Tuesday, September 30, 2014
Reliability, accuracy and security with internet and technology in SCM
IMPORTANCE OF INFORMATION TECHNOLOGY FOR
EFFECTIVE SUPPLY CHAIN MANAGEMENT
In today’s world, there is lot of competition in every industry and every field. To survive and beat the competition, it is important for non – IT sectors of the industry to incorporate information technology in their systems to obtain edge over others. IT is very beneficial for cooperation, interaction and integration within different systems and stakeholders in supply chain system.
Any supply chain management has to take care of flow of products and information between different members of the supply chain network. The different organizations which are a part of supply chain network are suppliers, producers, service providers and customers. All these organizations work together to make the final product available to the user. Every product has to go through the entire supply network to be available for sale. The organizations are linked together to acquire, purchase, manufacture, assemble, and distribute goods and services from the starting supplier point to user.
The cost and availability of information technology helps expedite the operations and give accurate means to optimize the sales. Organizations can move towards concept of e-commerce which gives the capability of doing the transactions online using technologies such as electronic fund transfer, electronic data interchange, bar codes, CD-ROM catalogs, etc. Almost all the information can be recorded electronically and the transactions are performed with minimum human intervention. The information about orders, transactions, transportation, inventory and other supply chain factors can be stored in databases and can be easily used when it is required. With the use of information technology in supply change management, the need to constantly monitor inventory levels, place orders, track transportation vehicles and expedite the process will become obsolete.
In a supply chain network, there are many parties which need to interact with each other. The suppliers, producers, service providers, and customers need to be in a loop where they are continuously fed with real time information. Realizing the importance of inter organization communication and interaction, the different organizations implementing forms of inter-organization information system. The inter-organization information systems reduces cost, improves productivity and gives efficient insights into product or market strategy.
Along with the technology, the internet also plays a pivotal role in today’s world in supply chain management. Online market places reduces cost of supply chain networks. The web based supply chain is available to everyone, increases transparency and increases speed of transaction. Parts of supply chains can rapidly and dependably find the particular data they need to finish a trade of products or benefits, and get quick payment.
Through the internet, the buyer can directly find the item which he is looking for and place the order online with the supplier. The consumer also gets the advantage of tracking the package online. Other services which the consumer receives with online supply chain network are ability to contact the vendors for customer service problems, alterations in the delivery, change in address, etc. The internet allows the supplier to receiver orders from international customer. A popular use of internet in supply chain network is in transportation. Shipment pickups and delivery can be more accurately monitored with the internet and different technologies used together.
The use of internet in SCM is rapidly increasing. The important aspect of successful SCM is accurate and fast information about a wide range of areas such as inventory, transportation, customer service, purchasing, production scheduling, order processing, and vendor operations. The internet gives the supply chain network an ability to react quickly to the market changes and adjust its management in various areas. Thus, the technology and web gives an angel of reliability, accuracy and security to supply chain management.