Impact of technology on Logistics and Supply Chain Management

Technology impacts Supply Chain Management across procurement, logistics, firm, vendor relationship management and customer relationship management.

Technology on Purchasing
IT has been used in various ways in procurement applications including communication with vendors, checking vendor price quotes and making purchases from vendor catalogs. Vendor negotiation has also been streamlined through the use of IT. This includes bargaining, renegotiation, price and term agreements. It is also used to provide vendors with information, the processing of returns and damaged goods and the receipt of queries from vendors. IT is also used in order processing operations; it‘s prevalent in order placement and order status. This reduces costs of order processing as well as the error rate involved in order processing,

Technology on Operations
IT is employed in inventory management. It‘s used to communicate stock outs by customers to vendors. It has enabled companies to institute EDI information programs with their customers. IT allows for proactive inventory management where firms can notify customers of order shipping delays and inventory emergencies, this facilitates decrease in inventory lead time and inventory.

Technology on Logistics
IT helps in transport management, one the highest cost component in the supply chain. It is used in monitoring of pickups at distribution centres by carriers. IT is employed in production and logistics across all processes involved in fulfilling customer‘s orders: manufacturers, suppliers of parts and subassemblies, material managers, logistics managers, transportation carriers, customer service representatives, quality assurance staffs and others. It helps to reduce cycle time used to fill a customer‘s order, reduce inventory of parts, work in process and finished goods in the pipeline, increase the accuracy and completeness of filling a customer‘s order and of billing him for it and accelerate the payment for the delivered items.

Technology on Customer Relationships
IT provides firms with the ability to offer customers another way to contact the firm regarding service issues and integrates customer information and firm information to bring great benefit to both customers and firms.

Technology on Vendor Relationships
IT leads to closer buyer-supplier relationships; it encourages commitment to establishing relational behaviour. It helps decrease transactional costs between buyer and suppliers and creates a more relational/cooperative governance structure. IT allows for sharing of critical and proprietary information among supply chain partners.

Technology on Firm
IT helps coordinate the provision of services to a multinational customer in different countries or regions. It helps share new knowledge as it is developed among members of the team and to individuals in other parts of a larger organisation.

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