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How IT can be applied in Supply Chain Management
Electronic Commerce: It 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.
Electronic Data Interchange: 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.
Better customer service.
Reduced paper work.
Increased productivity.
Improved tracing and expediting.
Cost efficiency.
Competitive advantage.
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.
Bar coding and Scanner: Bar 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.
Data warehouse: Data warehouse is a consolidated database maintained separately from an organization’s production system database. Many organizations have multiple databases. A data warehouse is organized around informational subjects rather than specific business processes. Data held in data warehouses are time dependent, historical data may also be aggregated.
Enterprise Resource planning (ERP) tools: Many companies now view ERP system (eg. Baan, SAP, People soft, etc.) as the core of their IT infrastructure. ERP system have become enterprise wide transaction processing tools which capture the data and reduce the manual activities and task associated with processing financial, inventory and customer order information. ERP system achieve a high level of integration by utilizing a single data model, developing a common understanding of what the shared data represents and establishing a set of rules for accessing data.
Benefits of IT application in Supply Chain Management
Streamlining—Communicate and collaborate more effectively with suppliers worldwide.
Connecting—Make the connection between what your customers want and what you produce.
Analyzing—Analyze your supply chain and manufacturing options and choose the plan that makes best use of your assets.
Synchronizing—Synchronize the flow of your batch production by managing the capacity of vessels, tanks, and lines-and the flow between them.
Communicating—Improve your communication and collaboration with suppliers worldwide.
Designing—Create the optimal supply chain network and adapt the network to keep pace with changes in your business.
Transforming—Transform processes inside the warehouse and across the supply chain to meet demands for new efficiencies.
Understanding—Get a better understanding of your warehouse labor activities and implement the changes you need to optimize worker performance.
Maximizing—Maximize warehouse profits by using advanced costing, billing, and invoicing capabilities.
Optimizing—Optimize your day-to-day fleet performance to reduce costs and improve customer satisfaction.
