The Impact of IT on the Supply Chain Area - Coursework Example

Impact of information technology on supply chain performance: This report is submitted in partial fulfillment of the requirement for Higher Diploma in Logistics & Management by-------------------------- All sentences or passages quoted in this project from books, research papers, or other people’s work have been acknowledged by clear referencing to author, work and pages. Any illustrations which are not the work of author of this project have been used are specifically acknowledged. I understand that failure to do this amount to plagiarism and would be considered grounds for failure in this project. Acknowledgement Apart from my personal efforts, a project to succeed depends enormously on the guidelines and that encouragement provided by other people. Therefore, I personally take this auspicious chance to express my desire and gratitude to my friends and colleagues who were always vital and caring to the finishing of this project. I would like to portray my enormous appreciation to Professor…………… it is with this respect that I do say thank you so much for his tremendous support towards my completion of this project. The feeling of motivation and encouragement is always engulfing me each time I attend his lectures. If his encouragement and proper guidance were not inclusive, this project would be able to see the light of the day. In this study, seriously seek to improve or upgrade our understanding of the value and importance of information technology in the supply chain area. Information technology related resources such as suitable integration, managerial skills, and support from partners creates and improves performance. We look at a model which proposes moderating effect of competition and its impact on the general resource performance relationships. Using data collected from the field and the various findings on manufacturing firms, analysis does indicate and shows the crucial contribution of information technology to numerous supply chains. This can be generated via developing a digital integration which has its own capability and manifestation of the process along the supply chain. Given the technological resource, it can be seen that it does not actually hold the answer to information technology aspect that deals with creation of value. Moreover, managerial abilities that tries and enables various adaptations on supply chain processes and corporate strategy, so as to have an accommodation on the crucial use of information technology. These can be shown to play a crucial role in information technology process of value creation. Backend integration and skills of management can be found to be of value in environments that are far much competitive, contrary to which other resources have diminishing value in the essence of competition, managerial resources, and not forgetting integration. This provides an insight of how competition tries to shape information technology value. Furthermore, the unending moral guidance and support received from all colleagues who managed to contribute and even to those who are still contributing to the success of this project, indeed, I am truly grateful for such a supporting hand. Abstract In the supply chain, it is evident that companies are trying to find methods to improve on their efficiency and effectiveness and their competitive advantage by changing their operations tactics, ways and new technologies. This includes the implementation of the paradigm of supply chain management. Therefore, information technology can enhance the workability and suitability of supply chain management. Such attributes, however, whose information technology impact on supply chain management, are not same. In this paper, we specify the key areas which information technology has an impact on the supply chain, and hence carry out evaluation. The utilization of information technology can be considered as a vital tool for the efficient control of nowadays advanced supply chains. Despite the known benefit of the utilization of information technology in supply chain management, the numerous numbers of empirical researches analyzing the use of information technology in the supply chain can be limited. On basis of the analytical data from sixteen industrial and service firms from Finland, this paper shows the classifying of the methods in which firms utilize information technology in supply chain management. It critically evaluates the forces behind these varied uses. In accordance to the findings of this research, the utilization of information technology for purpose of supply chain management can be subdivided into various processes such as transaction processing, supply chain planning, tracking of orders and coordinating deliveries. Based on my own knowledge and experiences, this may further be classified on basis of performance improvement such as internal operations, upstream, and downstream operations. This would be critically examined on this project, thoroughly based on my own experiences and from some of the books where the research study became carried out. This project provides a new infrastructure of information technology that supports such kind of processes in the supply chain. This would be seen in this project, categorically explained step by step. We hence see that information technology is indeed a new field in the supply chain, and when harnessed well, it would bring about enormous improvement in terms of supply chain performance. In order to succeed in this world in the current market conditions, firms are now looking at shaping their supply chain via the successful and efficient utilization of information technology. This paper, by essence of a case study, discusses how a manufacturing firm implemented a transportation optimizing and planning system so as to perfect on their downstream supply chain process, and the key most crucial aspect being logistics management, and how information technology comes into effect in this context. The application framework for development can be used to make analysis of the implementation stages and various processes. Therefore, the ultimate findings obtained from this study would stand to benefit firms and multi-national companies, which tend to seek to create a competitive and comparative advantage in the market, via advanced and sophisticated physical and tangible distribution capabilities. TABLE OF CONTENTS Topic Page no. 1. Abstract and acknowledgement---------------------------------------------------2 2. Introduction -------------------------------------------------------------------------6 3. Aims and purpose of the study----------------------------------------------------7 3.1. Aim of the study---------------------------------------------------------------7 3.2. Purpose of the study-----------------------------------------------------------7 4. Books and literature review--------------------------------------------------------8 5. Methods of data collection (The empirical study) ------------------------------9 5.1.1. Collection of data (case 1) --------------------------------------------9 5.1.2. Data analysis-------------------------------------------------------------10 5.1.3. Results or findings------------------------------------------------------11 5.2. Data and measures (case 2) ---------------------------------------------------11 5.2.1. Data----------------------------------------------------------------------11 5.2.2. Measures----------------------------------------------------------------12 6. Summary and conclusion-----------------------------------------------------------14 7. List of references--------------------------------------------------------------------15 2. Introduction In today’s market, firms and companies are trying to look for methods to make them different from their competitors. By virtue of creation of comparative and competitive advantages, are key elements in continual sustaining of growth. Firms can be seen to be aggressive following initiatives to better carry out the management of their supply chains. Therefore, numerous firms and companies are now in the process of expanding their scope of managing their actions to manage both upstream and downstream channels. By investing in information technology as a way of managing and controlling the operations of the supply chains, is increasingly becoming one of the most efficient and effective methods of gaining competitive advantage over other rival companies. My project is a case study of one United States manufacturing firm that focuses on upgrading their supply chain process and operations. Numerous firms are now seeking viable chances to create value by trying to optimize their physical and tangible distribution. In this study, we hence, discuss the firm’s new technology implementation, to carry out sophisticated transportation process optimization and not forgetting the process of planning. The study tries to look at the crucial part of information technology in the management of advanced carrier services, and other shipping situations. In the marketplace, several tools which businesses use for the purpose of optimization for managing supply chain. The framework implemented by this firm has the capability to manage service provider data and crucial information, shipping places, optimization, and load building process, rating, and not forgetting finance tracking. By virtue of applying this technology depicts how a firm can develop the method to service their stakeholders. This can be done by increasing and decreasing of stock, reduction of expenses involved in the process of operations, careful planning, and increasing the levels of client satisfaction. The aspect of information technology would make provision of order visibility via the distribution and delivery stages. Moreover, the repository of rates of the charges and affiliated information, would certainly drive rating, selecting of carrier, and negotiation of other newer contracts and agreements. Clients would certainly benefit from more timely deliveries, and the effectiveness, brought about from improved shipment consolidation process among the crucial firm and its branches. Through this study, one should start to visualize how firms stand to gain from the purpose of implementation of the solution dealing with freight optimization. It should hence become clear that positive gains could be derived by reducing or lowering the expenses of transportation, lowering the stock levels, and heightening clientele satisfaction. This can be done by virtue of integrating and optimizing processes dealing with the backend. 3. Aim and purpose of the study 3.1Aim of the study This study is extremely important as it would aid to generate relevant statistics concerning the supply chain performance evaluation in an industry. It would assist in providing vital information and data to the relevant stakeholders so as to implement necessary measures and workable programs that would assist the company to improve its performance of the supply chain. Thus, the study would give detailed explanation on the measures that a company needs to take when infusing information technology in the supply chain process. 3.2Purpose of the study The study is going to establish and determine the usefulness of information technology in the making of the supply chain to be a success in terms of its improvement in the long run. 4. Books and literature review In essence, there is an enormous amount of research done which addresses the part played, and the effect of information technology in the management of the supply chains. Several studies on this research, provide vital and intensive explanations of the supply chain management such as the roles of information technology in supply chain management by Jaana Auramo, Aimo INkilainen, among others, information systems in supply chain integration and management by A. Gunasekaran, overview of information technology tools for supply chain management by Prashant R. Nair, information technology in managing global supply chains by Jaideep Motwani. Other creative books which a review became made included information technologies and material requirement planning in supply chain management as a basis for new model by Lutfu Sagbansua, assessing the impact of information technology on supply chain management by Mehdi Fasanghari, innovations in supply chain management for information systems by Bernard Jansen, supply chain excellence by Peter Bolstorff, trends in supply chain design and management technologies and methodologies by Hosang Jung, technology systems and management by Kelan Shah These among other books, analysis and crucial comparisons do view critically the crucial aspect of information technology in supply chain management process. Many researchers and analysts look on these cases critically since they would determine the success or failure of a supply chain. Moreover, there exists come quantity of research which tends to handle matters concerning the assessment and success of implementing IT. It is evident that a crucial number of these researches became done in various field studies, surveys, interviewing using questionnaires and case studies as it is in this study. They help to show how information technology creates value and competitive advantage for a firm. 5. Methods of data collection (The empirical study) 5.1Collection of data (case 1) First, a multiple case study method can be chosen for the importance of this research work. We managed to collect data from sixteen industrial and service firms from Finland in the autumn of the year 2004. The firms’ selection became done using the method of purposive sampling. The objective was to incorporate firms which tend to employ a variety of information technology mechanism of integrating and representing various business ideologies in the sample. The traits of firms in the research sample can be exhibited accordingly. It is evident that, both quantitative and qualitative data became collected using personal interviews, and not forgetting the use of questionnaires. The questionnaires and the questions for the interviews had their design at the same time for the purpose of covering both the information technology ideologies used, in their supply chain management ethics and practices, and the crucial traits of the firms and their environments that affected their businesses. Both the questions and the questionnaires for the interview became sent to the firms prior to the set time of the interviews. Hence, this made it easier for the firm representatives to make prior preparation themselves before the interviews by gaining answers to the anticipated questions. They also invited more representatives who had the vital information to the interviews. Moreover, the questionnaire contained closed-ended questions including multiple choice in nature, rank order among others. The interviews were half-structured in its kind. They basically lasted for a period of two hours averagely. The participants in the interview composed of two to three interviewers, and one to three firm representatives. Therefore, a whooping sum of about 33 firm representatives participated in the 16 interviews carried out. The interviews, for every interview conducted, a memo became written which became based on the recordings. This is later sent to the interviewees to be checked for any inconsistencies and errors. The data collected via the interviews and questionnaires was later on supplemented by information gained from other secondary sources, such as annual reports and company websites. All the data collected on the companies were put into a case study database that became used as the foundation for the analysis. Moreover, other information requirements that arose during this period became filled by virtue of communicating back to the informants using the telephone numbers which they left behind. In order to make the research to be more valid and authentic, the source, investigator and triangulation format became used in this process. Numerous researchers became involved in the interviews and confirmed the memos written. In addition, a number of respondents were also present in every firm during the time of the interview. Finally, the data collected through the half-structured interviews became consolidated with the utilization of questionnaires to collect structured quantitative data, a method referred to as triangulation method. The data concerning the constructs became collected as follows. For the types of information technology utilization of the case firms, the respondents did describe by explaining each of the information technology systems utilized for supply chain management job, as well as explain the actions carried out with them. The data collected via the interviews, covers areas such as the kind of technology utilized, and the kind of data shared through the company’s system. The data describes the forces or what would be termed as the drivers, to be utilized for different information technology usage. The drivers gain their establishment on the solutions to the questions investigating the reasons for the prior system implementation and the traits of the partners or associates whom the system can be utilized. Moreover, the volatile nature of the firm’s business environment became investigated by inquiring from the respondents. They explained the intensity and amount of demand risk, and the traits of their commodities offer, such as the duration of the commodities’ lifecycles, and the intensity levels of new commodity in the market. Moreover, to describe the business environment of the case firms, data on order entry, its importance in the supply chain, the concentration and the number of supply chain associates such as suppliers and customers, the quantity and intensity of product customization, number of commodities, and the amount of internal information technology integration, collected through the interviews and the questionnaires. 5.1.1 Data analysis The data became analyzed in two successive stages. The first case analysis became done to analyze how and with what type of associates each of the case firms uses information technology in its supply chain management stages, and to grasp why they utilize the technology in that certain method. Hence, for every firm, the kind of information technology uses, and the drivers for the known methods of information technology use became known on the basis of the interview conducted and the numerous amounts of surveys carried out. After analysis of each of the case, the cases can be compared with one another, so as to know some patterns and shapes within the firms using information technology in a certain manner. In this cross-case analysis, the firms utilizing information technology for purpose of transaction processing with their clients, can be first compared with one another to ascertain uniqueness between them concerning the drivers for utilizing information technology and the business environment. Furthermore, these cases became compared with the firms not utilizing information technology in that certain way, so as to identify the certain key variations in the business environments, between those who use and those who do not use information technology. This type of classifying and cross-case analysis became done for various uses of information technology, which involves transaction processing with suppliers, potential and existing clients, and order tracking and delivery coordinating with the existing clientele, and not forgetting the suppliers. 5.1.2 Results or findings In the case analysis that was within, the relation between the two constructs, the kinds of information technology utilization in the supply chain management, and the drivers for the utilization of information technology in supply chain management, are one of the crucial things which are critically examined in this study. On keenly observing each of the cases, a crucial comparison became carried out on the cases. Doing this was in order to ascertain certain shapes and patterns between them. The cross-analysis made a revelation of certain variations which exist between the firms using information technology in a certain manner while paying concern to the drivers of information technology usage. As for the business environment traits, the number and incorporation of supply chain associates, as well as the crucial part played by the firm in the supply chain management, in some cases, can be used to identify firms using information technology in a certain manner from those who don’t use. Nonetheless, order entry points, the intensity of commodity optimization, number of commodities in question, and the intensity of internal information technology operations, never varied between the users and the non-users in the information technology utilization. 5.2 Data and measures (case 2) 5.2.1Data To test the conceptual model and the related hypotheses in the proposal, we decided to use a set of data generated from an enormous-scale survey designed and targeted to establish internet-based value chain processes. The survey progress and data collection can be detailed, and the tests of the possible biases reported in a systematic manner. The data for my research derived its basis from the various reference books and literature material in possession. This is because some of the sections of the enormous database became utilized in some certain previous researches, conducted by other advanced researchers. Data in use included those used by various financial services industry to carry out useful studies on information technology payoffs in banks, data of the wholesale and the retail industries to study the utilization and value of the internet for wholesalers and retailers, and the current research utilizes data of the manufacturing industry so as to effect the intended study of information technology value in supply chains that can be wholly digitized. It is evident, that sometimes we may encounter the usage of such data in other key areas of other related researches. The case of computer intelligence database is one of the numerous databases that utilized information technology papers. The manufacturing data set utilized in this research does contain seven hundred and forty three companies. The sampling was random sampling, and stratified based on the company size. The data in the final sample was confirmed accurately for consistency and nonresponsive bias examination became done. Zero significant bias became found in essence of number of responses and respondents tallies. Moreover, positions of the respondent never resulted to significant biases in the collected set of data. This study, decided to focus on this industry for the following tangible reasons. First, focusing on a single industry aids to curb what would be termed as industry specific hazards. Second, and more vital, supply chains in this industry, mainly consist of many stages as compared to other industries. This is because supply chain management in this industry requires numerous other entities along the supply chain. This is true owing to the fact that such firms require to manage their transactions, cooperate with suppliers of their raw materials, and contract other manufacturers of subsidiary products, and not forgetting the crucial persons dealing and handling cases of logistics and downstream partners. Some information postulate that such firms for example, Dell and Microsoft, are leaders in the utilization and consumption of the internet, so as to digitalize their supply chain processes in the world. It is thus true beyond reasonable doubts, that the manufacturing firms are the most suitable testing area to the conceptual model. 5.2.2Measures In this case, we managed to use survey items for measuring the model. For the dependent variables, we measure and estimate improvements in the process performance with the items namely, performance improvement in the upstream operations which is inclusive of minimized procurement expenses, lower stock expenses, continual improved coordination with the suppliers, improvement in the internal operations which is inclusive of higher internal process effectiveness and efficiency, productivity rate of personnel, downstream operations improvement which is inclusive of greater sales, broader segments, and not forgetting improved clientele satisfaction. Competitive position can be measured by the limit to which the company’s relative position in the prevailing competition can be improved via information technology supply chain enabler integration. In the case of the independent variables, one decides to measure backend integration using such items including, the limit which Web software becomes integrated in the supply chain management process. It would be realized, that some of these measures became designed based on other successful studies. . Moreover, the firm’s databases can be integrated by those which can be owned by downstream partners, and the upstream suppliers. Therefore, the firm utilizes such an opportunity, hence using the internet to back up its vital data and crucial information, and sharing it along the supply chain 6 Summary and conclusion Doing a close review of successful firms around the globe implies that their success is partially dependent on their knowledge to apply information technology to supply chain management. Nowadays, in the stiff competitive environment which firms experience, whether small or enormous firms, the urgency of upgrading and improving efficiency and effectiveness of supply chain management, as a crucial core in business operations, continues to play a critical role for firms to gain competitive advantage over their rival companies. In this paper, by virtue of an intensive case study, the authors try to show clearly how a certain United States manufacturing firm utilized information technology to better its downstream supply chain processes. Therefore, in the future times, the firm has intentions to expand the scope of the project beyond the original stages of planning, so as to include the carrying out of the timed and targeted load plan. It would be evident that integrating the planning system that deals with transportation, together with the legacy system related to the warehouse, would hence enable the smooth occurrence of supply chain operations. It can be seen that load planning brings about the triggering of the printing of the documents involved in the operation, and not forgetting the process of loading. Moreover, in relation to the local business of the firm, including of both the subsidiary could create even huge consolidations of shipment, when incorporated into the current system. The knowhow to establish cost friendly strategies from the sites of manufacturers, to the client, is one other future enabler in the planning process. This form of catalyst gives a more organized approach to the direct determinant of technology, utilizing both optimizing of load, and rating technology. This would eliminate the physical and backward efforts that are currently utilized. Slight alterations of transportation planning timing, is a certain stage too. This would help the company to transform from the inactive to proactive platform, by virtue of planning for its operations, before the manufacturers could give an earlier look on the future loads of the company. This would enable and promote optimizing of load. Furthermore, the purpose is to provide a useful linkage between the transport planning and the manufacturing systems. Doing this would aid in coordinating the entry of orders so as to achieve the targeted fulfillment process, in delivering orders in the most reliable and efficient manner possible. This would save on time wastage, and enhancement of complete deliveries of those orders. Therefore, linkage of planning methods would enable the continual circulation of work in process, the materials, and the completed orders from manufactures, to suppliers, and ultimately, to the clients in the market. List of references Read More