Information Technology in Supply Chain Management

Abstract

Operating in the environment of the global economy requires structuring the key business processes and managing the global supply chain efficiently. The adoption of IT innovations as the tools for improving the company’s performance in the selected domains, though often overlooked, can be viewed as an opportunity to gain competitiveness in the global economy.

Introduction

The effects that technology has on the development of a company’s supply chain and business processes can hardly be underrated. Studies show that the issue of information acquisition, processing, and the further application seems to be the topical issue in the contemporary global supply chain management and companies’ operations (Ha et al. 554). Particularly, the phenomenon gains an increasingly large significance when it comes to identifying the tools for communicating with suppliers and managing business processes (Lotfi et al. 301). The study aims to analyze the effects of IT on SCM and business processes, whereas the objectives include the location of the internal and external factors and the analysis of a business case.

Literature Review

At the logistics level, for instance, it is imperative that the required data regarding the delivery of supplies, the possible obstacles on their way (e.g., the transportation issues, the lack of funding, etc.), and other problems related to the relationships between a company and its suppliers, needs to be transferred within a relatively small amount of time so that the quality of the precuts or services provided should not drop. In other words, the adoption of IT on the logistics level facilitates high customer satisfaction rates among the target denizens of the population, therefore, making the company popular and contributing to an increase in its competitiveness.

Similarly, the adoption of IT tools allows for notifying every single member of the chain of a certain problem that needs to be addressed or taken into account (Sabherwal and Jeyaraj 3). The given characteristic of IT is especially essential in the realm of the contemporary SCM, where supply chains may be huge and embrace a variety of organizations as well as the affiliates thereof. There is no need to stress that the lack of awareness concerning a certain issue triggers an immediate drop in the company’s productivity rates due to the repeated errors in the production process (Xu, Benbasat, and Cenfetelli 778).

Apart from affecting the way, in which entrepreneurship performs in the global arena, the use of IT tools may also create the conditions that can be defined as rather favorable for running the company’s business processes. First and most obvious, the adoption of the corresponding IT tools helps categorize the existing data and prioritize the tasks so that the business process could flow uninterrupted and that every stage thereof should be completed successfully. Furthermore, the incorporation of IT devices into the business processes framework permits prioritizing the tasks to be completed; as a result, the long-term goals and the short-term ones can be differentiated.

In addition to structuring the workflow, the adoption of IT tools in the environment of a business company will help analyze the recent experiences and locate the strategy that suits the entrepreneurship best in the setting of the designated market. The application of certain IT devices may help simulate the scenarios that a firm may experience when entering the global market; thus, the patterns for the decision-making model to be created for the target environment can be identified and used appropriately (Khanam, Siddiqui, and Talib 2437). Thus, the staff will undergo the training session that will prevent possible misconceptions from occurring and increase the chances for the firm to take the desirable niche in the market under analysis.

Case Study

Problem

Although Nestle has been among the leaders of the food industry, its competitiveness rates needed to be sustained with the help of a top-down strategy.

Solution

Nestle has developed the global IT platform that could deliver the required data across the globe within the shortest amount of time possible and, therefore, keep every single member of the organization updated on the operation of the system. The GLOBE program served as the tool for the standardization of the essential processes within the firm, including the external (i.e., SCM-related) and the internal (production-related) ones.

Results

The GLOBE program as the extension of the lean approach adopted by Nestle turned out to be a huge success. The organization of the technical process, which occurred according to the top-down approach mentioned above, helped coordinate the actions of the staff members in ten reference factories, at the same time providing the local managers with enough room for making company-related decisions independently. Thus, sustainable development of the company was facilitated with the acceptance of IT tools into the framework of the operations within the entrepreneurship (“Nestlé Continuous Excellence: Lessons for Driving Performance Improvement” par. 13).

Conclusion

Although the importance of IT tools used for contemporary businesses, especially those operating in the global market, is fully acknowledged in the modern business world, there seems to be a lack of understanding of the potential that a business equipped with IT innovations has. Information management, including its stages such as the acquisition of data, its organization and processing, the transfer thereof to the company members, and its application to a particular problem, is a crucial part of any firm working in the global market. Therefore, appropriate tools must be used to retrieve the necessary data.

Works Cited

Ha, Oh-Keun, Yong-Seok Song, Kyung-Yong Chung, Kang-Dae Lee, and Dongjoo Park. “Relation Model Describing the Effects of Introducing RFID in the Supply Chain: Evidence from the Food and Beverage Industry in South Korea.” Personal and Ubiquitous Computing 18.3 (2014): 553-561. Print.

Khanam, Suby, Jamshed Siddiqui, and Faisal Talib. “Role of Information Technology in Total Quality Management: A Literature Review.” International Journal of Advanced Research in Computer Engineering &Technology (IJARCET) 2.8 (2013): 2433-2445. Print.

Lotfi, Zahra, Muriati Mukhtar, Shahnorbanun Sahran, and Ali Taei Zadeh. “Information Sharing in Supply Chain Management.” Procedia Technology 11.1 (2013): 298–304. Print.

Nestlé Continuous Excellence: Lessons for Driving Performance Improvement 2013. Web.

Sabherwal, Rajiv, and Anand Jeyaraj. “Information Technology Impacts on Firm Performance: An Extension of Kohli and Devaraj (2003).” MIS Quarterly 39.4 (2014): A1-A30. Print.

Xu, Jingjun (David), Izak Benbasat and Ronald T. Cenfetelli. “Integrating Service Quality with System and Information Quality: An Empirical Test in the E-Service Context.” MIS Quarterly 37.30 (2013): 777–797. Print.