Technology’s Impact on Supply Chain Management

Technology is changing at an unprecedented pace across our society giving businesses the ability to boost communication and coordination of purchases. The supply chain is the core of any business. New technology is changing the way that businesses manage their supply chains. Most people attribute the supply chain to that of a large corporation, but every business has a supply chain. The problem with any supply chain is it is only as strong as the links in the chain. If a link is weak then your supply chain breaks down. This has impact on customers which in turn can negatively impact your business. The end result of every supply chain is always customers. Effective supply chains are defined by the efficiency of their processes, as well as their flexibility and reliability, and new technologies are proving valuable in achieving these goals. Supply chain management (SCM) is being transformed by technology, but exactly how and when depends largely on companies themselves. Today technology has dramatically impacted the supply chain process and the way it interfaces with customers. Customers are digitally connected and dialed in. Technology has provided the business landscape with many more capabilities; it has contributed to a new recognition of supply chain management as a profession and a discipline. As the internet, email and other technologies have become abundant, the expectations of consumers have grown consistently. Today’s companies are increasingly complex, with competition growing and change business processes taking place rapidly.

Modern supply chain managers understand that technology provides increased visibility and accountability; therefore, a stronger competitive edge and tight control of the supply chain is worth the investment. Mobile technology and ecommerce are creating more demand for simple, hassle-free return policies. Companies are attempting to understand the role that mobile or cloud technologies can play in their business, while striving to integrate new technologies into their current systems. Large deployments of mobile and wireless technology have already been implemented in the logistics and transportation sectors. Technology like radio-frequency identification (RFID) has also become a popular method of automatic identification as well as capturing data. RFID tags can be attached to clothing or inventory with the tracing possibilities are extensive and applicable to numerous aspects of the supply chain. This technology reduces labour costs by streamlining data-capture and reducing errors in the manual processes. Access to real-time, up-to-date information across the entire supply chain is having a significant impact on how companies are doing business.

The use of Customer Relationship Management (CRM) technology provides executive level visibility of supply chain operations, helping leaders to identify inefficiencies and bottlenecks in commercial operations. Though this type of technology has made supply chain more transparent, it has also improved the links within your chain. Retailers for example are completely tied together through technology. They have advertising management systems that forecast what products should be put in your ads based on trends. They have inventory control software that will automatically monitor inventory levels and make purchase recommendations based on projected demands. This application is most likely tied to their digital purchase order system where the category manager can approve the purchase via their smartphones.

Mobile technology is quickly penetrating the business realm. Tablets and smartphones are already replacing fixed-mounted terminals in every business. Distribution centres by managers and other personnel who do not want to at a desktop but still need to deliver reports and information. Technicians who service forklifts and automated material handling equipment are also using them for fast, convenient access to information on troubleshooting, repairs and work orders. The prevalence of mobile technology in everyday life is making the workforce in warehouses and distribution centers comfortable and familiar with technology. The generation entering the workforce now will expect the equipment they operate to provide an experience that is similar to their engagement with technology in their cars or with their smartphones.

Procurement over the Internet reduces the cost of purchases by giving supply-chain partners quick access to information about sources, availability, pricing and technical data. Once information required to make a purchase is available online from several sources, procurement is more efficient because the best source can be identified more quickly. Suppliers using the Internet to market their goods and services can sell world-wide. With the Internet’s greater transparency regarding pricing, suppliers have lost some of the strategic levers that allowed them to cultivate preferred accounts with higher margins. The ability of competitive suppliers to achieve greater sales volumes balances this disadvantage. Once the supplier has found a customer, he benefits from similarly reduced transaction costs as the purchaser, because completing the transaction is quicker and more efficient.

Technologies along with mobile computing and mobile devices have gained greater importance in recent years due to their ability to efficiently support supply chain processes. Comprehensive, sophisticated supply chain management systems meet the requirements of supply chains in the 21st Century as it relates to adaptability, collaborative ability, transparency, compliance and speed in all processes. Streamlining processes and cutting costs in the long term are all vital for future business growth. By choosing the right technological solution, supply chain managers can future-proof their business and gain a competitive advantage.