Role of IT in supply chain management

Supply-Chain-Management-Keyboard

The goal of supply chain management has traditionally been expressed around the right product at the right time in the right place concept, and to increase effectiveness and efficiency.

Supply chain management is more than the movement of goods and money, increasingly it’s about the value of information. Information in real time can be used to find micro duration opportunities and exploit them, and, information about goals, trends, intentions, solutions and problems can be used to create a collaborative environment.

What about the role of information technology (IT) in supply chain management?

We could argue that matching supply and demand perfectly would be a desirable goal with tremendous benefits. However, forecasts or an understanding of requirements tend to have an element of uncertainty. Thus reducing uncertainty in all elements of the supply chain, for example, in forecasts, schedules, market needs, etc is of value.

Any type of forecast or requirement could have a range of possibilities where we tend to choose the most likely possibility or value, what if we had perfect information such that we knew with certainty the actual amount or product attributes required? This would eliminate the need to link forecast values with likelihood estimates since the forecast would equal the actual outcome. While ideal and difficult to ever obtain, an IT system that reduces uncertainty around our information moves us closer to the ideal.

Therefore, a value that IT can bring to supply chain management is the ability to help eliminate the fog of uncertainty.
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