Monday, September 29, 2014

Incorporating Technological advances in Supply chain

In the earlier days, when a disruption occurred in the supply chain, the quick fix was pulling together a couple of people from different tasks and assigning them on the problem. Once the problem had been resolved, those people would go back to their regular jobs. However, the consumers in those days were less demanding, less aware and definitely more patient. Consumers weren’t aware of the online ordering system with the ability to track shipments to determine the expected delivery date. Companies today are under tremendous pressure to better manage the supply chain and to improve efficiency and logistics operations while remaining responsive to changing market conditions and customer demands.
With the advent of technology like email, internet etc. the consumer expectations have increased exponentially. As technological skills have become more specific, companies are less likely to pull people from their important jobs and assign them to fix a problem in the supply chain. Supply chains have become highly complex with increasing number of ingredients and components resulting in a finished product, several suppliers and customers. Organizations today need to adopt IT to support their supply chains and increase their efficiency by achieving tighter cooperation over the supply-chain.
Technology has crept into Supply chain step by step, it started with electronic invoicing, computerized shipping and tracking and automated notifications that were initially used by companies for business to business interactions and later on these features were passed on to the consumers. Technology today has extensive capability when it comes to keeping the production on track, anticipating and repairing mistakes and making modifications that guarantee a top quality product. Every link in the supply chain can be monitored simultaneously and automated notification systems are highly valuable in sending messages to several players.
IT plays instrumental role in bringing together multiple technologies and integrating them to optimize various scenarios in SCM. The Types of IT available for optimizing Supply chain management are:

  • Transaction processing: This IT is used for information exchange especially for tasks such as order processing, billing, delivery verification, sending dispatches and producing orders. IT is used for increasing the efficiency of information exchange between various supply chain partners.
  • Supply chain planning and collaborating: This type of IT is used for forecasting changes in demand, inventory information and production capacity information. The use of IT in planning and collaborating is to improve efficiency and minimize waste along all components of the supply chain.
  • Order tracking and delivery coordination: This type of IT is not only used by the            businesses but also used by consumers to track individual shipments. Businesses use this technology to track final products or in-progress inventory to coordinate their timely delivery or determining information about their location.

Supply chain today provides increased visibility and accountability and thus providing the organization with a stronger competitive edge.
Supply chain related Apps and other related features on smart phones, tablets and other mobile devices are adding portability to the supply chain management. Tablets and smartphones today have longer battery lives, keyboard functionalities, barcode scanning capability, high quality digital cameras and speech recognition ability making them an ideal fit for the warehouse operations. Wireless devices provide flexibility, mobility and convenience that allows supply chain managers to coordinate processes at every step in the chain without regards to its physical location.  Software programs and cloud computing have enhanced the tracking of products and provide real-time status updates at the touch of a button. This allows companies to adjust their production schedules and inventory levels on the go.
Four major business areas where supply chain management technology play an important role are:
  • Global Trade: Global trade involves several elements of uncertainty and changing regulations. Use of technology will keep everyone along the chain appraised of the latest updates and avoid stepping over regulations.
  • Supply relationship management: Technology will help keep all the people involved in the supply chain within the loop. By making communication automated, everyone will be made aware of the disruption in the supply chain and allow individuals take timely action to mitigate risks. Thus technology will keep everyone informed and help manage the relationship.
  • Reverse supply chain: When there is a sudden influx of new goods, manufacturers have to offload outdated goods quickly. Notification can help alert a variety of recyclers and other parties at once, allowing them to respond with times  they are available to remove redistributed goods.
  • Supply chain execution: Technology helps to smoothly execute the supply chain operations and allows everyone along the supply chain be prepared for the tasks. If an individual is unavailable it is easier to alert everyone to help save money and time.

The incremental use of IT is reducing the storage space required at the “Global Distribution Centers” while mitigating the risk of out of stock situations and back orders. The ideal situation would be sending the goods directly to customers/retailers without stocking the goods.
 This poses a question, should organizations with limited funds and cash availability invest in updating and incorporating technology in their supply chain or direct their limited funds in operations and optimizing their processes?


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