How much does developing supply chain management software cost?

A scaling business is prone to failure unless it implements supply chain management software to streamline operations. 

IBM reported that businesses are 23% more profitable when implementing advanced supply chain management capabilities. 

And now comes the difficult question: How much does developing supply chain management software cost? The short answer: anywhere north of $30,000. A detailed discussion of which factors contribute to the cost, the best practices, and how to reduce the development cost follows!

What is supply chain management software?

Before discussing the cost of supply chain management software, let’s first discuss what it is. At its core, a supply chain management software is a set of tools that help plan, manage, and optimize the flow of goods, data, and finances across their supply chain. 

It features logistics, inventory management, production planning, demand forecasting, and supplier relationship management. It offers a bird’s-eye view to determine bottlenecks and real-time tracking.

How much does supply chain management software cost?

So, how much does supply chain management software cost? While it greatly depends on the scope of supply chain management software that you need to develop, we can provide you with some estimates based on the company size:

If you’re looking for small-scale supply chain management software with basic features, you can expect to pay around $30,000 to $50,000. 

The cost will increase to $50,000 to $150,000 if you want modern features included in your supply chain management software. 

Lastly, if you are looking for an enterprise-level solution, you can expect a supply chain management cost of more than $150,000.

Factors affecting the cost of building a supply chain software

Various factors play a role in estimating the supply chain management software cost. Let’s take a look at some of them:

Technology Being Used

There are different ways you can have your custom supply chain software developed. However, this is an important decision. Why? Because the emerging technologies can be quite beneficial in the long term. But, at the same time, they might cost you more. Some options include blockchain, machine learning, or artificial learning. You could choose to go the conventional way, which is cloud computing. 

Development Approach Used

Will you be hiring resources in-house? Will you be outsourcing the entire project? If you are outsourcing, are you outsourcing to a local development company or an offshore development company? Are you hiring freelancers?

These are just some surface-level questions, but they will significantly impact the cost of your supply chain management software. Our recommendation? Consider working with an offshore development company to save massively on costs.

Scope Of The Project

A supply chain management software, by definition, is already quite extensive in terms of features. However, you might choose to augment it using AI features that would help reduce human errors. However, it would cost you more. The question becomes what is needed right now and what can be added later to your suite of features. 

As a rule of thumb, the more extensive the feature set, the higher the cost since more development hours would be needed along with hiring of specialized resources.

Training & Implementation

Supply chain management software is not something you can deploy immediately. You will have to train your employees and also need help with the deployment of such extensive software, both of which add to your cost.

Do You Want It To Be Scalable?

The answer to that question, almost always, is yes. The cost will go up depending on the kind of scalability you need. That’s because the right infrastructure needs to be in place to ensure that the software can scale with your operations and doesn’t break during the scaling.

Support & Maintenance

The cost of your supply chain management software isn’t limited to its development. A decent chunk of it will be allocated to ongoing support and maintenance of the software. 

This includes bug fixes, updates, and new features to ensure that your software offers long-term functionality.

Design (User Interface)

Your supply chain management software will be used by different teams, each with its own requirements and goals. Therefore, the design and especially the user interface for each team would be crucial. Since all of these screens would have to be designed, it would also add to your overall development cost.

Must-have features to build the supply chain management software

Even if you’re going for a custom supply chain software, there are a few features that are non-negotiable. They include the following:

• Order Management
• Transportation Management
• Inventory Management
• Procurement
• Supply Chain Analytics
• Warehouse Operations

Order Management

A supply chain management software isn’t complete without offering order management. Orders drive your business, and whether you’re a small or large business, ensuring that orders are being optimally managed is crucial. 

A typical order management feature will cover your order processing, fulfillment, and tracking.

Transportation Management

This feature helps you carry out route optimization, thereby reducing delivery times and, eventually, cost. Your manufacturers can use it to ensure that they are choosing the right carriers. Furthermore, by incorporating freight tracking, you can always track shipments and identify any delays in a timely fashion.

Inventory Management

Managing your inventory is the key to success in supply chain management. Supply chain management software that offers inventory management can help you keep track of your inventory while providing insightful data. 

You will be aware of inventory information across all distribution centers and warehouses. Additionally, it helps you create your demand forecast to ensure streamlined operations.

Procurement

Another key feature of your supply chain management software is procurement. It will help you conduct performance evaluations, process payments, and create contracts. 

You can also use this to collect quotes and request proposals, simplifying the entire process for all stakeholders.

Supply Chain Analytics

This feature ties everything together for your supply chain management. It will help you get all the relevant information from a single (or multiple) dashboard. You can use it to identify patterns and trends and figure out where bottlenecks are happening. Furthermore, you can use this to do demand forecasting, flag potential issues, and streamline your operations.

Warehouse Operations

Another must-have feature is that of warehouse operations. This feature can help you optimize how your warehouse is managed. From receiving goods to order dispatching, it covers everything. You can easily use this to streamline your incoming and outgoing deliveries. 

Breakdown of supply chain management software cost

The supply chain management software cost is dependent on many factors, as already discussed. However, to help you get a sense of the starting point for this venture, we are going to tell you the estimates based on your company size:

• Small Business – $25,000 – $50,000
• Medium-Sized Business – $50,000 – $100,000
• Enterprise-Level Business – $100,000 – $500,000

Tips to reduce the cost of building supply chain management software 

As you can see, regardless of the size of the business you’re running, the supply chain management cost is on the higher end. Therefore, it makes sense to talk about different ways that can help you keep the cost of building on the lower end. 

Monitoring The Cost

It’s always a good idea to keep track of your expenses, especially when it comes to developing a custom supply chain management software. By doing so, you will be able to identify any potential adjustments when and if needed. 

Focusing On Essential Features

Another way of reducing the initial development cost of your custom supply chain management software is to limit the features. You should kick things off with only the most basic of features to keep the development cost low and easily push the product out in the market. 

Opting For A Modular Approach

This is more of a development practice that should be employed. A modular approach helps you carry out easy and cost-effective updates, scaling, and maintenance in the long run. Each component is added to your supply chain management software as a module that can be treated individually and independently if there’s a need, thereby reducing the overall cost. 

Implementing The Use Of Automation

Automation is the rage right now and for valid reasons. It can help you significantly cut down costs when you’re in the development stages and even post-development. Some of the areas where you can think of implementing automation include the testing of your software and routine tasks that are otherwise resource and time-intensive.  

Investing In Cloud-Based Technologies

When you’re investing in cloud-based technologies, you’re essentially investing in technology and helping to cut down your long-term costs. In addition, you are also relying on open-source technologies that help you save in terms of licensing fees. 

Outsourcing To An Offshore Development Company

The most significant cost saving, however, comes from outsourcing the development to an offshore development company. That’s because you are not incurring the costs associated with resources (if you hired them) and are not taking on any operational hassles. 

How can Coding Crafts help in supply chain management software development?

Coding Crafts has the right development team in place with veteran project managers who have successfully delivered custom supply chain management software for all sizes of companies. As a result, we are in a vantage position of knowing what works and how to make the entire process more budget-friendly. Get in touch with us today to learn more about how we can help you with your supply chain management software development!