Supply Chain Management

First, organizations are moving towards a concept known as electronic commerce, where information transactions are automatically completed via Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT), Point of Sale (POS) devices, and a variety of other approaches. The late 1990s and early 2000s saw the emergence of on-line “trading communities” that put thousands of buyers and sellers in touch with one another.

The second major trend is increased competition and globalization of businesses. The rate of change in markets, products, and technology is increasing, leading to situations where managers must make decisions on shorter notice, with less information, and with higher penalty costs. At the same time, customers are demanding quicker delivery, state-of-the-art technology, and products and services better-suited to their individual needs. In some industries, product life cycles are shrinking from years to a matter of two or three months.

Third, the information revolution has given companies a wide range of technologies for better managing their operations and supply chains. Furthermore, increasing customer demands and global competition have given firms the incentive to improve these areas. But this is not enough. Any efforts to improve operations and supply chain performance are likely to be inconsequential without the cooperation of other firms.