Supply Chain and Information System

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Information Systems in Supply Chain Management

Chao Hsuan, Liu (41845491)

Information systems (IS) for the supply chain management have become critical tools for synchronizing information among the customers and suppliers of a supply chain (McLaren et al., 2004). Moreover, the supply chain concept has become a concern because of global competition and increasing customer demand. Thus, the information must be available in real time across the supply chain and this cannot be achieved without an integrated information system for supply chain management. More importantly, information technologies enable firms to become more effective to trade with customers and suppliers through the Internet. The aim of this paper is to examine that the good implementation of the supply chain information systems in firms can facilitate increase in their competitiveness and their profits. Keywords: information systems; supply chain management; information sharing.

Nowadays, firms are in the race of improving their organizational competitiveness in order to compete in the uncertain and emerging global market. Supply chain management (SCM) has become essential prerequisite for staying competitive in the global race and for enhancing profitably (Tan et al., 1998). Gunasekaran and Ngai (2004) also indicate that global market is completely connected and dynamic in nature. In addition, firms are trying to improve their agility level with the objective of being flexible and responsive in order to meet the changing market requirements. All of these factors emphasize the significance of information technology in integrating suppliers firms in virtual enterprise and supply chain. It is impossible to achieve an effective supply chain without good information systems. Because suppliers are located all over the world, it is necessary to integrate the operations both inside and outside of an organization. This requires an integrated information system for sharing information on various activities along the supply chain (Rezapour, Moghadam, & Dehkordi, 2009). More importantly, Motwani et al. (2000) describe that nowadays companies spend large amount of money for redesigning internal organizational and technical processes, changing traditional product distribution channels and customer service procedure and training staff to achieve IT-enabled supply chain. Therefore, IS has an important effect on implementing SCM and we will discuss how information systems can facilitate supply chain’s effectiveness in detail in the literature review and discussion.

Because there are a range of important factors for the development of information systems within supply chain management, a review of the relevant literature will begin with a brief description of the extant literature on importance of information systems. Then, it will look into a constellation of supply chain information systems.

Importance of information systems
The development of information technology has revolutionised the life of human beings for decades. McKeown (2001) defined that information systems (IS) are the systems that are combined to develop the information and knowledge needed by managers and other employees of organizations to make decisions. He indicates that IS are used in organization for three purposes: 1. Handling the present: the organization must be able to take care of its day-to-day business, primarily through processing transactions that involve customers, suppliers, and employees. 2. Remembering the past: creating and using organizational memory using the results of handling the present. 3. Preparing for the future: extracting data and information and then combining it with human knowledge to help managers make better decisions that will determine the future of the firm. IS can also be defined as a set of...
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