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Application of ICT tools in Supply Chain Management

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Role of Cloud computing, traceability, RFID and other ERP solutions in Supply Chain Management

Many companies of business have resorted to using ICT technologies in their supply chain management departments. This comes about due to the numerous advantages that result from incorporation of these technologies in supply chain management. Some of the ERP technologies incorporated include RFID, cloud computing and traceability technologies. These examples and their roles in Supply chain management have been explained below.

Cloud computing is the provision of services of computers over the internet rather than on normal hardware computers. These cloud services are offered by cloud computing service providers like Azure and Amazon Web service. Cloud computing creates the possibility of tracking products at all the different supply chain steps from manufacture up to retail. This way, it reduces losses due to loss of products. It is also possible to track and reroute shipments sent to wrong addresses during transport. Other advantages include but are not limited to one, ease of scalability. This comes in the sense that cloud network coverage is worldwide and its usage in supply chain management presents opportunity for growth. Because it is an automated process, there are also advantages of flexibility and efficiency (Clervi, 2015).

Radio Frequency Identification is the usage of machines that capture data encoded on its smart labels. This is achieved through a reader which transmits the captured digital data via radio waves. This technology has enormous advantages in various subsections of supply chain management. In inventory management, RFID technology eases the processes of monitoring, controlling, storage and usage of materials. The technology has the ability to read through items thus speeding up the general process of inventory management while at the same time reducing the number of human errors made during the process (Mansuri, 2020).

In warehouse management, RFID technology and other ERP software used are automated to receive and distribute products for shipment. They also increase the processes of identification of products and their validation on reception and distribution. This issues a greater control of the storage warehouse management. In the retail sector, the ERP tools ease inventory management by showing exactly which products are available and which ones are out of stock. This is achieved through unique identification codes for each item.

Response of the Industry towards the use of ICT and ERP tools

The incorporation of ICT usage in supply chain management departments of various industries has been positively received. This can be attributed to the various advantages that come with incorporating these systems in a company. Some of these positive advantages that ERP has conferred on various companies are explained in the subsequent paragraphs.

Implementation of ICT usage by different organizations has given the companies a competitive advantage over their counterparts who have not implemented ICT usage in their supply chain management systems. Why is this so? The use of ERP tools like E-procurement have enabled the companies using this software to cut down significantly on the time required to carry out negotiations, fill out paperwork before eventually securing tenders. This creates a better working environment for these companies therefore giving them a competitive advantage.

Secondly, automated inventory, warehouse and retail management processes have been found out to increase productivity. This comes about because the workers in these departments have an ample time to focus on other activities to make more profit for the industry because all the processes that required their constant attention have been made easier.

Accurate forecasting has been enabled by the fact that there is reduction of human errors. The automated processes of warehouse management and inventory management have by a large percentage reduced calculation errors and other human related errors. This gives the company an advantage in forecasting and predicting future thus easy time in strategic thinking and risk management processes (Wedell, 2019).

Finally, the incorporation of ERP tools like cloud computing have enabled the ease of scalability for companies. Since there is a wider range of market being accessed and with the efficiency and reliability of automated processes, it is easy for the company to upscale its resources to reach wider markets.

Effectiveness of E-procurement and E-auction software to industries

Electronic procurement software in businesses and organizations is the use of automated systems that act as human intermediates in the electronic evaluation of markets and products, electronic sourcing of the best providers of the products of services, electronic designing of the systems to acquire the product or service and the electronic negotiations to secure the product or service for its respective company. E-procurement has numerous advantages including but not limited to the following.

E-procurement reduces the cost required to carry out the normal procurement process. The costs are cut in the avoidance of negotiation process, balancing and writing of tenders and market evaluation. Secondly, it increases the transparency of spending, through its online records, it is easier to access the expenditure and costs incurred during the process of tender acquisition and procurement. This eases the compliance to policies and authorities.

It also increases productivity. Since most of the work is done by the software system, much of the paperwork including letters and written proposals are done away with. This leaves ample time for the procurement officers to focus on activities that would lead to increased profit for their companies. Finally, E-procurement leads to the reduction in transaction fees. Since most of the activities performed are automated, the amount of transaction costs required to run the procurement process is cut down thus a cost-effective system.

E-auction systems in business environment refers to those software used by companies in the acquisition of products or services required by the internal staff of the company (Patel, 2018). This is a purely automated process that sources for the product or service, analyzes its best seller and finally recommends it for buying. It has numerous benefits as explained in the subsequent paragraphs.

To begin with, it reduces the cost of purchasing. This is because it cuts down on the amount of resources dumped in searching for and analyzing the market to find the right business to purchase the product or service from. Further, it points out and sends recommendations to purchase the product giving alternatives for the same. This cuts down significantly on expenditure of the company.

Two, there is increased market efficiency with the use of E-auction. This comes about because of the fact that the software analyzes market of the product that the company is supposed to secure. It does this by analyzing the ratings of the product by different customers and also reviews on the number of clients who have purchased that same product in the market. This way, the product that is finally bought by the company is the best in terms of quality thus efficient market. Finally, the whole process of auction done electronically by the software eases the procurement process since there is elimination of written proposals and requisitions. The process is also made faster and more efficient.

Analysis of Business and Processes

The usability modelling of ICT in business has proven to be an efficient and effective in increasing marginal profits and achievement of business goals. Finding the optimal solution for a company in terms of which software to use depends ultimately on the business goals. Since different businesses have different goals, the software to be chosen is one which aligns with the particular business goal and will help in achieving it. In terms of cost and schedule analysis, the usability modelling has been found to efficiently reduce the amount of resources spent in business processes including auctioning and securing of tenders. This is because most of the automated processes don’t require tedious activities. The automation of the processes has also cut down on the time used ( Srinivasan, 2018).

Website enabled supply chain processes have been also enabled by ICT. Procurement systems have proven effective in reduction of costs and time required to complete the processes while also increasing productivity of the business. Web enabled order tracking systems have been used in the retail stage to enable invoice management to know what products are available and which ones are out of stock. Warehouse management systems have increased inventory management efficiency and reliability by reducing human errors. Finally, customer relationship management has been increased tremendously by the use of software that allow reviews and ratings of the products thus ideas for improvement of the products.

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