Implementation of It to Supply Chain Management in Kazakhstan

Topics: Supply chain management, Petroleum, Supply chain Pages: 13 (4261 words) Published: October 22, 2011
1. Introduction
The implementation of Information Technologies(IT) into Supply Chain Management (SCM) into any industry’s firm is an essential and crucial part for successful and productive firm performance: it’s knowledge about market demand, customer and supplier relationship. The main idea of this paper is to describe a framework for IT implementation and its impact on Supply Chain Management in the Kazakhstan Industry of Mining, Oil and Gas. The work will present in general IT types in SCM and the benefits they can create being implemented in different stages of production: purchasing, operations, logistics, customer and supplier relationship. The focus will be made on Kazakhstani local environment and development of firms in Oil and Gas Industry, its current position and role in SCM: current problem, barriers for implementation and possible outcomes. The Kazakhstani reality and perspectives are widely compared with and correlated to the world fast and highly developed countries examples.

2. Research Mythology:
Information Technology in Supply Chain Management
2.1 Supply Chain Management (SCM)
The principle of Supply Chain Management (SCM) is based on the idea that every product, that reaches its final consumers, passes through the series of cumulative actions and efforts of several different organizations. This group of organizations involved is treated as the supply chain. The supply chain has been existed for a long period of time, but despite its wide usage and spread, only a few companies understand the role of it on business performance and cope successfully managing it. As it’s stated by the famous US professor in SCM, Robert Hanfield, “SCM is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.” According to Professor Hanfield, the organizations working through the SCM are linked to each other by physical flow of goods, finances and flow of information. Physical flow is “the transformation, movement, and storage of goods and materials” - the most visible part of the supply chain. The financial flow contains “payment schedule, credit terms and title of ownership arrangements”. The same role of importance is this process belongs to information flows, which enable “the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and material up and down the supply chain.” The flow of Information among businesses is held through the Information Technologies (IT).

2.2 IT in SCM
By implementation and development of IT usage in SCM, the usage of IT in the inter-organizational and out of its boundaries process, must be considered from the both perspectives of Software and Hardware Systems applied. Hardware includes devices for inputting and outputting, storage and processing information. Software systems in SCM are an operations systems that allow to control “entire system and application program for processing transactions management control, decision making and strategic planning” according to Ronita Kumar Mishra (2004). Software includes two types of applications: planning and executive. As it stated in the definition of SCM, provided, by planning application of SCM uses an “advanced algorithm” to place an order, reduces the costs and maximizes the profit. The executive application “track” the physical position of goods, manages the materials and is responsible for all financial data of all parties involved. The work of SCM applications is based on the common results, data models and information openly shared among the companies,...
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