Discuss the role of information system in supply chain management.
Answers
Information is vital and can be collected and used differently by the various nodes of Supply Chain.
An example:
Sales information.
Some effective Supply Chain IS systems have automatic replenishment wish is triggered when an inventory level of a stocked item reaching its reorder point. Essentially an order is created from store to DC or warehouse.
The consolidated sales information from all stores can be used to adjust supply and manufacturing decisions. Further, demand planning functions can look at sales activity to validate, adjust or model future demand.
The above example shows how information can be used to avoid missed sales and overstocking and to automate store ordering (a highly manual and error prone task). This is aligned with the Supply Chain goals of having the right goods at the right place at the right time.
There are hundreds of other data points Supply Chain professionals can use to monitor the health and efficiency of their supply chain. Another example maybe DIFOT. This stands for Delivered In Full and On Time. This is a way to assess both your suppliers and yourself as a supplier. Are you able to meet the needs of your customers in regards to qty ordered and promised delivery date.
If not, why? The data will show you the bottlenecks in your Supply Chain and you would work to improve or eliminate these issues.
Hope that helps.