Sunday, March 9, 2014
Role of Technology and the Web on Global Supply Chains
Technology has changed every aspect of the human life and supply chain is no different. Technology has not only affected the way the governance system work but has significantly affected the businesses and their supply chain systems. We have moved from the traditional brick and mortar to mail order to the current online method of business.
The technologies have helped the business to link the customers and the sellers directly in the supply chain network. Internet Technologies which include automated purchase order systems, public exchanges etc has helped in day to day supply chain of the business globally, cutting the cost of both supply chain management and carrying out the supply chain functions.
Most organization use the web technologies to establish an internal network among its employees or to link few authorized people outside its organization who are need in its supply chain network. The technology has advanced in such a way that the member of a supply chain network can find any reliable information they need in order to complete the supply chain of the business, which reduces the cost and saves time as well. With the use of technologies, many tools have been developed as a supporting platform. These include applications such as:
a. electronic mail, search engines, portals, collaborative tools
b . electronic Data Interchange(EDI)
c. database management systems (DBMS)
d. enterprise resource planning (ERP) systems
e. geographical information systems (GIS)
f. radio frequency identification (RFID) tags
g. wireless and mobile technologies
h. web 2.0 technologies
Taking Dell as an example, we can see the how technologies have affected the Dell’s supply chain. Dell uses server to server communication over internet to make a co-ordination between the supplier and the customer. It enables the customer to shop online with the use of Customer Procurement Application where data consistency is maintained. Dell’s EDI technology is a software which not only connects the customers to the Dell but also to the direct suppliers of the raw materials.
The customers are given choices to access their catalog in order to retrieve their personal configurations. Thus the customer catalog is maintained by the sales representative. The customers can facilitate shopping using internet browser, where by the order requisition from the shopping cart of the customer is sent to the customer ERP system for the processing of the same. An acknowledgement is sent to the customer by the electronic automated order processing system.
When an order is placed by the customer, the customer service at the Dell links its real time inventory where the offers are given to the customers based on their latest inventory data such as marketing the old stocks at lower cost or be it marketing the new products at higher cost or giving some discount on some particular product as an value added service. The customers are given direct access to view real time status of their order, the invoice and the purchase history details.
Hence without the technology the supply chain of Dell would not have been possible. Moving from the mail order days to the world of internet, today technology is the lifeline to this computer company. Dell has a strong hold at both the input and output end of the supply chain. It goes without saying that the costing of Dell computer is considerably lower compare due to the absent middle man and ordering personnel, low inventory, and of course the huge database that is collected without any additional effort.
IT has brought efficiency to this type of supply chain.