How does ICT enable Supply Chain Integration and Agility?

Essay by jpbarrettUniversity, Master'sB, February 2004

download word file, 14 pages 4.4

How does ICT enable Supply Chain Integration and Agility?


It is often claimed that information communication technologies (ICT) will be for the economy what steam and machine power were to the industrial revolution (Van Hoek 2001 ). The new economy is increasingly focused on knowledge development and distribution, using ICT and software to drive an innovation explosion (Quinn et al 1997 ). The deployment of ICT is driven by the desire to reduce cost, increase efficiency and improve communications.

Competitive success, to a large extent, depends on how well the entire supply chain delivers value to its ultimate consumers, relative to its competing supply chains (Christopher, 1998 ; Clark and Hammond 1997 ). ICT and specifically e-business enhances channels to market, integrating the value chain and converging industry.

Competitive advantage is suggested to comprise of three dimensions:

Figure 1 Treacy & Wiersema 2002 Competitive strategies model

This paper will look at two key areas of supply chain development, agility and integration and how ICT is a key enabler in meeting Supply chain Management key objectives:

1.Getting the right product to the right place at the least cost

2.Offering the right customer service with the minimum inventory

3.Reducing cycle times (Katok 1998 )

Supply Chain Integration

Intense competition is driving companies to evaluate their strengths ("core competences" Hamel & Prahalad 1989 ), focus on what they do well and use specialist partners to perform the other functions. It is suggested that brand owners will focus on core processes of innovation, product development and brand management, and fulfilment activities such as manufacturing and logistics will be increasing outsourced (e.g. Cisco see appendix 1) (Price Waterhouse Coopers 1999 ).

The supply chain is engaged with the integration of the company, its network of suppliers and customers through information visibility...