A supply chain system (SCS)
is an information system used by a company to administer ties with suppliers.
These systems aids organisations involved in the supply chain to receive and
coordinate data important for the supply side processes. The goal of this
system is to allocate resources correctly from its raw state, to the state of
consumption as efficiently as possible with minimum expenditure. (Laudon & Laudon,
2010) With the rise of the internet and E-commerce, supply chain system is essential
there are many benefits that these systems bring.
The first benefit that SCS brings
is the reduction in cost in delivery of goods from one party in the supply
chain to another. This is done through technology that delivers goods faster
and more efficient based on information gathered by firms. For example, Coca-Cola’s
Automatic Storage and Retrieval System put their products in storage and then
to delivery in a fully automatic process, allowing shipments to be carried out
based on buyers’ demands, fully utilising cargo capacity in trucks. This leads
to a huge cut in land transport fees. Furthermore, the system collects energy
used in sending the goods and recycles it back to the electrical network of the
factory to save electrical costs. All of these savings contribute to higher
profits for Coca-Cola. (Coca-Cola, 2014).
The second benefit that SCS brings
is the quality assurance of products delivered between supply-side parties. Companies
use automated systems to save manpower, allowing workers to maintain quality of
products being transported and stored. Technology is also used to keep products
at their best quality. In 7-eleven’s, computer system transfers orders to
centralized distribution centers (CDCs) which adheres to strict conducts for
product-handling and thermal conditions. CDCs keep the goods at the best temperature
for the whole process of food preparation, arranging and delivery. They are
ensured the best quality through shipment from temperature-measured docks.
(O’Connor, 2016). Hence, technology in SCS can be used for quality assurance of
products which then lead to higher customer satisfaction.
The third benefit of SCS is better
efficiency of delivering goods and services. A good company’s SCS reduces its reliance
on third parties to ensure retrieval of goods even when the third party cannot
deliver. For example, retail company Zara conducts most of its production
within its own factories which enables them to adjust their output quantity,
periodicity and range of new goods for dispatch. Furthermore, they manufacture
most of their own fabric and use cutting-edge technology to trim and measure
fabric accurately, which reduces wastage of fabric. Overall, they are able to deliver
goods on time and save costs with the use of technology. (Kiger, 2016).
The fourth benefit of SCS is
increasing efficiency in supply chain for short shelf life goods. These goods
are difficult to manage due to wide range and volume of products, need for
temperature control and stringent traceability. (Mihaela, 2014) Supermarket
chains such as The Kroger Co. turn to Radio Frequency Identification(RFID) technology
from manufacturing to final sale to manage this problem. Radio frequencies scan
RFID tags to obtain information about goods stored or transported without
physical contact. RFID chips can be read multiple tags simultaneously, through
non-metallic materials without line of sight. This allows items to be tracked automatically
and quickly, optimising movements in warehouses, and reduce need for manual
handling of fast-paced operation of short shelf life goods.
However, implementing SCS has
its disadvantages too, due to high costs and risks of system implementation such
as inaccurate data from other enterprise systems and difficulty in implementing
software tools. An example is the failure of Hershey Foods in 1999 due to
issues in implementing new SCS which led to loss of higher orders worth $150
million (SupplyChainDigest, 2006). This shows that SCS may not always work when
implemented which leads to loss of high investments put into it.
In conclusion, even though
disadvantages may be present, it can be prevented if enough analysis is done to
make SCS will run smoothly. The benefits SCS bring to an organisation is far
greater than its disadvantages and will help it to gain competitive advantage(CA)
over other organisations by increasing efficiency and quality of goods,
decreasing labour and costs.
value chain illustrates the whole series of activities needed to bring a good
or service from its creation, through various stages of assembly, delivery to
end users and discarding after usage, with different steps that add value to
the goods along the way. (Normann
& Ramirez, 1998). These activities are divided in primary and support
activities which are supported by information systems(IS). Primary activities are activities most closely
involved with the manufacturing and distribution of goods and services which
builds value for the customers. Support activities ensure delivery of primary
activities is feasible.
off, there are five primary activities in the value chain. The first activity
is inbound logistics which is the retrieval of materials needed to develop the
product. This activity is supported by a warehouse management system (WMS)
which is a database driven IS that uses barcode scanners and Radio-frequency
Identification (RFID) to automatically obtain the location and quantity of
products. WMS then uses this information to keep track of the warehouse
inventory and automatically sends a message to the supplier if there is
shortage of a goods to be replenished. This greatly decreases delivery costs
and time. (K.N.Subramanya, 2012)
second activity is operations which involves converting raw materials into
products. An IS used is Computer Aided Manufacturing(CAM). CAM system controls
manufacturing operations operated by robotic machines which retrieves
instructions for each step and coordinates when the materials move to different
machines. This allows the product to be created much quicker. One example that
implement this system is Toyota, which uses CAM to build their cars.
third activity is outbound logistics which delivers the product to customers.
FedEx adopted the IS called COSMOS which is a tracking system that reports
every step of the delivery process. The information of the product to be
shipped is tabulated at every stage and enters a database which can be accessed
by the customer at any time. (Dietzel, 1986) This increases value of the
service as customers are given assurance that their product will be delivered.
fourth activity is Marketing and Sales, used to persuade clients to buy from a
company over other companies. Marketing and sales of a product can vary due to
the changing preference of people and the uncertainty that a person will buy
the product. Thus, Decision Support System(DSS) is a necessary IS which
analyses ,with proper judgement, information from multiple sources such as
sales figures and suggest new solutions to improve the marketing of a product.
fifth activity is Service. These are activities related to maintaining the
value of product or service after purchase. Equipment Maintenance Management
System is an information system applied here. It collects error data from
equipment and apply problem solving to find a solution for the customer. One
example is Fujitsu’s PLANTIA.
there are four support activities in Porter’s value chain. First will be
infrastructure which allows the company to maintain daily operations. Management
Information System(MIS) is used for infrastructure which monitors, controls and
administers routine activities of the firm. (Laudon & Laudon, 2010) MIS
also collates and report on company’s operations based on transactional data. An
example of company that uses MIS is Tesco.
activity will be human resource management which manages the inflow, skills and
welfare of workers. Workforce Planning System is used to source for skills of
workers and match them to relevant jobs and inform individual if a job has been
found. One example of is the RAFAELA system developed in Finland and
implemented in many hospitals in Finland to allocate nursing staff. (Stolletz,
activity will be technological development which relate to reducing information
technology(IT) costs, keeping up with current technology and maintaining
technical excellence. Computer-aided Design Systems(CAD) takes information from
engineers and transform these into precise design of product, ensuring great
product quality. An example is AutoCAD.
activity is procurement which is what organisation does to obtain the resources
it needs to run. Procurement Management Information System(PMIS) can be used to
collect and process procurement-related information worldwide to be used for
banks and bidders. (Dhakal, 2013)
conclusion, IS used in porter’s value chain help to increase the value of the
product through each activity to increase competitive advantage through
reduction in cost and time to build product.
is a global sharing platform, a system for information transmission and a mode
for partnership and communication between people with their internet-enabled
devices without being restricted to their geographic location. (Leiner, 2003)
This has significantly changed the quality of life for individuals in various
aspects of their lives positively as well as negatively.
first benefit that Internet brings is the ability to communicate with anyone in
the world almost instantaneously. This removes the need for the slow mailing
system. There are many ways people can communicate through internet, one of the
first being email, which is used for work, school and socializing. Over the
years, communication forms such as instant messaging, video call,
Internet-based calls emerged. One example is Whatsapp which is used by billions
of people worldwide to makes internet calls and instant messaging through the
use of internet devices, anytime and anywhere to communicate with anyone for
second benefit is access to wide range of information. The Internet is a
platform where everyone is able to share information they have publicly, which
can be access by other people. This information can come from individuals or
organisations such as the government, firms or schools. However to access the
information in the internet, search engines such as Google is needed. All the
user have to do is to type in words related to what he wants, and the engine
search the Internet for websites containing this search terms. This help the
user to get most information instantaneously, conveniently and complimentary.
third benefit is online entertainment. Due to the rise of the internet, many
entertainment industries have ported their services online. Instead of watching
movies in the cinemas, you can do so with online services such as Netflix which
streams movies to subscribers. This allows people to enjoy entertainment
anywhere that they like, such as on public transport to kill time. Other forms
of entertainment available online are games, music and books.
fourth benefit is increase of job availability. The advancement of the internet
has introduced new jobs as many industries make use of the internet to set up
businesses. Such jobs include web development, blogging and video streaming.
One example is YouTube, a video streaming platform where users upload original
video contents which gets paid based on number of views they get. This has
influenced many people, to earn a salary from producing and uploading their own
content and some of them even started a full-time career on YouTube. This shows
the impact of the Internet at creating new jobs for people.
fifth benefit is E-commerce. People no longer have to travel to shops to buy
goods. Internet has made E-commerce a possibility where user orders what they
want online, wherever they are. Amazon, for example, is a customer-to-customer
e-commerce service that allows user to search for items they want and connect
them to this third party sellers. User makes their payment and item is
delivered to them via a shipping company. This removes the need for users to
travel which means that they can get items from anywhere globally. And this
also makes is much easier for people to sell their own items without needing to
open a physical store which costs huge fees.
brings a number of disadvantages as well. The first disadvantage is stress
brought about by compulsive computer use due to the internet. The great
benefits of internet for socialising or entertainment has led to compulsive
computer or smartphone usage. This causes users to give up on more important
activities such as work or school which leads to career instability. A study conducted by Black D.W (1999) found
that 52 percent of subjects that reported compulsive computer use reported
academic problems and 43 percent were reported missing work or school due to
computer usage. 52 percent reported at
least one personality disorder. This shows that compulsive computer use
resulted in significant mental stress.
second disadvantage of the Internet is the presence of cybercrimes. The
Internet grants anonymity to many who may logon to forums or chat rooms
available. This enables some to take advantage of innocent individuals and
abuse their trust online. This includes cheating people of their money or
personal information. One example is the romance scam which started in around
2008. Criminals pretend to initiate a romantic relationship through dating
sites to cheat victims of large sum of money. In 2011 , the UK National Fraud
Authority estimated UK’s fraud costs to be more than £38 billion per year.
(Whitty, M.T. & Buchanan, Tom, 2012) This shows the rise of cybercrimes which
has been successfully launched and how much loss it can incur.
third disadvantages is viruses that spread through the Internet. Viruses are
programs that damage the functioning of a computer. It can slow down or crash a
computer and destroy data stored in hard disk. With increased use of Internet,
viruses spread quicker, most through web links and email attachment. In
November 2000, the Agency for Bad Decisions(ABD) was attacked by the renowned
‘ILOVEYOU’ virus which costs huge loss time equivalent to $250,000.00.
(Harrison, 2001) The cost of lost time for the defensive measures alone could
have already exceed the costs of their previous attack which shows how viruses
are so harmful even if taken with caution and can destroy organisations.
fourth disadvantage of the internet is the social barrier it creates. The
internet is constantly updated every second. New social media feed, emails,
articles flood the feeds which lead to people constantly being engaged with
their devices. This is evident everywhere. On the trains, buses, family
gatherings. As people do not want to miss out on global happenings, they put
their focus on their Internet devices and distant themselves from the people
who are physically around them. This leads to the loss of social interaction.
fifth disadvantage of the Internet is the health issues it may cause. Increase
use of the Internet through computers and mobile phones leads to many health
risks that stems from looking at the electronic screens for too long without a
break and sitting in the same position for too long, which for example may
cause obesity. A study conducted by Vandelanotte concluded that adults with
abundant leisure-time used on the Internet were more likely to be overweight as
compared to those that did not have Internet. (Vandelanotte, 2009)
summary, even though Internet has played a part in increasing and declining the
quality of life, it depends on the actions and precautions we take, such as
being aware of scams and viruses, to prevent the harm it causes and yield only
the positive aspect of the Internet. The Internet is still a growing platform
and has the potential of improving the quality of life even more when used
A strategic information system(SIS)
is one that modifies the organisation goals, processes, output or environmental
relationships to increase or decrease CA and achieve strategic alignment of a
business. (Turban, 2006) Sustainability is the ability to maintain initial
increase in business performance from strategic IT. (Kettinger, 1994)
The first role of SIS is
promote innovation which involves the use of new ideas and new technologies to
increase efficiency and help company achieve CA. However, companies do not just
develop new IS or IT due to the constant change in environmental factors that
may render these systems useless over time and create a loss for the company.
Companies develop new models and strategies for IS and IT to adapt to change in
environmental factors and do better. (Alshubaily, 2017) These strategy allow
the businesses to perform well overtime, despite the changes that may affect
its SIS and this shows that there is such thing as sustainable strategic
advantage from IS.
The second role of SIS is
improve information quality that refers to quality of the system’s outputs,
namely reports and display screen. Better quality of output would result in
better understanding on information leading to increase in decision-making
efficiency and quality. This speeds up the business process and enable the
company to deliver the product faster. However, information output by IS is
inconsistent with the users’ needs. Thus increasing information quality
requires high maintenance costs and disrupts the operation which will lead to
higher overall costs. (Alshubaily, 2017) Thus this shows that IS can be
non-sustainable long run.
The third role of SIS is increase
operational efficiency. Operational efficiency is the optimal use of resources
to improve product output by minimizing waste while taking advantage of top
manpower, technologies and processes. (Alshubaily, 2017) However as seen from
figure 4, taking the best IT and IS increases CA for awhile before it gets
imitated and become a standard in the industry, reducing CA. Company needs to
enhance their IT/IS overtime to maintain CA over others. An example is American
Airlines’ Sabre system which constantly enhance their seat inventory management
system to a complex revenue management and multilayer pricing facility. (King,
2015) This helped them to achieve sustainable strategic advantage.
As seen in the above examples
sustainable strategic advantage can be gained in the use of some SIS through
the repositioning of IT and IS to withstand market changes. Thus, I agree to a
large extent that there is such thing as sustainable strategic advantage to be
gained from the use of IS.