The influence of IT on Supply Chain Management Systems - Dissertation Example

?Running head: IT in Supply Chain Management The influence of IT on Supply Chain Management Systems Insert Insert Grade Insert Name November 11, 2011 OUTLINE 1. Introduction 1.1. The research question 1.2. Objectives of the research 1.3. About the organization 2. Literature review 3. Dissertation methodology 4. Ethical considerations 5. Findings and analysis 6. Discussions 7. Limitations of the study 8. Conclusions 9. Works cited The influence of IT on Supply Chain Management Systems 1. Introduction 1.1. Background Business organizations operate in a competitive environment in which different players scramble for the market share. The organizations strive to be attractive to clients by offering services that are exceptional and conventionally accepted that are unique to the company. This aim of business organizations is not always achieved due to the other challenging forces in the in the industry. The overall costs of operation are often high at certain instances while the customers are attracted to competitive (lower) prices for different products and services. The organizations also experience labor shortage or heavy loads of tasks on the employees that slow down the operations at the organization. This leads to overall reduced output of the employees. The manual systems that are applied by certain organizations in their operations are not only slow but are also subject to errors that can lead to huge losses to the organization. This situation has been corrected in many business organizations with the recent development of information technology. The use of information technology has improved operations in various business organizations through excellent information management. It has improved the means of communication within and between organizations. This is essential since the operations of an organization are dependent on the individuals within and outside the organization as well as other organizations. The use of technology has had significant impacts on the operations at Tigo Ghana, the Ghanaian subsidiary of the Millicom International Cellular. It has been pointed out that business organizations are interconnected in their daily operations. There is a continuous flow of products, services finances, as well as information across different interconnected organizations. Two or more organizations that have a direct link of this nature form a supply chain (Mentzer, 5). There is need for proper coordination of the processes involved in the conveyance of these products, services, or finances across the supply chain. Supply chains are encountered in both the service and manufacturing industries, though with some deviations across the industries (Ganeshan & Harrison, 1). Supply chain management is the science and art applied in improving the business functions through enhanced flow of information with an aim of improving long-term productivity and customer satisfaction (Wailgum & Worthen, 1; Mentzer, 2). These steps are hardly implemented with the traditional manual system. The introduction of modern technology and the integration of the technology into supply chain management have improved the operations of many organizations. Competition then becomes between organizations and between their supply chains as well (Xia-feng, 72). Tigo Ghana is one organization that has recently integrated information technology into its supply chain management in order to improve its operations. This study investigates the roles that information technology has played in the improvement of supply chain management at Tigo Ghana, a telecommunications company in Ghana. It performs an analysis of the significant milestones that have been witnessed in the telecommunication company since the beginning of technology-based supply chain management. This study focuses on the role that IT has played in improving the operations in supply chain management of the organization. 1.2. The research question The research entails an investigation of the influence of information technology on supply-chain management systems with a focus on the operations at Tigo Ghana Telecommunications Company. 1.3. Objectives of the research To investigate the role of information technology in improving the supply chain management with reference to IGO GHANA Telecommunications Company To identify the roles played by IT in restructuring the distribution system in the organization in order to provide quality services at affordable costs To understand the perceptions of the employees of the organization on the benefits that have been realized from integrating information technology into the supply-chain management system 1.4. About the organization Tigo Ghana is a subsidiary of an international mobile service provider (Millicom International Cellular) that operates in several countries in Asia, America, and Africa. The company has seen significant developments following the restructuring of the organization’s operational strategies. Millicom International Cellular is committed to promoting innovation and inventive leadership and management in the mobile telecommunications industry. This mission is to be achieved in Ghana through the Tigo Ghana initiatives (Ghana Business Index, 1). The company has purposed to provide 3G mobile services that will give it competitive advantage in the Ghanaian mobile telecommunication industry. This is achieved through research and development initiatives and incorporating the results of these researches into practical operations 2. Literature review A typical supply chain management has five different components- plan, source, make, deliver, return (Wailgum & Worthen, 1). The first component involves planning to obtain a supply. This includes all the arrangements and considerations like the amount of services, products, or finances to be sourced. Then there is need to consider the supplier of the services/finances/products. These suppliers have are the producers of the products. Thus, having obtained an order for purchase, the step involves the production of the products or services. The next initiative is to deliver the products to the purchasing clients and involves participants like transportation agencies. At certain instances, there may be need to return certain products/services to the supply. Thus, the last component may be upstream movement of excess services in the supply chain. All these activities require proper coordination and passage of information. Various line managers are involved in different parts of this chain (Lee & Billington, 1992, 65). The tasks involved at certain stages are tiresome and the use of manual means is often slow and bound to errors. Organizations can incur huge losses stemming from arithmetic errors encountered when handling large transaction data. To minimize these losses, most firms have opted to employ modern technology in the operations in the supply chain management. The use of modern information technology improves on the means of data storage, retrieval, and communications within and outside the organization (Xia-feng, 72). It has been observed that the main function of information technology in the supply chain is to ‘support, enable, and enhance the key managerial processes associated with logistics and supply chain management’ (Stenger, 39). The supply-chain management software is complicated software that has been broken down in different ways to suit the operations at different stages of the supply chain. The different steps of supply chain described above have different tasks that require different software applications. In several instances, these individual tasks have their own specific computer applications. This is particularly difficult to adopt since some of the pieces of information generated at one stage may be necessary at the other stage. A good approach would be to have a more integrated system that combines most of these applications into a single suite to enhance passage of accurate information. To achieve this, certain software developers have gathered different applications into a single package to perform most of the tasks required for the different stages in the supply chain (Wailgum & Worthen, 1). However, no collection of software has been gathered that can perform all the tasks needed by all companies. The companies are then challenged to purchase the suite that best serves their interest. It has been observed that different computer applications are appropriate at different levels in the supply chain. A company is often interested in knowing what the demands of its products or services may be in the future, in order to plan for the order. There is also a need to examine the availability of supply for the products in order to plan for where to source the services. After an order has been made, a firm may also be interested in knowing the status of the purchase of the products, that is, the status of the production process or delivery of the products. It should be noted that even the suppliers of an organization might also have other suppliers. The whole chain then consists of a network of suppliers and customers. In order to plan effectively, there is need to have a network of information flow throughout the network. Poor communication in the supply chain is one of the reasons for failures among many manufacturing firms in India (Chandra, & Sastry, 32). Thus, there is need to share the data generated at different stages with individuals across the entire supply chain. The accuracy of the information is a fundamental consideration. It has been observed that ‘the old adage about systems only being as good as the information that they contain applies doubly to SCM’ (Wailgum & Worthen, 1). Firms make demand and sales forecasts based on the past demand and sales. However, entering wrong information into the demand-forecasting software is likely to lead to huge losses due to erroneous predictions. There is then a need to train the employees of an organization like the purchasing personnel that are to use these applications in order to ensure that information is fed in correctly into the applications (van Stekelenborg, 7). The use of internet has contributed to another milestone in the supply chain management of many organizations. In the initial integration of information technology into supply chain management, firms were only concerned with improving their own supply chains. The software applications were limited to making predictions on the demands of the company and there was little communication with the other players outside the chain. With the increased use of internet, firms are able to link their supply chains to the supply chains of their suppliers (Wailgum & Worthen, 2). Internet has proper standards for communication and provides a cheap means of reaching people in different parts of the world. It provides a mechanism to connect all the individuals that carry out business together in a given sector. There is a credit in having this visibility in the supply chain. The organizations that have successfully integrated information technology into their supply chain management system have seen the unquestionable benefit of the initiative. The main aim of all this coordination is to ensure that products or services are produced in amounts that are required at a given time in the market. The cost of keeping inventory is often high. The just-in time procurement system enables the firms to reduce the costs of maintaining large inventories (Wailgum & Worthen, 2). The firms are able to order for only the services that can be consumed. 3. Dissertation Methodology It has to be recalled that the major objectives of the research is to identify the influence of Information Technology in the supply chain management at Tigo Ghana. In order to achieve the objectives of the study, it was necessary to seek information from the relevant personnel in the organization on the effectiveness of the newly integrated supply-chain management system. Thus, the research is mainly based in Tigo Ghana Telecommunications Company at the company’s head office. The personnel so identified were well conversant with the overall objectives of the organization and the specific objectives for adopting information technology in the supply chain management. The satisfactory information was mainly obtained through interviews with the selected individuals in the organization. The research entailed an interview with ten key management personnel drawn from different departments within the organizations. There was adequate time given to the management personnel to prepare for the interviews and thorough research was carried out to develop the questions to be administered during their interview. Much of these questions focused on the benefits that the company has obtained since it introduced information technology into its SCM system, the challenges that have been faced as well as the measures that the management of the company is putting to cub these challenges, if any. This provided a qualitative set of data pertaining to their views on how effective the system was following the integration of information technology into the SCM system. The qualitative data could then be converted into quantitative data by considering the individuals who in support or against the effectiveness of the initiatives. There was also a randomly selected group of 120 low level employees also included in the study. This category of individuals was required to summarize their view of the information technology in supply chain management thorough responding to a single question: Are there significant developments that have been realized since the integration of Information Technology into your supply-chain management system? The employees were required to provide an answer to this question by indicating I, II, or III that had the following implications. I. Serious improvements have been recorded in the SCM II. Few improvements have been recorded in the SCM III. No improvement has been recorded in the SCM 4. Ethical considerations There are a number of ethical concerns in carrying out a research of this nature. The participants to be included in the research have to be informed of the purpose and objectives of the research, the risks associated with participation in the research, and be assured that the results provided cannot be used for any negative implication to their disadvantage. The researcher has to obtain informed consent of the participants before conducting the study. Similarly, the participants hold the right to decline response to some questions administered in the interview process as far as they consider such responses liable to interdiction. The participants to be involved in lengthy discussions were selected based on their areas of interest in the Tigo head office and one’s approval followed their merits on the use of a particular brand. The researcher obtained informed consent from the participants before carrying out the interview. The individuals were informed of the purpose of the research, why were encouraged to participate in the research and the potential risks that they would encounter in the process. There were initiatives to respect the privacy of every participant in the study. In the event that an individual declined to respond to a give question, this would be treated confidentially as it was the individual’s fundamental right. The issue of time was another important consideration during the interview process. Most of these personnel were key officials with sensitive assignments and no much time was to be taken in the interview process. After the introduction, the researcher often stayed focused on the course of the questionnaire and no time wasted with lengthy discussions. 5. Findings and analysis It was very fortunate that all the key personnel that were selected to participate in the study were cooperative and provided the necessary responses. From the qualitative data that was collected, it was clear that eight of the total ten participants were satisfied that the integration of information technology into the SCM system had improved the operations significantly. Some of them cited few challenges like the need to train the employees on some of the applications and the need for further research coupled with lack of funds. However, most of the employees were reported to be already knowledgeable in the application areas. The participants were generally contented that the management of the organization was sensitive to these potential challenges and was instituting measures to manage them. The other interesting result was the response obtained from interviewing the low-level employees on their perception of the initiative. Out of the 120 participants, 90 (75%) were fully contented that the imitative was really achieving the intended objectives, 22 (26.4%) said little developments had been witnessed whereas only 8 (9.6%) asserted that no significant developments had been seen. The information is summarized in the following chart. Fig.1 Response from the interviewed employees on the benefits of IT in SCM 6. Discussions Tigo organization has shown commitment to providing excellent services to its subscribers by guaranteeing that the subscribers obtain good services at affordable rates. The company applies the business model principles of triple A; Affordability, Accessibility, and Availability. These principles guided the company into integrating information technology to improve the efficiency of its operations in supply chain management. Information technology has played a significant role in the improvements of the functions in the supply chain at Togo Ghana. The activities involved in a supply chain include procurement, manufacturing, and distribution of services (Lee and Billington, 1995, 45). In the earlier times, information flow between different stakeholders within and outside the organization was entirely based on written documents. All the forms of interaction, communication, and transactions performed at the organization were paper-based, a situation that slowed down all the operations. In this state, information was not regarded as an important component of supply chain management. The value that was attached to information was low as little care was often put in place to ensure timely and accurate information was passed across the entire organization. With the development of the infrastructure that integrates information technology into supply chain management, the company has had a milestone that has earned it competitive advantage in the communications market. The contributions IT has in improving operations at Tigo Ghana takes several dimensions. Firstly, the main aim of proper supply chain management is to ensure that the right quantity of product/services, finances, and the right information is available to the right person and at the right time in the right place. The cost of keeping an inventory can be high due to several factors like product depreciation or obsolescence, the cost of storage, the loss of value kept on stock that could be used on the other functional business, and other associated risks that can be encountered before the stock is cleared. Firms may opt to make small purchases to minimize these losses. However, this is likely to lead to other losses. The costs of making a purchase are often high in some cases due to factors like transportation. It is then desirable that firms do not make purchases so often. Besides, in the event that customers are short of services due to low supply, it is likely that they will not be satisfied by the services and they will opt for other suppliers of the services. The remedy is then to device a mechanism that provides a balance entire supply chain too ensure that products, services, or finances are availed to the right individuals in a manner that minimizes the losses from both directions. The use of information technology to keep track of the inventory is appropriate in performing this seemingly difficult logistics. It is possible to keep records of resources to be availed at different places and at different times. The integrated data management system is able to generate information that can be used to provide accurate forecasts of sales and demands of services for a relatively long-period into the future. The company is then able to foresee and mitigate the variations or fluctuations that are likely to occur in the future. Secondly, due to the high levels of competition that is witnessed in different industries including the telecommunication industry, there is need to attract and retain customers over a long period to ensure sustainable production by an organization. This is achieved through good quality of services provided to the clients. The use of information technology has improved the efficiency in the service of not only the customers of the company but also its other stakeholders. There is quick means of communication to the clients who eventually derive the necessary level of satisfaction from the services of the organization. This enables the clients to develop brand loyalty and they are less likely to be attracted to other mobile service providers in the region. The competitive advantage so developed assures the company of continued sales of its services and hence sustainable operations. Similarly, the use of information technology has reduced the costs of production to the organization. It has to be noted that the amount of human labor that is to be applied in paper transaction and communication procedures is greatly reduced when the companies get a machine to perform most of the operations. Relatively few, though more skilled, individuals are needed to execute the operations of the company with the information technology. This is particularly appropriate in functions like calculations of different payments to be made to the employees or suppliers. 7. Limitations of the study Just like any other research, this research had certain limitations though measures were taken to minimize and manage them. One of the limitations was insufficient time on the researcher’s side to make the appropriate preparations. There was also a problem of limited financial resources to be employed to ensure timely and accurate data collection. This was particularly observed in the interview that included several people. Nonetheless, the associated challenges were managed and the interviews were conducted successfully. 8. Conclusions The benefits of integrating information technology into the operations of a given organization are evident and need not to be overemphasized. The supply chain of a given company involves different tasks and different players that call for a proper mechanism for coordination of information. The traditional paper-based system of transaction and communication in the organizations were not only slow and inconvenient but also bound to several errors. Tigo Ghana telecommunications company has witnessed significant developments in its operations following the adoption of modern technology into its supply chain management. It has witnessed increased customer satisfaction and improved coordination with their suppliers to reduce the costs of maintaining inventory. Works Cited Chandra, Pankaj and Sastry, Trilochan. Competitiveness of Indian Manufacturing. Findings of the 2001 National Manufacturing Survey. June 2002. 11 November 2011. http://www.iimahd.ernet.in/publications/data/2002-09-04PankajChandra.pdf Ganeshan, Ram and Harrison, Terry P. An introduction to supply chain management. 2002. 11 November 2011. http://mason.wm.edu/faculty/ganeshan_r/documents/intro_supply_chain.pdf Ghana Business Index. Tigo - Millicom Ghana Limited. Ghana Business Pages 2011. 11 November 2011. http://business.everythinghana.com/index.php?option=com_mtree&task=viewlink&link_id=181&Itemid=26 Lee, Hau and Billington, Corey. ‘Managing supply chain inventory: Pitfalls and Opportunities.’ Sloan Management review, 33(3); 65-73, Spring 1992. 11 November 2011. http://e3associates.com/files/Article%20-%20Managing%20Supply%20Chain%20Inventory%20Pitfalls%20and%20Opportunities.pdf Lee, Hau and Billington, Corey. The evolution of supply-chain-management models and practice at Hewlett-Packard. Interfaces 25(5); 42-63 Sept-Oct 1995. 11 November 2011. http://www.e3associates.eu/old_site/images/Article%20-%20The%20Evolution%20of%20Supply-Chain-Management%20Models%20and%20Practice%20at%20Hewlett-Packard.pdf Mentzer, John. Supply chain management. 2nd ed. Thousands Oak: SAGE. 2001. Stenger, Alan. Advances in Information Technology Applications for Supply Chain Management Transportation journal, Vol. 50, No. 1, (2011); 37-52. 11 November 2011. http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=4&hid=127&sid=05f80f33-e6ff-4b26-9ff6-e697685acba9%40sessionmgr104 Van Stekelenborg, Rob. Information technology for Purchasing. KPMG Management Consulting . 1997. 11 November 2011. http://alexandria.tue.nl/extra1/PRF15A/9703550.pdf Wailgum, Thomas and Worthen, Ben. Supply Chain Management Definition and Solutions. 2008. 11 November 2011. http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and_Solutions Xia-feng, Liu. Study on the Application of Information Technology in Supply Chain Management. Journal of US-China Public Administration, 4.1, (2007). 11 November 2011. http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=4&hid=127&sid=05f80f33-e6ff-4b26-9ff6-e697685acba9%40sessionmgr104 Read More