Information Technology in Supply Chain Management

Review Of Literature

In order to optimise supply-chain flow decisions to achieve organisational competitiveness, to improve higher service standards, to decrease inventory, supply channel costs and to reduce electrical risks, the exponential expansion of IT in the area of supply chain management (SCM) through communication technology is important¹. IT in the SCM is also necessary to facilitate integration and effective sharing of information across and across organisations. The companies today are working towards a virtual supply chain by using quick technological advances and IT applications that includes: Electronic Data Exchange (EDI), Radio Frequency Identification (RFID), Bar code, Electronic Commerce, Decision Support System, ERPs, etc. It also works readily in e-risk reduction. The fundamental focus of this study is to understand the function and implementation of IT in the e-risk management and reduction of the supply chain.

The use of information technology (IT) is necessary for the effective control of today's complicated supply chains and is considered to be the main advantage of integrating IT. The amount of empirical studies which analyse IT use in the supply chain is limited but has shown positive outcomes. This article proposes a taxonomy of how organisations use IT in SCM and investigates causes for these distinct types of use based on empirical information from 16 Finnish industrial and service companies (McKinsey& Company, 2020). The results of this research indicate that IT use for SCM-related reasons is classified into transaction processing, supply and cooperation chain planning and order monitoring and delivery coordination. The results imply further that the drivers in SCM differ from these three IT uses.