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.
Resources:
Success of logistics and distribution chain performance relies largely on flexibility of service providers.
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