Article CritiqueInnovations in technology and management practices have produced a distinct paradigm shift since 1970. Even though companies are now focusing on customer satisfaction as a competitive weapon, the cornerstone of competition is still cost-minimization and affordability. With the invention of Internet, companies and manufacturing firms have been given the opportunity to effectively improve their supply chain management system.The article "New challenges in managing supply chain" by Derek Maggs explores the definition of supply chain management (SCM) and then focuses on the relations among SCM systems, enterprise resource planning (ERP), and information technology (IT).The author argues that the aim of SCM is more than just cost reduction. He further argues that SCM tries to minimize the costs of production and in the meantime to increase the quality of value added. Accord ...view middle of the document...
At the end the author outlines the goals, such as reduced inventory cost, that implementers are trying to achieve by integrating IT solutions into SCM systems. In this journey, IT implementers are faced with the globalization challenge. As a result, we are expected to see new business models and new economic relationships in the future to overcome this challenge.The article is well focused around the fact that IT solutions will improve the efficiency of current SCM systems by making automated procedures. To justify this, the author uses an estimate from an analyst group which claims that its worth will increase from US$1.8 billion in 1999 to US$ 23 billion by 2004. There were some general claims made by the author regarding the issue of globalization that were not backed up with any theory or research.In general, information technology plays a vital role in every industry in recent years and it will continue to have a major effect on the way we conduct business. For example, IT solutions enable manufacturers and companies to accomplish their tasks in a more productive manner.However, in my opinion, with all these advances in technology the principles of supply chain management still remain unchanged. Therefore, we will still have tradeoffs since we can not reduce inventory to zero and increase response time unless we have a huge amount of excess capacity in production distribution system. Furthermore, the uncertainties in supply chain management still exist. Web communication removes only some of the uncertainties related to supply chain management. Thus companies still need to work out some counter measures for uncertainties. In other words, information technology allows us to reduce the information processing time but it is the actual physical flow time that is difficult to reduce.In conclusion, the article clearly describes the use of IT systems and their effect on SCM systems. It further illustrates the current challenges faced by the IT solution providers to implement highly efficient SCM systems.Reference:Maggs D. (2000). New challenges in managing supply chain. Business Times.
