Tuesday, February 18, 2014

INFORMATION TECHNOLOGY & SUPPLY CHAIN

INFORMATION TECHNOLOGY & SUPPLY CHAIN

In the current times, supply chain is viewed as digitally enabled inter-firm process capability based on the extensive use of information technology as the mode for sharing information and products.[1] This ability is enabling firms to integrate both upstream and downstream the supply chain as well as within the firms, a shift from traditional physical connections. Most of the firms are taking benefit of this free virtual resource to improve their performance by achieving a higher level of efficiency. This use of technology is also helping firms to shift from single-supplier situation to multi-agent supplier networks leading to lower costs based on increased competition. Companies are benefitting from the availability of dynamic networks – a big support in their struggle for zero waste and minimized costs.[2] This use of technology is also providing companies with an access to their customers to get a direct feedback helping more efficient and effective product development and better demand forecasting. Information technology has linked the sources and sinks with the use of a common platform and easy, cheap and transparent linkages.

Getting into detail as how information technology is actually serving for the benefit of supply chain a white paper issues by Intermec, a manufacturer and supplier of automated identification and data capture equipment, refers to top ten technologies impacting supply chain:[4]
  1. Comprehensive connectivity – wireless LAN technologies, cellular networks & bluetooth
  2. Voice and GPS communication integrated into rugged computers
  3. Speech recognition
  4. Digital imaging
  5.  Portable printing
  6.  2D & other bar coding advances
  7.  RFID
  8.  RTLS (Real Time Location Systems)
  9.  Remote management
  10. Wireless and device security

The question arises that if these huge investments in information technology based supply chain networks are brining enough returns to make them feasible, if not then why companies are still investing these fortunes? Research on this query results in a mixed feedback - Over 45% of IT-based SCM projects fail or yield disappointing results (Business Wire b, 2003). Another study found out that 33% of firms fail to correctly assess the returns from supply chain efforts (Cook and Hagey, 2003).[5]   





[1] http://rady.ucsd.edu/faculty/directory/zhu/pub/docs/papers/paper1_ISR08_IT%20in%20supply%20chains.pdf
[2] https://www.inttra.com/Assets/News/News_458.pdf
[3] http://www.clermiston.com.au/Supply%20Chain.htm
[4] http://www.mirnah.com/images/White_Papers/Trends_SupplyChain/Top10Tech_wp.pdf
[5] http://www.ipsera.com/assets/documents/160.pdf

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