How And For What Purposes Do Companies Use Information Technology In Supply Chain Management?”

1265 words - 6 pages

Abstract

In order to survive and beat the competition in today’s competitive world, one has to manage the future. Managing the future means managing information. In order to deliver quality information to the decision-maker at the right time and in order to automate the process of data collection, collation and refinement, organizations have to make Information Technology an ally, harness its full potential and use it in the best possible way. IT is beneficial for cooperation and integration within the stakeholders of the supply chain.

1.0 INTRODUCTION

Today companies are often not considered independent entities, but parts of multi-company,multi-echelon networks, i.e. supply ...view middle of the document...

Second, the research design is presented, followed by the presentation of the findings of the study. Finally, in the last two sections, the main findings are summarized and discussed and the concluding remarks are drawn.

2.0 Literature review
Our literature review on SCM as well as on the IT solutions developed for SCM showed that the definitions for these two concepts are ambiguous. Therefore, we will first give our definitions for these terms and then proceed to discussing the relevant previous research.

3.0 Definitions
SCM refers to the practices and processes aiming for effective and efficient flow of materials and information between a company and its immediate suppliers and customers. This definition has a twofold justification. First, recent empirical studies have shown that management and integration of supply chains only rarely extends beyond the first tier suppliers and customers. Second, this definition corresponds to the perception our case companies have on SCM.
As for IT systems, when discussing the use of IT in SCM, we refer to the use of interorganizational systems that are used for information sharing and/or processing across organizational boundaries. Thus, besides internal IT systems such as Enterprise Resource Planning systems, we also exclude identification technologies such as RFID from the scope of this study.

4.0 Challenges in Supply Chain Management
Current supply chains are growing in complexity due to several factors. We, the customers, are demanding innovative products at the right time and at a reasonable price. This creates challenges for companies since creating both responsive and cost-effective supply chains is critically difficult. I find these challenges exciting and that’s why I decided to pursue a career in the field. Let me expand on today’s main supply chain challenges.

4.1 Globalization
One of the biggest challenges that companies are facing is how to reduce their supply chain cost. In order to satisfy customers’ price expectations, companies have opted to relocate manufacturing to low cost countries around the world in an effort to reduce direct and indirect costs and to minimize taxes. But, having global suppliers contributes significantly to complexity that comes from extended delivery lead times. Customers not only want lower prices, but they also want their products on time.

4.2 Customer Preferences
As stated above, global supply chains are complex. Add to that product features that are constantly changing, and the challenge is even greater. A product is released and customers rapidly pressure companies to come up with the next big thing. Innovation is important since it allows companies to stay competitive in the market, but it’s also a challenge. To enhance a product, companies have to redesign their supply network and meet market demand in a way that’s transparent for customers.

4.3 Market Growth
Another factor that presents a challenge is the pursuit of new customers. The...

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