INFORMATION TECHNOLOGY FOR SUPPLY CHAIN

MANAGEMENTSUPPLY CHAIN MANAGEMENT

By Israr K. Raja

Evolution of information Technology

INFORMATION TECHNOLOGY FOR SUPPLY CHAIN MANAGEMENT

Evolution of Information TechnologyCustomer billingInventory controlPayrollAccountingPlanningAnalysisDesign

Concept of Information TechnologyAs the study of design, development, implementation, support or management of computer based information systems, particularly software applications and computer hardware.

Need for ITData TransferInformation RetrievalMachine and process control

IT Tools for BusinessProject managementComputer aided designComputer aided manufacturingComputer integrated manufacturingManufacturing execution systemManagement information systemDecision support Expert systemKnowledge ManagementEnterprise resource planningCustomer relationship ManagementSupply chain Management

IT Application in Supply chain Management

‘’ IT is the most revolutionary Driver behind the modern SCM’’

Improving relationship Management with Suppliers and delivering value to the customers.

Improving other functions of SCM .

Main Benefits of IT in BusinessReaching objectives in multiple of ways Understanding of issues well in advanceDefining set of steps to achieve the goals

Role of IT in Development of SCMManufacturing/Material Requirement planning:-CAD is used to calculate the material from drawings.

Manufacturing/Material Requirement planning II:-MIS, Database Management system (DBMS) and Relational DBMS used for data management.

Enterprise resource planning:-an integrated, multi-module application software packages designed to serve and support several business functions across an organization.

Supply Chain management:- Transaction execution, collaboration and co-ordination, decision support

Types of IT and Drivers To Use ITin SCMTYPES OF IT USE IN SCM Transaction processing

Supply chain planning and collaboration

Order tracking and delivery coordination

DRIVERS FOR USING IT IN SCM Elimination of human errors Reduction of costs Speeding up information transfer

Volume of transactions

Unpredictable and logistically demanding environment

Project-orientation of the business

In-transit delivery consolidation

Types of IT in SCMIT use for transaction processing to increase the efficiency of repetitive information exchanges between supply chain partners. In this type of IT use the exchanged information is typically related to such tasks as order processing, billing, delivery verification, generating and sending dispatch advices, and producing order quotes.

IT use, supply chain planning and collaboration, represents the use of IT for sharing planning-related information such as demand forecasts and other demand information, inventory information, and production capacity information, with the intention of increasing the effectiveness of the supply chain.

IT use in SCM, order tracking and delivery coordination, refers to the monitoring of individual orders or shipments, which may consist of components or final products, with the aim of coordinating their delivery or conveying timely information of their location.

Drivers To Use IT in SCMReduction of costsSpeeding up information transferVolume of transactionsElimination of human errorsUnpredictable and logistically demanding environment

Project-orientation of the businessIn-transit delivery consolidation

Benefits of integrated SCM toolsCreate electronic connections with their suppliers

Eliminate the paper based work.Reach full potential thruogh use of web based software and communication

Handle most of the elements involved in SCM, including procurement, communication, exchange of data and running the SC faster.

Ability to collaborate with other companies for mutual benefits

Role of internet in SCMConnecting our SC with the SCs of our suppliers and customers together in a single vast network to optimise costs and create opportunities for everyone involved, like B2B.

OTHER BENEFITS AREProviding information availability and visibility

Enabling single point of contact for dataAllowing decisions based on total SC informationEnabling collaboration with SC partners.A key benefiting from IT strategically is to redesign business process.

Issues with SCM SystemComplexityDependence on othersProcurement and implementation

E-Business

E-Business and E-CommerceIt is the term used to describe the wide range of tools and techniques utilized to conduct business in a paperless environment.

Electronic commerce therefore includes electronic data interchange, e-mail, electronic fund transfers, electronic publishing, image processing, electronic bulletin boards, shared databases and magnetic/optical data capture. Companies are able to automate the process of moving documents electronically between suppliers and customers.

The Technology of E BusinessEDIBar CodesE MailInternetWebProduct Data ExchangeElectronic Forms

Electronic Data Interchange (EDI)refers to computer-to-computer exchange of business documents in a standard format. EDI describe both the capability and practice of communicating information between two organizations electronically instead of traditional form of mail, courier, & fax.

The benefits of EDI are:1. Quick process to information.2. Better customer service.3. Reduced paper work.4. Increased productivity.5. Improved tracing and expediting.6. Cost efficiency.7. Competitive advantage.8. Improved billing.

Though the use of EDI supply chain partners can overcome the distortions and exaggeration in supply and demand information by improving technologies to facilitate real time sharing of actual demand and supply information.

Electronic Data Interchange (EDI)

Bar coding and ScannerBar code scanners are most visible in the check out counter of super market.  This code specifies name of product and its manufacturer.

Other applications are tracking the moving items such as components in PC assembly operations, automobiles in assembly plants.

Bar coding and Scanner

Advantages of E-Business/CommerceWorldwide PresenceCost-effective Marketing and PromotionsDeveloping a Competitive StrategyBetter Customer ServiceCurtailing of Transaction CostOverhead Costs Are Reduced

Disadvantages of E-Business/CommerceSectoral Limitations-Limited SectorsCostly E-business Solutions for Optimization

Question of SafetyData SecuritySite IntegritySystem Up gradationMomentary Intangibility

IT and SCMWorld is shrinking day by day with advancement of technology. Customers' expectations are also increasing and companies are prone to more and more uncertain environment.

Companies will find that their conventional supply chain integration will have to be expanded beyond their peripheries.

The strategic and technological innovations in supply chain will impact on how organizations buy and sell in the future.

A clear vision, strong planning and technical insight into the Internet's capabilities would be necessary to ensure that companies maximize the Internet's potential for better supply chain management and ultimately improved competitiveness.

Internet technology, World Wide Web, electronic commerce etc. will change the way a company is required to do business.

These companies must realize that they must harness the power of technology to collaborate with their business partners. That means using a new breed of SCM application, the Internet and other networking links to observe past performance and historical trends to determine how much product should be made as well as the best and cost effective method for warehousing it or shipping it to retailer.