advantages of information technology in supply chain management

Wal-Mart has entered into retailer-supplier partnerships known as vendor managed inventory (VMI) systems with a large number of its major suppliers. Innovative companies have sprung up to harness the power of the IT, making it easier than ever for logistics managers to track and manage international shipments, and to serve their changing needs as they reach ever further across the globe to source goods. At the same time, these VMI partnerships have improved the suppliers’ on-time deliveries while increasing their inventory turnovers , and demonstrate how information sharing leads to mutual advantage for both parties in such partnerships. Supply chain management is a crucial term that emerged in business in the 21st century. Because, today companies are often not considered independent entities, but parts of multi-company, multi-echelon networks, i.e. ( Log Out /  MBA Skool is a Knowledge Resource for Management Students & Professionals. In most new initiatives adopted by organizations, IT has played a pivotal role in ensuring the chances of success and reaping the expected benefits. Change ), You are commenting using your Twitter account. It actually allows the suppliers, given the easy access to information on consumer transactions and buying patterns, to themselves take responsibility for the sales and marketing of their own products within Wal-Mart stores. It helped in increasing visibility and control over the supply chain hence increasing production efficiency and customer satisfaction. IT provides the tools to gather this information and analyze it to make the best supply chain decisions (Chopra & Meindl, 2013). 0000002906 00000 n trailer The adoption of IT to support the supply chain management can be seen either as a way to provide efficiency savings, or as a strategic response either driven by necessity or due to competitive pressure. supply chains, delivering goods and services to the final customer. Chopra, S. & Meindl, P. (2013). Information is crucial to supply chain performance because it provides the foundation on which supply chain processes execute transactions and managers make decisions. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. To support effective supply chain decisions, information must have the following characteristics: Information must be accurate, must be accessible promptly, must be of the right kind, and must be shared (Chopra & Meindl, 2013). In summary, information is crucial to making good supply chain decisions at all three levels of decision making (strategy, planning, and operations) and in each of the other supply chain drivers (facilities, inventory, transportation, sourcing, and pricing). ( Log Out /  0000002068 00000 n Sensor data such as abrasion, temperature, humidity, or brightness can be measured automatically for each transport unit and stored on the RFID chip. Change ), In all the information sharing that takes place in SCM, however, there is a need to ensure that the information flow is accurate and reliable. %PDF-1.4 %���� PROMINENT CHANGES IN ‘IT’ ENABLED TRADE SCENARIOS. Yet another improvement offered by reliable, real-time IT enabled supply chain is that it provides the basis for in-transit inventory financing, by providing access to electronic trade documents and on-line visibility to the actual movement of inventory. Using IT systems to capture and analyze information can have a significant impact on a firm’s performance. The content on MBA Skool has been created for educational & academic purpose only. In short, information provides supply chain visibility, allowing managers to make decisions to improve the supply chain’s performance (Chopra & Meindl, 2013).

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