Elaborate on the role of Information technology in creating an effective supply chain management?

Elaborate on the role of Information technology in creating an

effective supply chain management?

[Ainain Shahidi]

[ABMTC]

Ainain Shahidi, DBA Student, Oct 18 Batch, India.

This research was done as part of the course curriculum for DBA by Ainain Shahidi

Correspondence concerning this article should be addressed to Ainain Shahidi, Director,

SIES School Of Packaging, Nerul , Navi Mumbai 400706 E-mail: sainain2k2@yahoo.com

Elaborate on the role of Information technology in creating an effective supply chain
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Abstract

As per my understanding, The Information Technology (IT) is one of the most disruptive

innovation of this century which is changing all aspects of our life. It is revolutionizing the methods

and processes enabling us to deliver much beyond or imagination. IT ensures flawless flow of

information across the diverse sections, expands and maintain wide database for use. This is

considered a prerequisite for the effective control of today's complex supply chains.

Role of IT in creating an effective Supply Chain Management

According to the research conducted by Helsinki Univ of Technology and Helsinki School of

Economics, Finland the use of IT for SCM purposes can be divided into ;

1) Transaction Processing : This category emphasises about the use of IT for increasing the

Efficiency of Repetitive Information Exchanges amongst various SC Partners. The main focus

revolves around ;

 Eliminating human errors to Zero level,

 Speeding up information flow pertaining to Order Processing, Invoicing, Delivery

Verification, Generating & Sending Dispatch advices & producing Order Quotes,

 Cost Reduction to strengthen the bottom line,

 Handling large volume of transactions

2) Supply Chain Planning and Collaboration : This talks about the planning related information

to increase the effectiveness of Supply Chain viz,

 Demand Forecasting,

 Production Capacity and % usage,

Elaborate on the role of Information technology in creating an effective supply chain
management? 3

 Inventory Control & Management

3) Order Tracking and Delivery Co-ordination : Here the focus is on Order Tracking &

Delivery Co-ordination pertaining to the monitoring of shipments/orders with the aim of

conveying timely information of their location and co-ordinating their delivery to the final

destination.

Simchi-Levi et al (2003) explained objectives of IT in SCM as ;

1) Providing Information availability and visibility,

2) Enabling Single Point Of Contact (SPOC) of data and

3) Allowing decisions based on Total Supply Chain Information.

IT has the potential to increase profitability and efficiency by strengthening supply chains.

Collaboration of SCM & IT has brought in many Innovations and has resulted in huge overall

Efficiency Enhancement, Cost Reduction and Customer Delight. Some IT related SCM

Innovations are ;

1. Electronic Devices : Radio-Frequency Identification (RFID), Global Position Systems

(GPS), and Data Recorders have drastically improved efficiency and reduced waste for

food processors and distributors. For example, the use of RFID technology has enabled the

food industry to track inventory and to ensure that products arrive at their intended

destination.

2. Intelligent Packaging using MicroChips : Another example of Innovation that has a

significant effect on the supply chain. These innovations will continue as important trends

while retailers will be continually challenged to reduce the amount of packaging waste.
Elaborate on the role of Information technology in creating an effective supply chain
management? 4
British retailers Sainsbury and Tesco have had great success in reducing the amount of

packaging they use, which decreases their costs and contributes to their bottom line.

3. Software Systems (ERP)

 Electronic Data Interchange (EDI)

 Material Requirements Planning (MRP)

 Manufacturing Resource Planning (MRP II)

 Enterprise Resource Planning (ERP)

 Supply Chain Management Systems (SCM)

 Customer Relationship Management (CRM)

 Internet-based Software

 Data Analytics (Big Data Management)

 Artificial Intelligence, Internet of things

4. Network Infrastructure

 Wide Area Network

 Internet (for E-commerce: B2B, B2C)

5. Supply Chain Macro Processes

 Customer Relationship Management (CRM)

 Internal Supply Chain Management (ISCM)

 Supplier Relationship Management (SRM)

 Transaction Management Foundation

Conclusion
Elaborate on the role of Information technology in creating an effective supply chain
management? 5
At the outset, many companies have been migrating to the latest system for enhancing their SCM

effectiveness. The major work is going on in Retail, Automobile, FMCG, E Commerce because of

the sheer mammoth volume.

1. At the highest level, the SCM macro processes will continue to drive the evolution of

enterprise IT Software. IT Software focused on the macro processes will become a larger

share of the total enterprise software market. Functionality, the ability to integrate across

macro processes, and the strength of their ecosystems, will be keys to success

2. Artificial Intelligence and the Internet of Things

3. Distributed Inventory

4. Stronger Security Measures

5. Cloud based SCM Solutions

6. Autonomous Mobile Robots for Warehouse Management System

References :

Salin, V. 1998. “Information technology in agri-food supply chains.” The International Food and

Agribusiness Management Review 1(3): 329–334.

Welt, B. A., and J. Emond. 2008. RFID—Making It So...with Some Help from the University of

Florida. Gainesville: University of Florida Institute of Food and Agricultural Sciences.

http://edis.ifas.ufl.edu/ae286.

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Elaborate on the role of Information technology in creating an effective supply chain
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