Do you want to explore how information technology is used to revolutionize the supply chain? If yes, this guide lets you gather all such ideas about this concept here. Many experts suggest that the supply chain exists only due to information technology.
It is mainly because the information technology revolution has enabled supply chain management. It may be true because supply chain as a profession and discipline gained popularity in the 1990s.
During that time, IT was hitting the industry. The two most essential technologies are the development of ERP (enterprise resource planning) systems and the internet. Here, information technology has enabled supply chain management to grow sales and reduce costs.
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How does IT let supply chain management reduce costs?
Supply chain experts use 6 important methods to reduce costs and improve sales. Those methods are:
- Integration of information streams
- Digital workflow
- ERP systems
- Internet auctions
Generally, the digital workflow can reduce data entry and send information to the only person who needs it. EDI – Electronic Data Interchange is the most widely used digital workflow. It is the set of information technology standards that multiple firms can use to share inventory data and order details.
Orders entered into the system can be connected via Electronic Data Interchange to eradicate the requirement to re-enter the order. Here the concept belongs the same as that of internet ordering systems. These let customers directly put such orders into the system. Customers entering orders instantly can easily eradicate more data entry errors.
The combination of information streams enhances the visibility of customer demand and inventory details. The same EDI systems and other software tools let supply chain partners effectively share data and help reduce under and over ordering due to unknowns.
It is happening now if you want to see the supplier’s inventory. These systems also send data to the suppliers and let them know the customer’s orders and inventory. Such visibilities have completely reduced under and over ordering. This reduces artificial valleys and peaks of demand in the supply chain.
ERP systems have the product flow and globalized information for a wide range of global supply chains. Right now, supply chains have gone global. Hence companies looking for the best suppliers across the globe must globalize the information flow. Luckily, ERP systems can deal with multiple currencies and languages.
Instead of people calculating currency exchange rates and translating languages, ERP will take care of everything. It has ultimately reduced the cost of having both external and internal global supply chain partners. By reducing this barrier, the ERP system has reduced the total supply chain cost.
E-marketplaces have reduced costs for hiring professionals to explore new supply sources. Now phone calls, internet searches, and reference checks can be quickly done on the e-marketplace. It will take care of all kinds of administrative work. Supply chain managers can easily explore the latest supply sources for available products or support the latest product development. It has also reduced the costs of exploring professional suppliers.
Internet auctions are the most extraordinary tool to create better competition for commodity-type items. Instead of purchasing agents or great negotiators who want to beat-up suppliers, the inter auction lets supplier competition help you grab the better price. The administrative costs to conduct the internet auction are very low when combined with the e-marketplace. Therefore even small and midsized businesses can also use such cost reduction tools.
Generally, RFID is the future technology, and it will continue forever. Finally, it is happening now. The primary purpose of the RFID is to create visibility in the supply chain without any need to scan or count. RFID tags can be scanned and passive by the reader. It would check out the complete pallet without any data entry.
The expensive RFID tags are always active and can broadcast what they are. Therefore products in transit can also be easily tracked with complete visibility. It prevents ordering products that are ordered without your knowledge. Hence it is clear that RFID is effectively useful to improve inventory accuracy in the supply chain and reduce labor.
How does IT let supply chain management increase sales?
Most of the business representative’s use supply chain management to reduce costs. But it can also be effectively used to grow sales to the next level. You can get help from industrial surplusCanada online marketplace to increase sales and reduce costs by following all the essential procedures.
Generally, e-marketplaces can help small businesses access new customers and sell more products. In the past days, when you were running a small business, you had the chance to hire your own sales force or manufacturers’ representatives. But with these e-marketplaces now, you have a global presence.
In the past, when you had surplus materials, you could call people in the industry; you may try to get away from them. But right now, you can put all these items on the surplus e-marketplaces and sell everything for more prices due to the exposure to various potential customers.
E-networks are helpful for you to get pricing control with more customers. It has been proved by professional supply chain researchers that the suppliers in e-network can negotiate power while renewing contracts with the leading firm in the supply chain.
For the large main firm in the supply chain, you have to connect suppliers to the e-network. At the time of renewing contracts, the suppliers who are connected to the e-network will have more probability of renewing than those who are not yet connected.
From the scenario mentioned above, you have now explored how information technology is used to revolutionize the supply chain. Without hesitation, it is the right time to contact Surpluscentral.ca, the multi vendor marketplace Canada. These experts can give you everything you want in a short period of time.