The strategic use of IT in the supply chain

This paper discusses how the use of Information Technology (IT) facilitates the gaining of competitive advantage and the adding of value in supply chains. The IT revolution has enabled strategic information systems to be utilised across organisational boundaries. This involves increased information sharing, higher quality information being distributed, and the utilisation of software to streamline the business to enable key members of the supply chain to be electronically linked. The result being that information passes smoothly from order through to distribution to the final customer. IT facilitates this process by making the transfer of information to and from suppliers and customers easier and more timely, allowing the organisation to be able to respond quicker, eliminate waste, and reduce costs. These issues are discussed through an examination of the role IT plays in supplier alliances, its use as an information facilitator, and how IT is used strategically to gain competitive advantage. Consideration is given to the claim that IT has moved from being a management tool to an integrated and vital component of a strategic management structure.

This empirically based paper moves on from previous studies that look mainly at the role of IT in a supply chain, with an emphasis on logistics management, to how IT can be utilised to develop a supply chain strategically. This involves examining some of the features of the current technology - EDI, the Internet, EPOS systems, forecasting / modelling systems, and how they are used in marketing departments, research and development initiatives etc. The literature suggest these systems can help in the access to, and development of, information which adds value to an organisation, and leads to a competitive advantage being established (which is what supply chain management is concerned with). The empirical work presented is used to provide an evaluation of the academic literature in the supply chain area. Four case study scenarios will be presented which demonstrate the need for strategy to be the focus of IT in the supply chain. The paper concludes by arguing that unless IT is utilised strategically in the pursuit of competitive advantage, it is a technology that is wasted and will not provide the benefits potentially available.