IT in Supply Chain Management Essay Example | Topics and Well Written Essays - 2500 words

IT in Supply Chain Management - Essay Example The traditional supply chain had limitations caused by power structures, limited information processing ability, and limited coordination and communication paths (Christiaanse & Kumar, 2000). Today organizations are facing complex changes to combat which Mutsaers, Zee and Giertz (1998) proposed the Nolan and Crosson six-stage model. it has become essential for organizations to be flexible and deliver a wide and changing variety of products. This requires a shift from â€Å"make and sell† approach to an externally-oriented â€Å"sense and respond† structure. This in turn implies the need for real time information. Real time information can be feasible only with the application of information technology in the different processes and functions. To meet the changing market requirements, companies have decentralized their value-adding activities by outsourcing and developing virtual enterprises (Gunasekaran & Ngai, 2004). All these highlight the importance of integrating IT with supply chain partners in the virtual enterprise or the supply chain. Demand for new information services like query processing, knowledge sharing and data mining led to the extension of information system engineering to support new, flexible software architecture so that the information system could contain new as well as legacy data and software components (Mylopoulos, 1998). IT has been recognized as a critical factor in the supply chain as they have demonstrated positive contribution to the performance of the firm and the supply chain (Jin, 2006). Technology is essential as it provides direction to the procurement, production and supplies strategies. When suppliers are able to meet customer demands compatibility of exchanges has occurred (Halley & Nollet, 2002). Success of incorporating technology depends upon the personnel’s ability to extract information (Lin & Tseng, 2006). Hence firms rely on technology to increases the flow of information across organizational boundaries and