How Does Information Technology Affect Supply Chain Management?

  • Date Icon November 14, 2022
  • Time Icon 3 Min
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Supply chain management is all about producing the right product in the right quantity and sending them to the right place at the right time. It seems simple, but it can quickly become complicated.

The supply chain starts with the supplies. With reliable supply chain software that allows real-time information sharing, manufacturers and suppliers can collaborate better and avoid production delays due to insufficient raw materials.

Normally, manufacturers initiate transactions with suppliers but if you are a supplier, you can monitor your clients’ inventory, forecast future demands, and make sure that you’re ready to fulfill orders for raw materials. Suppliers can also use historical data to make informed decisions in aspects like partnership and contract management.

Related: What is Demand Forecasting and Why it is Important?

Information Technology Affect on Supply Chain Management

How manufacturers benefit from IT

IT offers better visibility and transparency that lead to better accountability and control over the production of goods. Manufacturers that have clear visibility on production can make adjustments to make the process more efficient as well as foresee problems and prevent them. For example, with IT, a manufacturer can foresee delays and make changes in the production schedule.

Information Technology SOP's Chart for Supply Chain Management

How information technology helps shippers

Timely delivery is essential in any industry. Delivery that’s done on time usually results in customer satisfaction, and customer satisfaction normally leads to customer retention.

As a shipper or logistics provider, you can ensure customer satisfaction by improving order tracking and delivery. Keeping the manufacturers and distributors informed of the entire delivery process and possible delays already puts you a step closer to repeat business. What more if you can avoid delays by utilizing data from the tools? Many supply chain management tools for delivery and shipping service providers also let you give clients access to a platform where they can enjoy a sense of control.

How distributors can take advantage of IT

Distributors that are spending a lot of time and wasting money on inventory management can rely on supply chain management tools for some badly needed assistance. With the right tool and documented process, distributors no longer have to worry about excess or insufficient stock. Instead, they can predict demands and effectively manage inventory and orders.

How retailers can use information technology

In the supply chain, retailers are the ones who face consumers. They need flexibility and visibility as well as integration. Retailers can integrate their POS systems, which capture their sales, with their tool for monitoring the stock level, which is also visible to the distributor. Retailers can also set a reorder point that when reached will automatically generate an order.

Author: Danish Mairaj, CISCOM, PMP

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