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Running head: HOW INFORMATION TECHNOLOGY IMPACTS SUPPLY CHAIN

How Information Technology Impacts Supply Chain
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HOW INFORMATION TECHNOLOGY IMPACTS SUPPLY CHAIN

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How Information Technology Impacts Supply Chain
Abstract
Effective management of supply chain activities has positive implications for the
performance of firms. Trends show that the instability and uncertainty of the business
environment has increased significantly. In order to survive and thrive, enterprises should ensure
that their supply chains are strong and resilient. Information technology has massive impacts on
the overall wellbeing of the activities of supply chain. In addition to helping organizations to
satisfy the needs of the clients, the technology tools enhance communication amongst major
stakeholders, improve efficiency, accuracy and transparency, strengthen partnerships between
different stakeholders, eliminate errors, help firms to meet legal requirements, empower their
employees, and resolve problems, and foster innovation and creativity. Also, technological tools
improve the management of warehouses and inventory control. Using them, managers and
organizational leaders improve the logistics of their companies, promote the health and security
of drivers, and enhance the performance of their workforce by boosting their morale.
Key Words: Supply chain, impact, information technology, firms

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Introduction
The current corporate sphere is uncertain and unstable. The status is attributable to
various factors including the changing consumer needs, increasing complexity of the supply
chain, offshore production, increased global competition, and the technological advancements
amongst other factors. In order to cope effectively with the uncertainty and the risks that relate to
supply chain, firms need to establish resilient, robust, and efficient supply chains. Due to the
severe and intensive competition, companies should be responsive, develop customized products
and services, and improve the efficiency of their operations in order to attain a competitive
advantage. Essentially, they face the challenge of offering quality in order to meet customer
satisfaction as well as reasonable prices and speed.
Ideally, supply chain activities are information intensive. Thus, information technology is
imperative for helping enterprises to improve the performance of their supply chain. Information
systems comprise of interrelated components that retrieve, collect, filter, process and store,
interpret, and disseminate information in order to support d ecision across and within partners.
The distribution of high quality and accurate information enhances the competitiveness and
profitability of an organization. Supply chain performance is a product of quality,
responsiveness, efficiency, and flexibility. To increase profitability and sustain growth,
companies should leverage new information technology tools to improve their supply chain
activities. It is against this background that this paper provides a comprehensive review of how
information technology impacts the activities and operations of supply chain.
The Influence of Information Technology
In their research, Melnyk, Narasimhan and DeCampos (2014) indicate that organizations
use information technology to manage purchasing in their supply chains. In particular

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information technology supports a variety of procurement operations such as checking the prices
of vendors, communicating with vendors, and buying from vendor catalogs. Negotiating prices
and bargaining are some of the activities that employ information technology tools too. Also, the
tools enable firms to receive questions from vendors, furnish the vendors with relevant and
sufficient information, and pr...