Use of Information Technology in Supply Chain Management Essay

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Use of Information Technology in Supply Chain Management Essay

Use of Information Technology in Supply Chain Management

The Use of Information Technology in Supply Chain Management purposes is very effective for transaction processing, supply chain planning, and collaboration, and for the tracking of orders and delivery coordination.

In the current business scenario, the widespread application of information technology is prominent within supply chain operations because its use is absolutely essential for the effective management and control of current supply functions.

Further, it has been observed that the drivers between these uses of IT in SCM differ and enable the organization to grow effectively without limitations. Information technology has enhanced the management of SCM and has considerably improved inventory control in supply chain efficiency.

Information technology has been very effective for the running and maintenance of smooth operations because it removes constraints from the operational processes which are necessary for important management decisions.

The coherent application of information technology solutions boosts efficiency and in the process saves valuable time and money.

Despite there being mountains of information about every aspect of the business, managers do not have the time for giving their attention to controllable or uncontrollable factors.

When products are sent to wholesalers further to retailers and then to consumers, the company starts receiving feedback and the cycle begins all over again from the beginning.

This flow of information makes business procedures and processes quite complicated because the involvement of a lot of people is essential to complete the entire process.

What is Supply Chain?

A supply chain is the collective term for the complete production and distribution of commodities, from the procurement of raw materials and their use in product development through their distribution and sale to customers.

It is a network of businesses working together to ensure the seamless operation of logistics, inventory management, transportation, and other related processes. These businesses include suppliers, manufacturers, shippers, distributors, and retailers.

IT offers the tools necessary to gather pertinent data, deconstruct it for accurate analysis, and apply it to the supply chain for maximum efficiency. Data is essential to the operation of the supply chain, largely because it gives the supply chain managers a foundation from which to make choices.

In order to maximize customer value and create competitive advantage, supply chain management include the active management of organizational procurement, logistics, manufacturing, and distribution operations.

From the acquisition of raw materials from primary suppliers through the delivery of products to final customers, and even beyond in terms of the return, consumption, or disposal of such commodities, it involves the efficient and optimal management of goods.

However, a number of events in recent years have led to major alterations in organizational perspectives on supply chains, a drastically increased concentration on the subject, and initiatives to boost the SCM function’s efficacy.

Important in Supply Chain Management

In the last two decades, business operations have been digitalized, and doing so is now required rather than a choice. why not IT combines multiple supply chain procedures carried out by many businesses. It expedites company operations and avoids bottlenecks.

Businesses, particularly those in manufacturing, are getting closer to attaining on-time procurement, reduced inventory, and improved efficiency. IT enables businesses in the supply chain to satisfy customer demands.

The core principles of supply chain management revolve around creating the ideal product in the ideal amount and delivering it to the ideal location at the ideal moment. Although it sounds easy, it may easily become challenging.

The supplies are where the supply chain begins. Manufacturers and suppliers may work more effectively together and prevent production delays caused by inadequate raw materials with the help of dependable supply chain software that enables real-time information exchange.

Normally, suppliers and manufacturers start business dealings, but if you’re a supplier, you may keep an eye on your clients’ stock levels, anticipate future demand, and make sure you’re prepared to fill requests for raw materials.

In order to make wise judgments in areas like partnership and contract management, suppliers can also leverage historical data.

Radio-Frequency Identification

The use of Radio-Frequency Identification in warehouses and stores makes it easy for organizations like Walmart to effectively communicate with clients for obtaining information which makes for quicker and better operational efficiency. The information obtained and supplied via RFID enables companies to plan their internal processes in a more effective manner.

For effective business outcomes, more and more organizations are adopting RFID technology to improve and expand their businesses.

The growth of the business adds more complexities to the operations and therefore the use of RFID technology is imperative in maintaining the best and most advantageous supply chain decisions that will support the growth of the business.

An unscheduled interruption in the supply chain means a lot of empty shelves and unsatisfied customers including massive financial setbacks for the organization which directly affects the market performance and reputation of the organization and also causes massive financial losses.

Many large companies have effectively incorporated the use of RFID technology with the appropriate barcoding systems for effective management and control of their vast retail network.

RFID technology enables the company to successfully utilize its electronic data for simplifying and supporting its varied business interests all over the world.

Role of IT in Supply Chain Management

As a result of numerous geopolitical and socioeconomic developments, such as the emergence of a unipolar world order, the predominance of market-oriented economic activity, globalization, economic liberalization, and enormous strides in transportation and communication technology, markets have grown significantly and production and manufacturing centers have dispersed.

Modern businesses place a lot of emphasis on maximizing the efficacy and efficiency of their SCM processes since they source raw materials, conduct manufacturing, R&D, and sales and marketing in geographically remote places.

As a result of this organizational focus on improving SCM effectiveness, ongoing technical advancement initiatives and the introduction of new technologies for supply chain optimization and increased organizational competitiveness have also been made.

It’s leaving its imprint all everywhere. Nothing is unaltered. It seems sense that a firm now controls every part of itself. The following points emphasize the role of IT in supply chain management.

Supply Chain That Is Integrated and Coordinated

Only when a supply chain is properly linked and coordinated can it operate effectively. By integrating various technologies and combining them to optimize the supply chain, IT completes this vital role.

Data collecting is now both possible and considerably simpler and more precise thanks to these technologies. As a result, accurate and thorough data analysis is made possible, enabling wise business judgments.

Cost Reduction

IT enables the best possible use of resources and assets. Technology is used to analyze historical data in order to better understand trends and to research them. Costs are reduced when resources are utilised as efficiently as possible.

Because it encourages all parties to use their individual resources in the most cost-effective way possible, IT plays a bigger role in supply chains. When IT is used properly, costs as a whole dramatically decrease.

Increased Productivity

The supply chain’s participants are all more productive when information flows easily, new technologies are adopted, and communication is clear and efficient.

It acts as a kind of catalyst for product movement. IT offers the link that continually sends the necessary information in place of back and forth communication.

Product Improvement

IT comprises of programs and technologies that may be utilized to raise awareness early on. In a market where customers are always looking for new products, the product must either change or it will lose its appeal.

You must bring product innovation and enhancement as soon as possible if you want to continue in business. With the use of IT, the kind and degree of product enhancement may be verified.


Information technology has permeated every aspect of daily life in the twenty-first century. It has been described as the century of technological innovation and application, acting as a transformation agent in several facets of business and society.

Information is typically understood to be knowledge that comes through education, study, or experience. Technology is used to achieve practical goals in human existence by using knowledge, material tools, and processes.

Consumers are becoming pickier in the goods and services they choose. Technology development lifecycles have accelerated under the weight of competition. By making room for economic integration, convergence has tipped the scales in favor of consumers.

Supply chain management makes it feasible for businesses to strengthen their competitive edge in today’s market.

Companies need to find innovative supply chain management solutions including load planning, route planning, modal analysis, distribution and network design if they want to stay competitive.