For instance a smaller size supplier may maintain a line purely to service a larger company. When this happens it makes sense to share information between the companies and maybe even to go as far as integrating systems for mutual benefit.
IT approaches to SCM.
In the 1970s procurement professionals played a key role in cutting costs to help companies compete during the energy crisis, in the 1980s procurement had to again find ways to cut costs to fight against the competitive advantage of high quality and low priced Japanese products. From the mid 1990s to present, procurement professionals are combining best practices with technology to streamline processes, control costs, achieve operational efficiency and deploy strategic procurement initiatives across the enterprise.
Data Storage.
Step one when looking at any company would be to examine how it stores its information. Many companies will still be using antiquated databases of different types or may even still be reliant on paper records. Centralising the companies' data into a modern relational or object orientated database would immediately reduce the amount of redundant or duplicated data. This approach would allow departments the ability to use data from other departments to reconcile their own data, highlighting errors that would otherwise have not been apparent.
Whilst this is probably the most important factor for any company, it is often the most difficult to make changes in due to the extremely high initial costs and disruption incurred. However, without a well structured database a company will find its ability to make progress in other areas hampered.
Operational Processes.
In this area are grouped together procurement, factory/warehouse management and logistics. These areas can all be greatly assisted by modern improvements in communications and software. A great deal of time and money is wasted by companies still relying on the use of the telephone, fax or post to communicate between these departments and with external sources.
