Digital Disruption: The Role of Information Technology in Logistics and Supply Chain Management

A significant advancement in information technology has already occurred across various industries, bringing about transformations in logistics and supply chain operations. The swift transfer of data is a direct outcome of information technology in supply chain management, fostering enhanced collaboration.

Information Technology plays a pivotal role in restructuring the entire distribution setup to attain higher service levels, reduced inventory, and diminished supply chain costs.
The progression in IT has bestowed companies with unparalleled opportunities to secure a competitive edge. Consequently, investing in IT becomes imperative for every firm striving to maintain a foothold in the market.

Supply chain management (SCM) revolves around the seamless flow of products and information among organizations within the supply chain. Recent technological developments empower organizations to easily access information within their premises.
The creation of an inter-organizational information system for the supply chain offers three distinct advantages, namely cost reduction, productivity improvement, and the formulation of effective product/market strategies.

The diverse roles of Information Technology (IT) in logistics and supply chain management encompass several key components:

#1-Electronic Commerce:

Electronic commerce encompasses various electronic communication methods, such as electronic data interchange (EDI), email, electronic fund transfers, electronic publishing, image processing, electronic bulletin boards, shared databases, and magnetic/optical data capture.

#2-Electronic Data Interchange (EDI):

EDI involves the electronic communication of information between two organizations, replacing traditional mail, courier, and fax methods. The advantages of EDI include quick information processing, enhanced customer service, optimized paperwork, increased productivity, improved tracing and expediting, cost efficiency, competitive advantage, and improved billing processes.

#3-Bar Coding and Scanner:

Bar coding, a sequence of parallel lines representing codified information, is scanned for data retrieval. This technology reduces paperwork and processing time, enhancing logistics system productivity through speed, accuracy, and reliability.

#4-SKU DIM (Stock Keeping Unit Dimension):

SKU DIM captures are conducted through weight machine integration, streamlining the measurement of consignment dimensions. This automated process improves accuracy, reduces processing time, and helps prevent revenue leakage due to incorrect dimension capture during billing.

#5-RFID (Radio-Frequency Identification):

RFID is an Automatic Identification and Data Capture (AIDC) technology that enables non-contact reading of inventory data via radio waves. It has proven effective in environments where traditional barcodes may not suffice, enhancing inventory management, tracking, logistics, and planning operations.

#6-Case ID Capture:

Case ID captures information on cases, defining each box case for a specific SKU with the number of units inside. This ensures accurate measurement and reporting of information, particularly in terms of Unique Object Measurement (UOM) defined as CASES.

#7-Route Optimization:

Route optimization involves software solutions for truck routing, delivery scheduling, and fleet management. These tools help reduce transportation costs by minimizing mileage, optimizing fleet utilization, improving driver productivity, and streamlining distribution networks.

#8-GPS Tracking (Track & Trace):

GPS tracking systems offer real-time monitoring of shipments, leading to reduced fuel consumption, improved productivity, and enhanced customer service. Contrary to misconceptions, GPS tracking is an invaluable tool for logistics companies.

#9-Last Mile Delivery Tracking on Mobility:

The last mile delivery, crucial in supply chain management, is facilitated by tracking systems. For enhanced B2C transactions, timely delivery is crucial, and technology aids in capturing and reflecting delivery information promptly on online platforms.

Final Thoughts

The impact of information technology on supply chain management encompasses enhancements in both internal and external collaboration, heightened accountability, establishment of novel customer relationships for needs identification, expansion of sales channels, performance optimization, and overall enhancement of the chain’s competitive standing.

The imperative to invest in technology is substantial and poised to rise. This trend is driven by the fact that competitors are similarly inclined to invest in technology, seeking to enhance the efficiency of their supply chains and innovate new business strategies for a competitive edge.

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