SUPPLY CHAIN MANAGEMENT- Importance of information technology





The combination of computers and telecommunication offers the fastest means of communication in the business. Now-a-days, the internet is becoming a reliable link between the suppliers and customers. The biggest advantage of the internet is that it offers point to point information about the market to the customers. Apart from this, IT provides various opportunities to the organizations, related to reducing cost and improving profits. Following are the benefits of IT services to organization:

  • It is less capital intensive.
  • It is not location-specific, it can be accessed from anywhere in the world, even from the remote areas.
  • It does not demand expensive infrastructure facilities.
  • It helps in 24 hours communication all over the world that in turn saves manpower.
  • It becomes easy to select the vendors for joint venture, as the whole world gets connected through internet.
  • It is easy to get the customer feedback quickly and easily through the internet, which helps in maintaining customer relationship.



The various applications of IT help in improving the quality of products and services as it allows you to select the best product and technology from all over the world. There are various applications of IT which include the following:



    The internet is an important tool for conducting effective business of the organization. The internet helps in proper flow of communication in the organization and in conducting various activities such as data exchange. Now-a-days, suppliers provide information to customers through internet rather than distribution catalogues for their products.


  • E-MAIL:

    It builds effective throughout the world at any time and at a negligible cost. It is done through the internet, which is widely accepted medium of delivering business information. Managers prefer e-mail instead of courier for sending the document because e-mail is time and cost saving.



    It is defined as doing business electronically that includes for sharing of business information by electronic means among suppliers, customers, governmental bodies and other partners in order to conduct and execute transaction in business, administration and consumer activities. Its advantages are:

    • E-commerce can increase sales and decrease costs.
    • It increases purchasing opportunities for buyers.
    • It increases speed and accuracy with which business can exchange information.
    • It provides buyer with a wide range of choices.
    • E-commerce can benefit general welfare of society.
    • Electronic payments are easier to audit and monitor.
    • E-commerce enables people to work from home.
    • It can make product and services available in remote areas.


  • EDI (Electronic Data Interchange):

    EDI is the exchange of business information through computers in standard formats. In EDI, the business information is organized according to a specified pattern decided by both the organizations. The main advantage of EDI is that it reduces the overall cost and enhances the productivity of the organization. Apart from this, EDI also improves the business relationships with other parties and minimizes the use of paper.


  • ERP (Enterprise Resource Planning):

    ERP is an IT technique that help in integrating data and processes of the organization into an unified system. ERP uses various components of computer hardware and software techniques for achieving the integration.



Information technology plays an important role in the supply chain by exchanging, storing and utilizing the business data. Despite having several advantages, the IT lacks in the following aspects:

  • Development of Electronic Data Interchange (EDI) in an organization is costly.
  • Business transactions take place through the Internet, so there is no face to face contact between the organizations and suppliers or vendors or customers. Therefore, there is lack of trust between the individuals between whom the transactions take place.
  • The employees, customers and suppliers who are conducting business through phone, fax and meetings, may face difficulties in using the IT techniques because special skills are requires for using IT techniques.