The world has witnessed a surge in Information Technology which in turn has altogether revolutionized every aspect of business processes. Business is a scary and unpredictable paradigm which drives on competition.
“The economic environment is dynamic and the only certainty about it is it will continue to change” (Pereira, 2009, p. 1).With that thought, it is understood that in case of supply chain traditional methodology is not going to help an organization to cope up with market demands and customers.
And this is where IT comes in offering a robust, resilient but still efficient supply chain to sustain the high degree of uncertainty and increasing risk. Supply chain management involves several activities such as material sourcing, production scheduling and physical distribution system, all of which are today continuously supported by information systems.
Information technology has been noted as an increasingly important topic to help enterprises improve supply chain performance. Looking through the literature it has been noted that there is a positive and direct relationship between the IT and supply chain management. In fact there is hardly any inverse effect observed.
To start with, Information Technology offers a competitive advantage for enterprises. It with its savvy features such as the much prevalent Internet has taken innovation and adaptability to a whole new level. One of the foremost advantages of IT is the increased efficiency in supply chains.
Efficiency gains occur only in the case where there is a positive cost benefit relationship. According to Wang, Lai & Zhao, “IT is one of the few productivity tools that can increase capability, reduce costs, and improve service simultaneously”.
Furthermore IT offers an increased control over production. Efficient functioning of companies require a transparent monitoring of the production process, this is to distinguish and foresee any potential problems or delays in the production schedules.
Use of technology can bring the necessary transparency into the entire production process. It allows the manufacturing companies to have better control over product flow and information flow across the supply chain.
Another challenge that has been resolved through IT is one faced by almost all manufactures that is the optimal management of inventories. Excessive stocking causes wastes while the opposite leads to stoppages in the production cycle.
In this regard IT has created adaptable business processes that provide flexibility to handle varied demand situations. The analytics aid in achieving financial goals with predictable success through the management of inventory and sales effectively.
Perhaps the most important aspect for supply chains is an effective order tracking and delivery. Timely delivery would ensure customer satisfaction and build a clientage as well as reputation. This is where IT has unmatched relevance. From placing the order all the till the delivery, It has revolutionized business by providing customers with ways to track the order and report in case of any problems.
This way the supplier stays in the loop of knowing all the customer demands and preferences.Information technology has done wonders for the organizations in Pakistan. One of the best examples is Pakistan Petroleum Limited (PPL).
It is a web based tool that enables PPL to provide an integrated platform for suppliers and the organization. This platform not only enhance supplier relationship management but it also helps in sharing global knowledge and procurement processes.
It helps the company to analyze contracts; processes better and certainly make businesses more efficient. Shell Pakistan is next in line to have this very technology and is known for one of the best E-Procurement practices. There will be a time when the entire firms in Pakistan will have to opt for this technology because it beholds the future.
Moreover, technology has allowed making data driven decisions based on real time information. Not only that, technology also brings efficiency across the entire manufacturing process. The net result in using technology in supply chain management includes lower cost of product, reduced working capital needs, and increased customer satisfaction. This is what makes the relation a win-win situation for all.
By: Shahmir Hayat Malik
SZABIST Islamabad (BBA)