (WMS).

Let’s trot through some more details.

Transportation Management Systems (TMS) Software

Here’s your bread and butter of logistics software use cases. TMS’s load matching and routing software is simply vital to the entire industry. In essence, load matching facilitates the process of aligning unassigned freight shipments and carriers with capacity. Compare that to back in the day, when we matched freight by phone and fax machine!

In reality, TMS software helps streamline the entire load process. For example, it helps with everything from routing, to load matching, to delivery confirmation, to conflict resolution—and of course, paperwork management.

• Optimized routing
• Load matching
• Paperwork and load documentation
• Delivery confirmation
• Conflict resolution tracking

Warehouse Management System (WMS) Software

When it comes to storing and organizing the goods, a WMS is critical. WMS software helps warehouses control and coordinate their operations. In essence, WMS helps optimize the flow from unloading, to storage, to inventory counting, to staging, and back to loading. Some WMS platforms use machine learning and AI to essentially streamline operations by anticipating spikes in demand. Beyond that, a WMS has several core use cases, which include:

• Inventory management
• Order fulfillment management
• Over, short, or damaged (OS&D) resolution
• Personnel management
• Facilities management

Yard Management Systems (YMS) Software

Another logistics software use case has developed for yard management. In other words, the yard is the interface between truck and warehouse. In short, yards can be unorganized spaces, filled with bottlenecks and inefficiencies. Thus, a YMS can be described as covering a critical gap between your TMS and WMS.

That said, here’s a few specific use cases for a YMS.

• Streamlining the check-in and check-out processes
• Organizing traffic patterns
• Limiting lost or damaged freight and trailers
• Reducing idle times
• Limiting excessive detention charges

3. Digital Transformation

The third area we’ll discuss is digital transformation. This use case for logistics software is a bit meta because digital transformation implies an inherent degree of software. But what we’re really talking about is this: A company undergoes a digital transformation to achieve more efficiency, optimize its processes, and increase its overall value.

One logistics software use case for a digital transformation is document digitization. Digitization is the process by which paper documents are replaced by digitized versions of that same document. For example, bills of lading (BOLs) can now be replaced by electronic bills of lading (eBOLs).

To summarize, everything we covered today will be improved by the continued digitization process. Put another way, a paperless supply chain is a more efficient supply chain. It’s also safer because face-to-face contact becomes unnecessary when you can manage business from a smartphone or tablet.

That said, here are several examples of digital transformation.

• Digitized documents
• Tech stack or systems integration
• Risk management
• Control towers
• Cloud-based flexibility
• Supply chain visibility tools
• Digital twin

Flaunt It, Babe

At this point it’s pretty clear. Logistics software industry and the supply chain industry are a hot couple. They share a ton of use cases. They work well together. And there’s no sign of things cooling down from the “honeymoon phase.”

If you’re in the market, only you know the right software marriage for your company. But hopefully you walk away from this article inspired with an idea or two. Because make no mistake—whoever has the best software will make themselves most attractive to potential suitors.

Then, once you find software that makes you happy, don’t take it for granted. In other words, nurture your software, and keep things fresh.

This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.