The logistics and supply chain industry is undergoing a seismic shift, driven by the integration of cutting-edge technologies. Among these, IoT-based supply chain management software stands out as a game-changer.

By leveraging the Internet of Things (IoT), businesses are achieving unprecedented levels of efficiency, transparency, and agility in their supply chain operations.

Here we explore how IoT-based supply chain management software is revolutionizing logistics, its key benefits, real-world applications, and how it’s shaping the future of the industry.

What is IoT-Based Supply Chain Management Software?

The logistics and supply chain industry is at a pivotal moment. As global trade accelerates and customer expectations soar, businesses face mounting pressure to deliver faster, smarter, and more sustainable solutions.

IoT-based supply chain management software—a transformative force reshaping how goods move from point A to point B.

By harnessing the power of the Internet of Things (IoT), companies are unlocking unprecedented levels of efficiency, transparency, and agility, turning once-clunky operations into finely tuned systems.

IoT-based supply chain management software refers to platforms that integrate IoT devices—such as sensors, RFID tags, GPS trackers, and smart beacons—into supply chain operations.

These devices collect real-time data on various aspects of the supply chain, including inventory levels, shipment conditions, and vehicle performance.

The software processes this data to provide actionable insights, enabling businesses to optimize processes, reduce costs, and enhance decision-making.

The IoT-based supply chain management software encapsulates this fusion of IoT technology with supply chain management, offering a robust solution for modern logistics challenges.

Why IoT is Critical for Supply Chain Management

The global supply chain is complex, involving multiple stakeholders, geographies, and processes.

Traditional supply chain management systems often struggle with inefficiencies, lack of visibility, and delayed responses to disruptions. IoT addresses these pain points by:

Real-Time Data Collection: IoT devices provide continuous updates on inventory, shipments, and equipment status.
Enhanced Visibility: Stakeholders gain end-to-end visibility into the supply chain, from raw material sourcing to final delivery.
Automation: IoT enables automated workflows, reducing manual errors and operational delays.
Predictive Insights: Advanced analytics powered by IoT data help anticipate issues like delays or equipment failures.

By integrating IoT-based supply chain management software, companies can transform their logistics operations into agile, data-driven systems.

Unlike traditional systems that rely on manual updates or siloed data, IoT-based solutions create a connected, intelligent network.

They allow businesses to monitor, analyze, and optimize every facet of their supply chain in real time. The result?

A logistics operation that’s not just reactive but proactive, anticipating challenges and seizing opportunities with precision.

Key Benefits of IoT-Based Supply Chain Management Software

1. Real-Time Tracking and Visibility

One of the standout features of IoT-based supply chain management software is its ability to provide real-time tracking.IoT devices like GPS trackers and RFID tags monitor the location and condition of goods throughout the supply chain.

For example, temperature sensors ensure perishable goods remain within safe conditions, while geofencing alerts managers if shipments deviate from planned routes.

This level of visibility minimizes risks such as theft, spoilage, or delays, ensuring products reach their destination on time and in optimal condition.

2. Sensor Driven Inventory Management

IoT-based software revolutionizes inventory management by automating stock monitoring.

Smart shelves equipped with sensors track inventory levels in real time, alerting managers when stocks are low or when items are nearing expiration. This reduces overstocking, stockouts, and waste, leading to significant cost savings.

For instance, a retail chain using IoT-based supply chain management software can maintain optimal inventory levels across multiple locations, streamlining operations and improving customer satisfaction.

3. Enhanced Operational Efficiency

IoT devices collect data on equipment performance, vehicle routes, and warehouse operations. IoT-based supply chain management software analyzes this data to identify inefficiencies and recommend optimizations.

For example, route optimization algorithms can suggest the fastest or most fuel-efficient delivery paths, reducing transportation costs and emissions.

Automation of repetitive tasks, such as data entry or order processing, further boosts efficiency, allowing employees to focus on higher-value activities.

4. Predictive Maintenance

IoT sensors monitor the health of critical equipment, such as trucks, forklifts, or warehouse machinery.

By analyzing data on vibration, temperature, or wear, IoT-based software can predict when equipment is likely to fail and schedule maintenance proactively.

This minimizes downtime, extends equipment lifespan, and prevents costly disruptions.

5. Data-Driven Decision Making

The vast amounts of data generated by IoT devices are processed by advanced analytics and machine learning algorithms within the software.

This enables businesses to make informed decisions based on accurate, real-time insights. For example, predictive analytics can forecast demand spikes, allowing companies to adjust inventory and staffing accordingly.

6. Sustainability and Cost Savings

IoT-based supply chain management software promotes sustainability by optimizing resource use. For instance, real-time route optimization reduces fuel consumption, while efficient inventory management minimizes waste.

These improvements not only lower operational costs but also align with growing consumer demand for eco-friendly practices.

IoT-Based Supply Chain Management Software in Action

1. Cold Chain Logistics

In industries like pharmaceuticals and food, maintaining specific temperature conditions during transportation is critical. IoT-based supply chain management software monitors temperature, humidity, and other environmental factors in real time.

If conditions deviate from the required range, the software sends alerts, enabling quick corrective action to prevent spoilage or product damage.

For example, a global pharmaceutical company might use IoT sensors to ensure vaccines are stored and transported at precise temperatures, ensuring product efficacy and regulatory compliance.

2. Fleet Management

IoT-based software enhances fleet management by tracking vehicle locations, fuel usage, and driver behavior. Real-time data helps fleet managers optimize routes, reduce idle times, and improve fuel efficiency.

Additionally, IoT sensors can monitor vehicle health, predicting maintenance needs to avoid breakdowns.

A logistics company using IoT-based supply chain management software can reduce delivery times and operational costs while improving customer satisfaction.

3. Warehouse Automation

Smart warehouses powered by IoT devices streamline operations through automation. IoT sensors on shelves, pallets, and robots provide real-time data on inventory and equipment status.

IoT-based software integrates with warehouse management systems to automate tasks like order picking, stock replenishment, and space optimization.

For instance, an e-commerce giant might use IoT-based supply chain management software to manage high-volume order fulfillment during peak seasons, ensuring timely deliveries.

4. Retail Supply Chains

Retailers leverage IoT-based software to synchronize supply chain operations with customer demand.

Real-time data on inventory, sales, and logistics enables retailers to maintain optimal stock levels, reduce markdowns, and improve order accuracy.

IoT also enhances the customer experience by providing accurate delivery tracking and faster fulfillment.

Challenges of Implementing IoT-Based Supply Chain Management Software

While the benefits are clear, implementing IoT-based supply chain management software comes with challenges:

High Initial Costs: Deploying IoT devices and integrating them with existing systems requires significant investment.
Data Security: The vast amounts of data generated by IoT devices raise concerns about cybersecurity and data privacy.
Interoperability: Ensuring compatibility between IoT devices and legacy systems can be complex.
Scalability: Scaling IoT solutions across global supply chains requires robust infrastructure and expertise.

To overcome these challenges, businesses should partner with experienced IoT solution providers, prioritize cybersecurity, and adopt scalable, cloud-based platforms.

The Future of IoT-Based Supply Chain Management Software

The adoption of IoT-based supply chain management software is set to accelerate as technology evolves. Here are some trends shaping its future:

1. Integration with AI and Machine Learning

AI and machine learning will enhance IoT-based software by enabling more accurate demand forecasting, anomaly detection, and process optimization.

For example, AI-powered IoT systems could predict supply chain disruptions caused by weather or geopolitical events and suggest mitigation strategies.

2. Blockchain for Transparency

Combining IoT with blockchain technology will improve supply chain transparency and traceability. IoT devices can record data on a blockchain, creating an immutable record of product origins, movements, and conditions.

This is particularly valuable in industries like food and pharmaceuticals, where provenance is critical.

3. 5G Connectivity

The rollout of 5G networks will enhance IoT connectivity, enabling faster data transmission and real-time decision-making. This will make IoT-based supply chain management software even more responsive and reliable.

How to Choose the Right IoT-Based Supply Chain Management Software

Selecting the right IoT-based supply chain management software requires careful consideration of your business needs. Key factors to evaluate include:

Scalability: Can the software grow with your business?
Integration: Does it integrate seamlessly with existing systems like ERP or WMS?
Security: Are robust cybersecurity measures in place to protect data?
User Experience: Is the interface intuitive for your team?
Support: Does the provider offer reliable customer support and training?

Additionally, look for software that offers customizable features, real-time analytics, and compatibility with a wide range of IoT devices.

Conclusion

IoT-based supply chain management software is transforming logistics by providing real-time visibility, optimizing operations, and enabling data-driven decisions.

From cold chain logistics to warehouse automation, its applications are vast and impactful. While challenges like cost and cybersecurity exist, the benefits—improved efficiency, cost savings, and sustainability—make it a worthwhile investment.

As technologies like AI, blockchain, and 5G continue to evolve, IoT-based supply chain management software will become even more powerful, driving the future of logistics.

Businesses that embrace this technology today will gain a competitive edge in the fast-paced, ever-changing world of supply chain management.

Kreyon Systems IoT-powered SCM software helps you gain real-time visibility & control over your entire supply chain. Optimize logistics, reduce costs, & enhance efficiency with our cutting-edge IoT solutions. For queries, please contact us.

The post How IoT-Based Supply Chain Management Software is Transforming Logistics appeared first on Kreyon Systems | Blog | Software Company | Software Development | Software Design.

However, the advent of blockchain technology offers a promising solution to these challenges. By leveraging the power of decentralized ledgers, blockchain can revolutionize supply chain management, enhancing trust, traceability, and overall efficiency.

Traditional supply chains often face challenges related to inefficiencies, realtime visibility, and tracking goods. However, blockchain technology is emerging as a revolutionary solution to these issues, offering a new way of managing and securing supply chains.

This blog post will explore the potential of Supply Chain Management with Blockchain Technology, focusing on how it can improve transparency, security, efficiency, and overall performance across industries.

Understanding Supply Chain Management (SCM)

Before diving into the specifics of blockchain technology, it’s important to have a clear understanding of Supply Chain Management (SCM).

SCM refers to the oversight and management of the entire flow of goods and services—from raw materials to finished products reaching the end consumer.

It involves coordinating multiple stakeholders, including suppliers, manufacturers, logistics providers, and retailers, all of whom must work in harmony to ensure the seamless delivery of products.

Key Challenges in Traditional SCM 

Traditional supply chain management has been grappling with a host of challenges that can significantly impact efficiency, cost-effectiveness, and overall customer satisfaction. Here are some of the key challenges

Lack of transparency: In many cases, it’s difficult to trace the journey of a product through the supply chain.
Counterfeit products: Poor tracking makes it easier for counterfeit goods to enter the market.
Inefficiencies and delays: Data silos, manual processes, and outdated systems can create inefficiencies that slow down operations.
Security risks: The risk of fraud or data breaches within the supply chain can undermine trust among stakeholders.
Inefficient Data Flow: Manual processes and outdated systems hinder the smooth flow of data across the supply chain.

With these challenges in mind, let’s explore how blockchain technology can address them and revolutionize SCM.

What is Blockchain Technology?

Blockchain technology is a distributed ledger system that securely records transactions across multiple computers in such a way that the recorded data cannot be altered retroactively.

This technology is decentralized, meaning no single entity has control over the information, which ensures transparency and security.

Blockchain’s applications go beyond cryptocurrency, and its potential in Supply Chain Management is increasingly recognized by businesses across various industries.

Key features of blockchain technology include:

Transparency: All parties in the network can access the same information, reducing the possibility of discrepancies or misinformation.
Security: Each transaction is encrypted and linked to previous ones, making it virtually impossible to tamper with the data.
Decentralization: No central authority controls the data, reducing the risk of fraud or manipulation.
Traceability: Blockchain allows for the tracking of goods at every stage of the supply chain, from raw materials to final delivery.

These features make blockchain a perfect fit for overcoming the traditional challenges faced by supply chain management.

Benefits of Supply Chain Management with Blockchain Technology

1. Enhanced Transparency

One of the greatest advantages of blockchain technology is its ability to provide full transparency throughout the supply chain.

With blockchain, each transaction or movement of goods is recorded on a public ledger, allowing all stakeholders to view and verify the data. This reduces the chances of fraud or errors that can occur when data is siloed across multiple systems.

For example, companies like Maersk & Walmart are already leveraging blockchain to provide end-to-end visibility in their supply chains.

This ensures that each party, from the manufacturer to the retailer, can access real-time, accurate information about the product’s journey.

2. Improved Traceability
Blockchain technology enables better traceability, which is crucial in industries where product origin and authenticity are critical, such as food, pharmaceuticals, and luxury goods.

With blockchain, every step of the product’s journey is recorded on a digital ledger. This means that businesses can trace the origin of raw materials and confirm the authenticity of products.

This not only reduces the risk of fraud but also enhances consumer trust.

Blockchain allows for real-time tracking of products, providing visibility into their exact location and condition at any given moment.

For instance, Walmart has partnered with IBM to use blockchain to trace food products from farm to store, allowing them to quickly identify sources of contamination in case of a foodborne illness outbreak.

3. Increased Security

The decentralized nature of blockchain means that data is stored across multiple nodes (computers), making it virtually impossible for hackers to alter or corrupt the information.

Each transaction is encrypted and linked to the previous one, creating a secure chain of records.

In Supply Chain Management, this level of security ensures that data related to shipments, payments, and contracts is safe from unauthorized access or tampering.

For example, De Beers, the global diamond company, uses blockchain to verify the authenticity of diamonds, ensuring that the stones are not conflict diamonds and are ethically sourced.

4. Efficiency and Cost Reduction
By removing intermediaries and automating processes, blockchain can help streamline operations, reducing administrative costs and delays.

Smart contracts on the blockchain can automatically execute payments or trigger actions when certain conditions are met. This eliminates the need for paperwork and reduces the chances of human error.

Companies like Maersk have seen significant improvements in efficiency by using blockchain to digitize documents, such as bills of lading, which traditionally require a lot of time and resources to process.

5. Faster Transactions

Traditional supply chain transactions can be slow, especially when international borders are involved. Blockchain technology can speed up the process by eliminating the need for multiple intermediaries, reducing the time it takes for a transaction to be completed.

By automating and streamlining processes, blockchain accelerates transaction times, leading to faster delivery and improved customer satisfaction

For instance, cross-border payments that typically take days can be completed in a matter of minutes with blockchain, enabling faster delivery times and reducing delays.

6. Streamlining Payments
Using blockchain for payments in Supply Chain Management can reduce transaction costs and speed up payment processing.

Companies can use cryptocurrencies or digital tokens to pay for goods, reducing the need for traditional banking systems and decreasing transaction fees.

For instance, VeChain, a blockchain platform, is exploring the use of blockchain for automating invoicing and payments in supply chains.

7. Supply Chain Resilience

Blockchain automation ensures smart, self-executing contracts with the terms of the agreement directly written into code, automate many manual processes, reducing administrative overhead and human error.

Once data is recorded on the blockchain, it cannot be altered or deleted, ensuring data integrity and security. Blockchain’s transparency and immutability make it difficult for fraudulent activities to occur.

By providing real-time visibility and enabling proactive response to disruptions, blockchain helps to build more resilient supply chains.

Challenges of Implementing Blockchain in Supply Chains

While the potential benefits of Supply Chain Management with Blockchain Technology are clear, there are some challenges to widespread adoption:

Integration with existing systems: Blockchain may require businesses to overhaul their current supply chain systems, which can be costly and time-consuming.
Scalability: Blockchain technology, particularly when using public blockchains, can face scalability issues as the volume of transactions increases.
Regulatory concerns: Blockchain operates in a decentralized environment, which can raise legal and regulatory questions, particularly around data privacy and cross-border transactions.

However, many of these challenges are being addressed through innovations in private blockchains, consortium blockchains, and government regulation.

Conclusion

Supply Chain Management with Blockchain Technology offers immense potential for transforming how goods are tracked, verified, and delivered across industries.

The technology’s ability to provide transparency, security, and efficiency can lead to more streamlined operations, reduced costs, and enhanced consumer trust.

Kreyon Systems offers cutting-edge supply chain solutions to streamline your operations. Our innovative SCM software empowers you to enhance visibility, optimize inventory, & strengthen security. If you have
any queries, please contact us.

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In SCM, every delay, error, or inefficiency can have cascading effects throughout the entire operation. Fortunately, advancements in technology have paved the way for supply chain automation, allowing businesses to streamline processes, reduce costs, and improve overall performance.

In this article, we’ll explore the top repetitive tasks in your supply chain that you can automate today to stay ahead of the curve. Here’s a breakdown of key features within supply chain automation that can transform your business:

Data Acquisition and Integration

According to a report by McKinsey & Company, companies that automate order processing can reduce processing times by up to 90%.

Optical Character Recognition (OCR): Effortlessly convert physical documents (invoices, purchase orders) into digital data, eliminating manual entry errors and saving time.
Sensor Integration: Gather real-time data from sensors on equipment, inventory, and environmental conditions for improved monitoring and decision-making.
Internet of Things (IoT) Connectivity: Connect devices and machines across your supply chain, enabling seamless data collection and communication for enhanced visibility.
Order Processing: Manual order processing can be time-consuming and error-prone. By implementing automated order processing systems, businesses can reduce processing times and minimize errors, leading to faster order fulfillment and improved customer satisfaction.

Real-time Inventory

Keeping track of inventory levels, replenishment orders, and stockouts can be a logistical nightmare. Automated inventory management systems use real-time data to track inventory levels, forecast demand, and automate replenishment orders, ensuring optimal inventory levels at all times.

Research by Aberdeen Group found that companies with automated inventory management systems experience 20% fewer stockouts and reduce excess inventory by 30%.

Automated Inventory Replenishment: Utilize software to automatically generate purchase orders based on real-time stock levels and demand forecasts, preventing stockouts and overstocking.
Warehouse Management Systems (WMS): Optimize warehouse operations with features like automated storage and retrieval systems (AS/RS), inventory tracking, and picking route optimization, leading to faster fulfillment times.
Demand Forecasting Tools: Analyze historical sales data, market trends, and seasonal variations to predict future demand with greater accuracy, enabling better inventory planning and resource allocation.

Supply Chain Visibility and Analytics

Analyzing data and generating reports manually can be time-consuming and error-prone. Automated data analytics and reporting systems use advanced analytics tools and visualization techniques to analyze data, generate insights, and create actionable reports, empowering businesses to make data-driven decisions.

Real-Time Tracking and Monitoring: Track the location and status of goods in real-time, providing complete visibility throughout the supply chain for informed decision-making.
Data Analytics and Reporting: Gain valuable insights from supply chain data to identify bottlenecks, optimize processes, and make data-driven decisions for continuous improvement.
Machine Learning (ML) and Artificial Intelligence (AI): Utilize ML and AI to automate tasks, predict potential disruptions, and optimize routes and logistics planning for greater efficiency.

Shipping and Logistics

Coordinating shipments, selecting carriers, and managing logistics can be complex and time-consuming. Automated shipping and logistics systems leverage algorithms to optimize shipping routes, select the most cost-effective carriers, and track shipments in real-time, reducing costs and improving delivery times.

Return Management: Managing product returns can be a time-consuming and costly process. Automated return management systems streamline the returns process, automate return authorizations, and track returned items, improving efficiency and customer satisfaction.
Quality Control: Ensuring product quality and compliance with regulatory standards is essential for maintaining customer satisfaction and brand reputation. Automated quality control systems use sensors, cameras, and machine learning algorithms to inspect products for defects, identify non-compliant items, and enforce quality standards, reducing the risk of product recalls and returns.

Documents Processing

Automating document management helps in creating a sophisticated digital archive that organizes, secures, and retrieves documents with lightning speed and precision.

Documents for Compliance: Managing documents, contracts, and compliance records can be a logistical nightmare. Automated document management systems digitize documents, organize files, and automate document workflows, ensuring compliance and reducing administrative overhead.
Invoice Processing: Manually processing invoices can lead to delays, inaccuracies, and inefficiencies. Automated invoice processing systems use optical character recognition (OCR) technology to extract data from invoices, validate information, and route invoices for approval, streamlining the entire invoicing process.
Expense Reporting: Manually processing expense reports is a time-consuming nightmare. Expense management software automates the process. Employees can submit receipts electronically, and the software automatically extracts data and categorizes expenses for approval. Imagine a world free from mountains of paper receipts and tedious expense reports.

AI-Driven Forecasting & Demand Planning

Accurately forecasting demand and planning inventory levels is crucial for optimizing supply chain performance. Automated forecasting and demand planning systems use historical data, machine learning algorithms, and predictive analytics to forecast demand, identify trends, and optimize inventory levels, reducing stockouts and excess inventory.

Forecasting Better: Gone are the days of reactive decision-making. Advanced supply chains harness the power of predictive analytics to anticipate demand fluctuations, identify potential disruptions, and optimize inventory levels with pinpoint accuracy.
Mitigate Risks: Effective risk mitigation strategies are essential for safeguarding supply chain continuity. This entails diversifying sourcing locations, maintaining buffer inventory, and establishing robust contingency plans.

Integrated Platform

The SCM software automates tasks like purchase order generation, communication tracking, and performance monitoring. Imagine seamless communication with suppliers, fostering stronger relationships and efficient collaboration.

Cloud-based Collaboration Platforms: Enable seamless communication and information sharing between internal teams, partners, and suppliers, fostering transparency and streamlined collaboration.
Supplier Management: Managing supplier relationships, monitoring performance, and ensuring compliance can be challenging tasks. Automated supplier management systems provide visibility into supplier performance, automate communication, and track compliance, enabling businesses to identify opportunities for improvement and mitigate risks.
Technology Integration: Embrace the power of digitalization to transform global supply chain management. Integrated technologies such as IoT sensors, cloud computing, and AI-driven analytics offer real-time visibility and predictive insights across the entire supply chain ecosystem.

Supply chain automation is revolutionizing the way businesses operate, enabling them to streamline processes, reduce costs, and improve overall performance.

By automating repetitive tasks in the supply chain, businesses can unlock new levels of efficiency, agility, and competitiveness in today’s dynamic marketplace. Embrace automation today and propel your supply chain into the future.

Kreyon Systems offers a comprehensive suite of supply chain automation for organizations to improve efficiency, reduce costs, & adapt to market demands proactively. If you have any questions, please reach out to us.

The post Supply Chain Automation: Here are Top Tasks in Your Supply Chain You Can Automate Today appeared first on Kreyon Systems | Blog | Software Company | Software Development | Software Design.

Supply chain management KPI help a company to measure, track and report key numbers of the business. It leads to gamification of the steps involved in building and delivering products and services to the customers. It leads to adoption of the best practices, analysis of the business processes and reducing the lags to achieve superior outcomes for an organisation. Here’s a look at the SCM KPI for improving the business performance:

1. On Time in Full On Request (OTIFR)

The OTIFR represents the percentage of orders fulfilled on customer’s request date. The OTIFR measures the orders completed on or before the date mandated by the customer. This metric can be used to measure the efficiency of the
supply chain.

The OTIFR is measured as:

(Total No. of Orders competed On Time)
————————————————————– X 100
(Total No. of Orders Due for Delivery)

A high OTIFR percentage implies that orders are being shipped to the customers on time. As supply chain complexity rises with international vendors and suppliers, it can be a challenge to keep supply chain costs down and deliver on time. The delivery performance metric is one which customers rate very high on their list. OTIFR measures not only the orders delivered to the customers, but also their schedules.

2. Perfect Order Fulfillment

The perfect order fulfillment rate can be used to analyse the supply chain reliability and quality. It is measured as the no. of perfect orders delivered to the customers The perfect order fulfillment reduces the inventory requirements for an organisation, it reduces return rate and hence improved capital efficiency too. The reliability, consistency and performance of a company’s supply chain is depicted with a high perfect order fulfillment rate.

The perfect order fulfillment rate is calculated as follows:

(Total No. of Perfect Orders Delivered)
————————————————————– X 100
(Total No. of Orders Delivered)

The perfect order fulfillment varies according to demands. When the demand is high, organisations typically need to put in extra efforts to keep up with the perfect orders fulfilled. Companies with matured systems can predict demand and meet the needs of the customers with agility in a reliable manner.

3. Inventory Turnover ratio

One of the most critical needs for an organisation is to keep its supply chain costs optimised. It has an impact on its bottomline. The supply chain costs could be broken down into warehousing, inventory carrying costs, customer service, transport, and logistics etc.

The supply chain performance can be analysed using metrics like:

The total net sales for an organisation in a given time period is used for calculating the inventory turnover ratio. In any given period the ratio of net sales to average inventory value needs to be optimised. When net sales are high and optimised, it reduces the inventory carrying costs, and also meets the sales needs of the company.

Inventory turnover ratio is calculated as:

(Net Sales)
—————————————-
(Average Inventory Value)

where average inventory = (beginning inventory + ending inventory) / 2

The total supply chain costs include warehousing, inventory carrying costs, transportation, damaged/returned items, customer support, compliance costs and other extra ordinary items. Typically, high inventory turnover denotes fast moving items. Apple Inc has an inventory turnover ratio of 8.67 for the 3 month period ending in June 2022. An inventory turnover ratio of 5-10 is considered good.

4. Average Cash-to-Cash Cycle

The cash flow is the backbone of any organisations, companies that operate with good net profits and cash flow rule the roost. The cash to cash cycle is the average time period required to convert resources into cash, right from the time you purchase the inventory till you receive money for the sale of your products/inventory. In short, the cash to cash cycle time represents the cash collection time for your products or services.

The cash to cash cycle should be as small as possible, a larger time window represents poor cash flow for a business. The three financial metrics used for measuring cash to cash cycle are days of inventory (DOI), days of payables (DOP) and days sales outstanding (DSO).

The cash to cash cycle time is computed as follows:

(Days of Inventory + Days Sales Outstanding) – (Days of Payables)

The smaller cash cycle time is ideal for a business. Companies like Apple typically maintain negative cash to cash cycle, infact, Apple had an average of -70 days cash to cash cycle for a period of 4 years.

Companies with negative cash to cash cycle typically collect payments for their goods in advance and even before they paid for their inventory. It also shows high market demand for a company’s products. Cash to cash cycle time is an important supply chain management KPI to evaluate cash position and market demand for a company’s products.

5. Customer Order Cycle Time

The customer order cycle time is the average time (in days) from order date to the actual delivery date of your product. Typically, companies optimise their supply chain operations to deliver their products at the earliest time with good quality checks.

The cash to cash cycle and customer order cycle time have an impact on the cash flow of an organisation. If the cash to cash cycle time is increasing, it could be due to increasing customer order cycle time. Often times, high customer order cycle time and high cash to cash cycle time could lead to poor cash flows for an organisation. The mismanagement of payables, receivables and poor inventory controls could lead to increasing customer order cycles.

With proactive supply chain automation, organisations can configure triggers and alerts at specified inventory levels. It could lead to procurement of inventory items and also alert management about any delays regarding the delivery of the products proactively.

6. Days on Hand

Inventory carrying costs impact the bottomline and profitability. But, the inventory availability is needed for delivering products to the customers. Days on hand is a metric that shows how quickly a company utilises the inventory items. It is defined in terms of the days inventory outstanding.

The days on hand metric can be calculated as:

(Average Inventory)
——————————————–
(Cost of sales)/(No. of days)

Say ABC Company owns an inventory of value $500,000 during the year 2022. The cost of sales for ABC corp is $100,000 for the same year.

Days on hand =  $500,000
———— = 5X365 = 1825 days of inventory for 2022.
$100,000/365

Companies are using automation and supply chain software for predicting customer demands to lower their inventory days. By lowering inventory costs, businesses can improvise their capital spending as well as supply chain costs leading to an improved bottom line.

7. Forecast Error

Forecasting the demand for your products is an essential step in building a good supply chain. Many companies either underestimate or overestimate demand for their products leading to supply chain issues. The best companies use accurate demand forecasting models for coming up with fairly accurate predictions for their business.

The forecast error is calculated as:
(Actual Demand – Demand Forecast)
——————————————————— X 100
(Actual Demand)

The lower the forecasting error, the better the supply chain management for a company. When companies are able to forecast the demands for their products with high degree of accuracy, it can help them right size their inventory, save capital costs and deliver products on time as per customer demands.

8. Fill Rate

Fill rate refers to the customer orders that can be fulfilled by the company from its immediate inventory without backorders, stockouts and delays. Fill rate is a metric that can affect customer satisfaction. The percentage of orders successfully shipped to the customers based on their demand from the inventory available at the company.

The fill rate is expressed as:
(Total Orders Shipped)
————————————- X 100
(Total Orders Placed)

The fill rate is expressed as a percentage of orders successfully shipped in the first shipment to the customers. It leads to higher inventory turnover and reduces customer order lifecycle time. When organisations have a high fill rate, they have happier customers. The delays in shipping products to customers often lead to an increasing no.of cancelled orders. Supply chain automation can help companies improve their fill rates without excessive inventory by right demand predictions.

9. Supplier Performance Score

Supplier standards need to be assessed for creating a smooth supply chain management system. As a company, you need to procure raw materials from your most reliable suppliers and vendors.

Companies need to evaluate their vendors and measure their performance against factors like speed, quality, regulatory compliance, return orders, geographical location, costs and discounts etc.

Companies with strong supply chain capabilities negotiate favourable terms and conditions to maintain high fill rate, cash flows and optimum product quality. Supplier scorecards and metrics can help companies figure out their best suppliers and establish long term relationships with them. Companies need to provide their product requirements to the vendors and conduct their due diligence.

The suppliers could be evaluated based on metrics like average unit cost per item Vs market rate, average time to deliver orders, return rate, payment terms, capacity, risks etc. A good vendor score can be chosen for finalising the procurement of inventory items.

10. Gross Margin ROI

Gross margin ROI is a supply chain management KPI that is used to calculate the the profitability of a company. It shows the ROI from the inventory investment. This metric becomes more pertinent in case of inflation and volatile prices, companies can use this as a measure to stay on top of the pricing for their products.

GM ROI =                                        (Gross Profit)
                     ———————————————————————
                                      [(Opening Stock – Closing Stock)/2] * 100

Companies that operate profitably generally have GM ROI of 200% or more. Many companies procure items at their lowest costs and optimise their inventory costs. The inventory items are bought as per their pricing cycles and movements to improve the profitability of the operations using SCM software. The more expensive and slow moving items are purchased as per the sales demand forecasts etc.

There are other supply chain management KPI used for creating stronger, more efficient and economically sustainable organisations.Some other supply chain performance measures used by leading companies:

Freight Cost per Unit
Accident Reports
Warehouse Cost Performance
Inventory Accuracy
Capacity Utilisation

The leading companies in retail, technology, manufacturing and other industries have mastered their supply chains delivering the goods despite all odds. Business growth is fueled by a synchronised supply chain from start to finish.

Kreyon Systems provides Supply Chain Management Software with advanced Warehousing & Logistics capabilities to improve the bottomline for businesses. If you have any queries for us or need assistance, please get in touch.

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Logistics management software is a dire need today in the fast-changing global supply chains for companies. Logistics service providers need to keep pace with real time supply chain visibility to manage third party logistics, transporters, freight carriers, and overall operations. Logistics management automation is growing owing to the ecommerce driven market demand. The on-demand delivery services for day-to-day needs are driving the push for logistics automation like never before.

The operations of logistics providers and transporters are driven by digital systems with greater efficiency and control. It is helping them integrate their business applications, map real-time freight positioning and solve logistics issues. Logistics automation is helping companies create visibility in operations, manage billing, accounting, freight delivery, inventory, and expand the business using technology to reach more customers, here’s how: 

1. Transportation Logistics

The transportation logistics segment connects the suppliers, vendors, and customer of a company. Logistics service providers can manage their supply chain, track real-time delivery of products, increase customer satisfaction & profit margin.

The use of technology for transportation, logistics and supply chain uncovers operational efficiencies as well as new business models. For e.g. logistics companies are providing same-day delivery services to ecommerce companies and their customers. The value chain optimization is creating win-win opportunities for everyone in the ecosystem. 

2. Warehouse Efficiency

The warehouse management engulfs the tracking of goods, inventory position, dispatch, returns management and delivery of items. All these processes are managed effectively using automation. Every process from the time a new item is checked in to the point it is checked out of the warehouse can be managed with software.

The logistics management software helps organisations manage their warehouse space efficiently. Using algorithms and data science, the placement of items can be optimized for frequently sold items. The space can be managed to provide greater ROI for organisations.

3. Freight Distribution

The logistics software can help organisations manage their freight distribution, the supply chain operations for delivering items to their customers. Once the customer order is received, the item can be delivered from origin to destination using logistics software. The whole process can be managed efficiently using automation.

The GPS tracking features help organizations to see the position of their dispatched goods real time. The software can also note parameters like delivery time, loading time and quality of items etc.

4. Drivers or Transporters

The logistics service providers can track the details of drivers on their platform. Once the goods are ready to be despatched to the customers, the available drivers or transporters in an originating station are chosen. The automatic order dispatch algorithm fetches the nearest drivers for the order-pickup. Kreyon’s driver app helps drivers obtain an electronic receipt of items shipped to the destination. The driver can take photos of the shipped items and quantity of items along with delivery details.

The driver or transporters app ensures that the items are delivered timely and greater accuracy. The drivers get preconfigured alerts for delivery, route maps and dispatch of goods. The dispatch and delivery details of the items are automatically updated on the logistics management software.

5. Cost Center

The logistics and shipping of items involves billing for items, fuel costs, driver costs, and tracking all other miscellaneous delivery costs. The cost center helps logistics providers manage all costs, tax receipts and compliance reports using the software. The consumption of items, fuel usage, inventory costs can be analyzed using the cost control feature.

Organizations can improve their budgeting and shipping costs analysis using logistics automation. The billing and receipts management also serves the purpose of audits and financial management.

6. Contactless Delivery
With the logistics software, the customers can feel the power of contactless delivery automation. They can order products any time any place and get it delivered to their doorstep. The contactless delivery automation is at work in the background.

The movement of goods and items from various suppliers to the customers can be managed transparently using logistics software. Logistics automation helps in proactive supply chain management to improve customer experience by reducing turnaround time and better quality of items being delivered to them. 

7. Multi-Location Distribution Channels

The logistics management software can be used to manage deliveries at across locations with ease. The back-end infrastructure and SaaS model give logistics service companies the framework for managing operations smoothly.

The delivery and distribution can be improved using technology as a driver. The goods and items can be delivered the same day using hyper location and choosing the nearest transporters on the platform. The performance management of suppliers, delivery time and quality parameters are incentivized leading to greater customer satisfaction levels. The distribution channels and locations can be scaled with ease using logistics automation.

8. Live Statistics 

The logistics management software can be used to stream live data from all devices, inventory, warehouses, vendors, suppliers, live locations of vehicles/drivers. The logistics companies can use the platform to manage their operations.

The delivery time, pending orders, live delivery routes, customer receipts, locations and etc. are constantly updated with data coming from geolocations feeds. The management can track all shipment information as and when they need. The live dashboard increases the visibility of every element in the supply chain for logistics companies.

9. Financial Integration 

The logistics management software needs to be integrated with the financial and accounting data. When financial transactions are done and recorded in logistics management software, they need to update general ledger, account receivables, account payables, profit & loss, balance sheets reports etc.

The bookkeeping transactions can be categorized and imported for financial reporting. All the financial transactions done for the logistics management should be automatically synced to the financial reports. Further, the inventory items need to be updated with every item that enters or leaves the company. The accuracy of inventory can have a major impact on financials and taxation. Good logistics automation takes care of all the financial integration and reporting for a company.

Kreyon Systems provides warehouse & logistics management software with innovations for bottomline impact. If you have any queries for us or need assistance, please get in touch.

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Supply chain management is undergoing rapid transformation with IoT technology. The use of IoT technology is bringing the digital and the physical worlds together. The mapping of physical objects in the digital space is possible with IoT technology; it is also transforming the way supply chain management solutions are developed and work.

The IoT technology makes use of sensors that are capable of bidirectional remote communication. This essentially means that assets or devices can communicate with centralised systems and update their status. These are very useful for proactive and predictive maintenance, proactive fault diagnosis and smoother operations.

As per Gartner, more than half of new business processes and systems will incorporate some element of IoT by 2020. The worldwide IoT spending will grow from $698.6 billion in 2015 to $1.3 trillion in 2019, according to IDC.

Today the IoT sensors are advanced; the devices can be controlled remotely. IoT allows the supply chain management systems to control operations remotely and execute actions based on certain parameters. Here we explore how IoT is transforming supply chain management:

1. Asset Management:

The IoT enabled sensors are helping companies to manage their fixed assets and manage their lifecycles. The fixed asset management using IoT improves tracking assets realtime. The assets like properties, plants, equipments, computer equipments, furniture etc. can be monitored using IoT enabled sensors. The automated tracking across geo locations improves asset maintenance, risk control and performance management.

2. Sales and Inventory:

A good supply chain management creates optimised products and services that improve the bottom line for the business. The IoT enabled SCM allows an organisation to map the demand of their products and services on realtime basis across locations. The manufacturing operations for the products and services are demand drive.

The operations are optimised to maximise utilisation of the inventory and procure optimally on need basis. The inventory is optimised with analytics generating from the operations on regular basis to ensure sufficient supply of products/services to the customers.

3. Improved Distribution & Warehousing:

The RFID enabled shipments from companies can be tracked using mobile devices and automated RFID scanners. The shipments can be tracked, scanned and dispatched or collected into the warehouse using smart technology. The data is then transferred to the centralised supply chain system. The process requires minimum human intervention and is highly accurate making warehousing and distribution seamless.

4. Integrated Supply Chain:

The sensor based supply chain management is able to integrate logistics, distribution, inventory, purchase, manufacturing and complete lifecycle management of data across locations and departments. The supply chain system is often integrated with finance software to keep track of ledgers, accounts payables and receivables etc. Companies can handle day to day operations using integrated supply chain systems.

The integrated supply chain is connected to a centralised system, which is a cloud based system. Organisations are able to scale production and simply manufacturing and retail operations using these systems.

5. Enhanced Customer Experience:

The supply chain management system takes care of the clients requirement processing, manufacturing the products/services and delivery to the customer. With IoT, the complete lifecycle management of the product is managed through the automated system. The product is tracked until it is delivered to the customer. The usage of clients, their key requirements and feedback is available to the planning and development teams. The IoT system ensures early quality checks to minimise product returns and timely delivery for customers.

6. Procurement & Resource utilisation:

The companies using sensor based technology can detect the utilisation of assets with greater accuracy. The system also indicates when to retire or remove assets from active use, if they are causing lot of downtime. The procurement of assets and inventory can be greatly optimised with a realtime IoT solution. The resource utilisation, usage parameters, production control etc. typically impacts the bottom line of the company.

The predictive maintenance of assets ensures minimum downtime and proper utilisation of assets. All procurement needs and purchase orders are currently mapped to existing free assets and resources.

7. Subscription based Models:

Mercedes recently launched a subscription service for its cars. Yes, you can now avail a Mercedes Benz on monthly rent in US. Mercedes is launching this service after Jeep & Porsche. Many other companies are exploring subscription based modes of distribution for their products.

The IoT platform allows the companies to operate and track all their products on a centralised system allowing them to offer subscription services. The subscription based model allows companies to reach a wider audience and scale their reach. The maintenance, insurance and all other logistics are also done using centralised IoT solutions.

Conclusion:

The IoT enabled supply chain management improves the resources utilisation, uses predictive algorithms for manufacturing to cut down on excessive production, but ensures enough stock to meet sales demand across locations. An IoT based platform achieves great efficiencies and serves the interest of the entire supply chain to maximise profitability and growth for a company.

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Supply Chain Automation means managing an optimised inventory. It means having the critical equipments in stock and keeping idle items minimised. The Airline Industry are increasingly focused towards reducing their reducing the maintenance costs, keeping a high level of inventory accuracy & deliver high levels of service. Supply chain automation is a great tool to achieve that.

The aviation sector handles items, which are capital-intensive. The items also involve a huge number of components. A lot of these components are moving, creating challenges to track the inventory accurately. The value of the inventory items is in rotable parts. These issues make supply chain management all the more challenging for the aviation industry.

1. Benchmarking and planning of supply chain activities for aviation. The key measures include forecasting the customer requirements, capacity management, analyse the demand patterns, addressing key bottlenecks like hangar space, logistics, engine maintenance etc.

2. Manage Material Request Cycle with complete analysis of requests, days to fulfill the order, delays in processing, warehouse statistics and priority levels etc. The complete lifecycle management can be optimised using SCM tools.

3. Inventory Analysis is used to determine the accuracy of stock, the quantity of items and its values. The aircraft industry is capital intensive with low profit margins; hence keeping an optimised inventory is very important. The value of the stock & the volumes are analysed. The historical records are kept for analysis.

4. Maintenance Operations are scheduled and recorded to keep track of costs. The planned & unplanned maintenance are recorded. The costs for components, time, labour materials etc are taken into account. The cost of ownership also involves effective loss with unplanned maintenance.

5. Vendor & Contract Management is integrated. The supply chain management is particularly complex keeping in mind the global vendor management. Dealing with orders, contracts of vendors from different countries and managing them transparently. The integration of components, materials, structures and systems need to ensure best results to achieve operational success.

6. Track Lifecycle of Aircrafts using SCM. The components and life of the aircrafts are managed with predictive alerts. Know when the component is due for maintenance or is past its useful life with predictive notifications. The items are tracked on a regular basis for proactive replacement of critical items.

7. Invoicing, Bills and stock management can be done with high accuracy. The invoices from multiple vendors in different countries are managed on a single platform. Ensure quality checks, receiving inventory items and processing of bills using an integrated interface.

8. Track & Measure things that matter. Dashboards, key performance indicators are used for planning. The consumption history, maintenance expenses, remaining life of components etc can be used for better capital & operational expenses planning.

The SCM system ensures not only optimised inventory, stock, streamlined procurement and improvised operations. But also results in improved turnaround time from vendors, better warranty and contract managements resulting in overall performance gains for aviation companies. The turnaround time for unplanned maintenance also improves significantly. The gaps between demand & supply can be closed leading to a lean inventory with automated replenishment.

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Supply chain management is one of the key processes to achieve an organisation’s business objectives. For some industries, it is the most important facet around which the key operations revolve. The complexity of dealing with key personnel, supply & demand of assets increases with the growth of a company. Dealing with them in the most efficient manner to maximise utilisation of resources, reduce time lag between demand & supply & ultimately having accurate data to predict things can generate tremendous value for a company.  All this can be done with automation of your supply chain management. The introduction of IT can help an organisation to benchmark its SCM with best practices tailored to their needs. A good supply chain management will ensure the following:

1. Realtime Inventory status & Asset utilisation :

It is imperative to have a realtime status of inventory items before any procurement is done. A good SCM implementation will ensure that there are no unutilised resources. The procurement takes into account what exists in the inventory & accordingly new items are purchased.

2. Reduce time lag between demand & Supply :

In large organisations, significant time is taken to complete the procurement process. The requests are routed to the procurement managers, which may involve several approvals before the purchase is finalised. At times when there is a critical requirement, an automated SCM reduces the time lag required for the purchase. The lifecycle of procurement is simplified leading to quicker availability of key items.

3. Collaboration with Vendors :

The vendors are an integral part of the SCM. A system that can automate the functionality where vendors can submit quotations, send shipment information & also replace any faulty inventory makes the procurement very efficient.

4. Predictive analysis & proactive alerts for items :

The demand & supply of items is not linear in most organisations. For e.g. in an ecommerce portal, there may be peak demands during special offers, it is difficult to manage the demand of the items without predictive algorithms. These are designed to predict loads during peak seasons or times leading to optimised inventory to meet peak demands.

5. Vendor rating & performance management :

Vendor rating & performance management helps to improve the product quality & track the received items in an organisation. If a vendor delays the delivery of the items or doesn’t meet the quality guidelines then the same can be tracked. The performance evaluation of vendors helps in enforcing quality checks for the goods, reduces delay & helps in strict adherence to terms & conditions in the contract.

6. Track all steps & status of procurement :

Automation of SCM processes leads to better outcomes & predictable results. Right from the time, an inventory item is requested to the point it is delivered and alloted to an employee. All the intermediate steps involved from the time a request for quotation is sent to the vendors, quotation submission by vendors, comparison of quotations, creating purchase order, finalising payment terms & accepting the delivery of goods. The whole process from procure to pay is optimised with digitisation of SCM.

7. Cost Reduction :

The procurement costs can be tracked & monitored for an organisation. Excess inventory & unutilised assets are reported to the management with proactive alerts. Any discrepancy in cost, deliverables or product quality can be immediately notified to the concerned authorities with a good SCM solution. There is significant reduction of cost & improvement in asset utilisation. Analytics & business intelligence software also help in figuring out any anomalies.

The supply chain management solution is the key to operational efficiency of a company. Choosing the right partner for implementation of SCM solution can enable an organisation to uncover hidden opportunities, improve service efficiency, optimize inventory and increase transparency. A good SCM also acts as a growth engine for meeting the business objectives of an organisation.

Kreyon Systems is an IT company with industry leading supply chain management for real estate, aviation, retail & other industries. If you need an SCM solution, please contact us.

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