Benefits of IT in supply chain management: an explorative study of progressive companies

• Published in: International journal of physical distribution & logistics management 2005-02, Vol.35 (2), p.82-100
• Main Authors: Auramo, Jaana, Kauremaa, Jouni, Tanskanen, Kari
• Format: Article
• Language: English
• Subjects: Automation; Case studies; Collaboration; Communication; Communication technologies; Competitive advantage; Cost control; Electronic commerce; Enterprise resource planning; Information; Information technology; Internet; Logistics; Qualitative research; Statistical analysis; Suppliers; Supply chain management; Supply chains
• ISSN: 0960-0035; 1758-664X
• DOI: 10.1108/09600030510590282

Purpose - To provide empirical evidence of benefits from IT in supply chain management.Design methodology approach - Data in this qualitative study were collected through multiple enquiries. SCM consultant interviews gave an understanding of the current state of practice. A survey of 48 progressive companies was conducted to identify what IT solutions they have implemented in SCM. This was followed by 18 in-depth case studies to identify the mechanisms for achieving benefits of IT in SCM.Findings - Based on the empirical studies five propositions are presented on the use and benefits of IT. First, successful companies have developed focused e-business solutions for improving customer service elements that are most important in their business. Second, improved efficiency allows company personnel to focus more on critical business activities. Third, the use of e-business solutions improves information quality. Fourth, e-business solutions support planning collaboration and improved agility of the supply network. Finally, to gain strategic benefits, the use of IT has to be coupled with process redesign.Research limitations implications - The sample of companies used in the study was selected by expert assessment and is biased towards companies willing to discuss and share results openly. Additionally, the focus of the paper was on single companies and not on the entire supply network. However, the findings of this study present an opportunity to further develop understanding of the underlying mechanisms of how IT investments benefit supply chain management.Originality value - The paper fulfils an identified need for in-depth case studies that analyze the possible mechanisms behind the practical benefits of IT in supply chain management.