Advances in information technology have influenced the manner in which businesses operate their global supply chain. In particular, supply chain management would be inexistent without the developments in the aspects of communications and computing power. Information systems significantly play a critical role in the management of supply chain since they provide the linkage to the diversity and almost geographically diffused elements of the supply chain. Inventory is replaced by information within the supply chain and is a crucial factor for the several strategies related to postponement, continuous replacement and other strategies that are time-based competitive.
The utilization of the EDI or electronic data interchange has been a standard for global firms to efficiently operate their global supply chain. Other technologies that deliver the needs of a business to alter their global supply chain operations include the barcode technology, data warehouses, satellite tracking, radio frequency identification and a number of input and output devices. When putting together, these technologies could allow precise information to be gathered, accumulated, processed and communicated in an efficient and in a timely manner. As such, without sufficient exchange of information, coordination within the global supply chain would not occur.
As a result, the management of supply chain is enhanced with the coordination and communication among the diverse members of the supply chain or the channel of distribution of a firm or an organization. These coordination improvements through the aid of information technology lead to further efficiency in the management of materials resulting in a huge reduction in supply chain inventory, shorter times of cycle and increased flexibility and responsiveness of the entire supply chain.
Check this video presentation about Information Technology in the Supply Chain and learn more about IT use in SCM, define IT framework, understand customer relationship management, explain the supplier relationship management (SRM) and understand the transaction management.
Moreover, the outcome of better communications plays a significant role in the development of innovative products and services of a business and reduced lead-times from conception to marketing. Skills of the people operating in the supply chain are also enhanced with the capability of information technology that adds value to the firm or business organization. However, a business enterprise must recognize the difficulties associated with integrating information technology within the supply chain to avoid the inefficiencies associated with errors that could result in a number of barriers to developing harmonious working relationships within the organization. In this sense, the business enterprise must fully understand the requirements of integrating information technology within the vicinity of its global supply chain so that there would be no problem with regard to its implementation in different territories.