Supply Chain Management
This chapter of report is very vital for the researcher to establish an understanding of the research issue in a theoretical context that helps to conduct the research in the right manner and direction. From this part, the objectives of the research are critically analyzed that helps the researcher to generate the valid research outcomes. In this chapter, the researcher selects and reviews the various journal articles to evaluate the outcomes of the earlier researchers that are used to develop the literature review for the research. Additionally, this research also helps to find out the deviation in the literature already existing and provides opportunities for further research effectively.
The main aim of this research study is “to identify the importance of information management tools in making effective supply chain management: In the context of India”
The below research question are answered through this research:
- What is the importance of information management tools in making effective supply chain management?
According to, Sarkis, et al., (2011), Supply chain management refers to the process of managing and handling the effective flow of goods and services. It also involves the storage and movement of the raw materials, work-in-progress inventory, and the finished goods from the point of origin to the point of consumption. All the activities that flow in the supply chain are interconnected and interlinked with each other. At the same time, Carter, et al., (2011), stated that supply chain management refers to the designing, planning, scheduling, execution, control and monitoring of the activities in the supply chain with the aim of creating value, establishing a competitive infrastructure and measuring the performance worldwide. Supply chain management is the management of the interconnected and interlinked networks which are involved in the furnishing and provision of product and service packages needed by the customers. In an ever dynamic and challenging global market and networked economy all organizations should find out ways to rely on an effective supply chain.
Supply chain management is the integration of different functional areas in an organization to intensify the flow of the goods and services from the suppliers to the customers through effective delivery and manufacturing chain. In oppose of this, Prajogo & Olhager (2012), defined that there are barriers in implementing SC practices in an organization. These barriers are broadly divided into two categories namely managerial complexity and inter-business rivalry. It is due to the poor scheduling of SC practices, lack of SCM vision, less trust, and the required level of commitment from the top level management.
The effectiveness of information tools in supply chain management
According to Seuring, et al., (2010), it is determined that with the advancements made in the information technology, the organizations are now able to avail any sort of information they need instantly. It further helps the organizations to coordinate the activities to handle the supply chain. For effective supply chain management it is necessary that the required sources of inputs are effective in a way that the flows of activities are carried in a smooth way. In addition to this, Su & Yang (2010), stated that the importance of information in the management of supply chain for an organization is that it can attain a competitive advantage in the market, in better integration and coordination of the various processes of supply chain, helps to gather and attain the information required instantly, and also in the generation of reports as well as in the decision-making process. ICT adoption by various organizations has become a performance enhancer and a source of gaining competitive advantage over the competitors.
In support of this, in the research of Prajogo (2012), it is determined that there are many benefits of using information technology in supply chain management. It helps in providing timely information, enable a single point of contact for data, permit the decisions based on total supply chain information and enable the collaboration with the different partners. In the favor of these findings, in the research of Tang & Musa (2011), it is determined that the primary role of IT is to generate integrations and information linkages among the various functions of the organization. There are various IT tools that are been adopted and used by various companies to manage their supply chains effectively. At the same time, in the research of Lee & Lee (2010), it is illustrated that there are various tools like ERP, MRP, RFID, DRP, bar coding, etc that are used by the firm in order to make the effective supply chain management process.
In the research of, Shukla & Shukla (2012), it is depicted that ERP are the enterprise-wide information systems which helps in the automation of all the various activities and the diverse functions of the organization. They are the information systems, which are been integrated across the business as a whole. It helps to link the individual applications into a single application which in return integrates the processes and data of the business overall. In support of this, from the findings of Van Nieuwenhuyse, et al., (2011) it is stated that ERP is effective as it helps in improving the communication both internally and externally. It also avoids the duplication of information which makes it more flexible. The organization can exercise better control mostly in big companies. The decision making also improves within the company. It makes easy the firm in the supply chain management to manage the all supply chain process effectively related to products delivery, inventory, etc. On the other hand, Blecken (2010) find out in his research that ERP incurs a high cost in the implementation and its maintenance. There are also only limited experts in this system. But at the same time, if ERP (Enterprise resource planning) system is not implemented appropriately then it can affect the overall supply chain process of the firm. ERP is a generic system and this makes it inflexible to function. It consumes time and effort of the organization.
In the words of Zhu (2012), it is determined that MRP (Material resource planning) refers to the material resource planning which means the systematic scheduling, planning and controlling of the production and inventory in the supply chain management. In support of this, from the research of Blecken (2010), it is stated that MRP is a procedure of planning the raw material needed, the work-in-progress inventory required, and the purchased parts that makes easy the firm to handle all operations related to the supply chain. From the research of Giannakis & Louis (2011), it is determined that MRP provides several advantages for a company in managing its supply chain. It is helpful in reducing the production and delivery time, it helps in providing the right kind of material needed for production on time, helps in delivering the goods manufactured by the organization for its customers. In support of this, in the research of, Tang & Musa (2011), it is stated that MRP is helpful in responding to the market changes instantly as well as it leads increased efficiency. In oppose of this, in the research of, Horn & Little (2010), it is determined that MRP results in increased transportation cost as well as it leads to complicity.
According to Tesoriero, et al., (2010), RFID (Radio-frequency identification) is a very effective tool which is needed by the organization in managing its supply chain operations. It uses radio waves to capture and read the information which is stored on a tag attached to an object. In like manner, from the research of, Lee & Lee (2010), it is determined that RFID is effective in improving the inventory management and the replenishment practices which in turn reduces the chances of interrupted production or lost sales. In support of this, from the research of Sarac, et al., (2010), it is determined that this technology is very effective and useful in terms of security and attendance purposes in the organization, the inventory can also be tracked accordingly. But at the same time, in the research of Sari (2010), it is illustrated that the RFID devices are time consuming as they are needed to be programmed properly as well as they are costly because it uses batteries. In the research of Olhager (2010), it is depicted that, DRP (disaster recovery plan) is a scheduling technique that helps in controlling the inventory and apply the principles of MRP to distribution inventories. It is also a method of handling replenishment of the stock in the business organization.
From the above report, it can be concluded that for the effective functioning of any organization it need to develop its supply chain smoothly. The supply chain management is necessary as it controls the flow of activities from manufacturing till the delivery to the end users. It is also concluded that there is an important role of information tools in the effective management of the supply chain. The various information technology tools such as, ERP, RFID, MRP, DRP, bar coding, etc are helpful in the effective supply chain management. These all tools have resulted in the efficient functioning of the supply chain of every organization. It is concluded that information management tools are effective in the management of supply chain.
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Zhu, X., Mukhopadhyay, S. K., & Kurata, H. (2012) A review of RFID technology and its managerial applications in different industries. Journal of Engineering and Technology Management, 29(1), pp. 152-167.
