Information Processing Technology for Supply Chain Management

Introduction

Data plays a crucial role in coordinating business processes in supply chains. Information flow links participants in a supply chain and various functions, as well as connects decision-making levels for management. For example, information about the demand for products is used to design the production schedule. The level of stocks significantly affects the lead time of the order in the supply chain.

Information on operational changes in demand affects changes in tactical plans for supply, production, and procurement. Warehouse management information allows to significantly improve the efficiency of inventory management and the level of interaction with suppliers and customers. It means that data and its maintenance is crucial for the organization’s effectiveness and structuring of its processes

Main body

Effective information management is impossible without the introduction of information systems. It is the development of information technologies that make it possible to realize the ideas of managing supply chains. A unique role is played by corporate information systems. The choice of such a system, which is introduced many years and becomes the information base for making decisions on enterprise management, should be implemented by the strategy of competitive behavior of the enterprise. For example, many automotive and computer concerns that work on individual customer requirements directly, actively invest in information systems based on Internet technologies that allow the clients to configure the product online. Moreover, these data are transferred to the ERP system of the focus company.

The development of the concept of information technology is the final step in the construction of a supply chain management system. According to Hazen, Boone, Ezell, and Jones-Farmer (2014), the creation of a common information space like integrated planning for the entire supply chain is an essential component of the supply chain management concept. The development of the concept of information technology for the management of supply chains is also crucial.

It is mostly determined by the decisions made at the stages of business process re-engineering and the development of an integrated planning and management model. In connection with these, various options are possible to build an information support system for the supply chain management.

Researchers note that the main objectives of using information technologies for supply chain management are to achieve the necessary level of information openness in relation to needs and to implement capacity utilization and stock levels in the supply chain (Qrunfleh & Tarafdar, 2014).

They also underline the significance of forecasting demand, capacity planning, monitoring of business processes, and timely identification of deviations and irregularities in the functioning of the supply chain. Information technologies, on the one hand, ensure the implementation of business processes both within the enterprise and at the inter-firm level and, on the other, are a catalyst for the development of business concepts. According to Liu, Wei, Ke, Wei, and Hua (2016), the whole set of information technologies for the coordination of supply chains can be divided into four groups:

  • Information technology for in-house planning and operational management:
    • Enterprise Resource Planning (ERP).
    • Manufacturing Execution Systems (MES).
    • Warehouse Management Systems (WMS).
    • Integrated Budgeting Systems based on Business Intelligence (BI).
  • Information technology for planning and operational management at the supply chain level:
    • Advanced Planning Systems (APS).
    • Supply Chain Event Management (SCEM).
    • Supply Chain Monitoring (SCM).
  • Information technology for the technical infrastructure of the supply chain:
    • Radio Frequency Identification (RFID).
    • Trace and Tracking – a system for tracking routes,
    • Geoinformation Systems (GIS).
  • Information technologies for the technical implementation of analytical processing and data transmission in supply chains:
    • Business Intelligence (BI): On-Line Analytical Processing (OLAP), Data Mining, Decision Support Systems (DSS).
    • Electronic Data Interchange (EDI).
    • Extensible Markup Language (XML).

Conclusion

Information is crucial for the maintenance of business processes within a supply chain. To perform data management, it is necessary to utilize information technologies and systems. This measure can help to achieve information openness, monitor the operations within the organization, and create an integrated planning model. For this purpose, several types of technologies may be used including those used for operational management, analytical processing, technical infrastructure, and in-house planning.

References

Hazen, B. T., Boone, C. A., Ezell, J. D., & Jones-Farmer, L. A. (2014). Data quality for data science, predictive analytics, and big data in supply chain management: An introduction to the problem and suggestions for research and applications. International Journal of Production Economics, 154, 72-80.

Liu, H., Wei, S., Ke, W., Wei, K. K., & Hua, Z. (2016). The configuration between supply chain integration and information technology competency: A resource orchestration perspective. Journal of Operations Management, 44, 13-29.

Qrunfleh, S., & Tarafdar, M. (2014). Supply chain information systems strategy: Impacts on supply chain performance and firm performance. International Journal of Production Economics, 147, 340-350.