1.1 Background of the Study
Information Technology (IT) is where an organization uses technology to acquire, store, process and organize data (Rajaraman, 2004)…….Best Information Technology As graham et.al,(2013) states, IT involves software, hardware, Firmware and middleware as well as network infrastructures, platforms, operating systems and the worldwide web.New technologies, global competition, and increased customer demands are forcing organizations to reconsider how they can take advantage of Information Technology (IT) capabilities to better manage their supply chains.
Supply chain is a network that consists of suppliers, manufacturers, warehouses, distributors and retailers who coordinate their plans and activates in order to convert raw material to finished goods (Chandra and Grabis, 2007) ….Impact of it on dvt of SC where as Supply chain management (SCM) links a firm with its customers, suppliers and other members of the supply chain system, including transportation, freight forwarding and warehousing service providing companies. The management of the supply chain is basically management of the relationships and activities among the members of organizations (system) in the supply chain.
In today’s world, the business environment is fast and complex and there must be an efficient and effective supply chain. Firms keep on procuring materials for manufacturing and some to deliver to customers at the right place and the right cost. In order to improve their operations, companies must find ways of improving their flexibility and responsiveness. This will be done by changing the strategy on operations, methods and technologies that include implementing the supply chain paradigm and IT.
According to Boone and Ganeshan (2007)…Best, use of internet and related technologies has enabled companies to do business with other firms outside their scope as efficiently and effectively as they conduct business within themselves. Companies use Information technology in various ways. IT is usually one of the best ways to cut costs and also improve the performance of the firm. Most large firms use Information Technology to synchronize processes along their supply chain. These processes include upstream procurement internal production, downstream sales, customer service as well as information sharing along the supply chain.
According to Chopra ; Meindl (2001) ….Best Intel company Implemented an online ordering application that saw hundreds of clerks being laid off their jobs. With E-business technologies, companies are able to conduct business transaction online. This includes transfer of document like orders, invoices, and payments. Enterprises Resource systems such as CRM and Inventory management systems are being used by companies to integrate activities in the supply chain. Da Silveria and Cagliano (2006) ….Best mention that the invention of internet business and business applications has created new innovation opportunites for supply chain management. Organizations in the supply chain use Information Technology for their supply chain activities.
1.2 Statement of the Problem
Organizations are reexamining how to conduct business due to new technologies and the increasing intensity of competition (Graham et.al, 2013)….Best Thus, companies are reinventing their supply chains in order to succeed and meet the new customer driven challenges. This is in order to gain and keep competitive advantage by attracting more customers and defending against the competitive forces.
Reducing inventory cost is a major advantage and companies are seeking ways to please customer demand for fast and efficient service and also searching ways for managing the entire supply chain from raw materials to delivery of finished products to the customers.
Information Technology has a very big impact on the supply chain. It has significant influence in cutting costs. Small and medium firms in Ethiopia that have manual systems in their supply chain activities incur a lot of costs. The main problem of a manual system is the time spent in searching records, data redundancy, and no updated records. This hinders the performance of the firms in their supply chain activities. IT will help in reducing these problems and they will be able to focus on getting new markets for their products, sourcing new suppliers, responding faster to customer demands and gain competitive edge in the market.
For companies to achieve a competitive edge, they must maximize the use of Information Technology. This will enable organizations to come up with ways of reducing inventory cost, improving the lead time for products and integrate supply chain with the various functions of an organization (Austin ; Nolan, 1999). .Best Managers need to be up to date on information such as inventory, customer demand and supply lead time.
Despite the role of IT in supply chain management as a competitive tool, the supply chain operational excellence in the brewery in Ethiopia is under researched and there is knowledge gap how well IT can be used in supply chain management practice in Ethiopia. As a result, there was little insight about the role of IT in Supply Chain Management in the brewery companies Ethiopia. This knowledge gap in the subject of this thesis in this competitive industry make a reasonable sense for conducting this research study.
Consequently, this thesis will focus on investigating the role of IT in supply chain management practice in the case brewery companies (Brewery Company X and Brewery Company Y) located in Addis Ababa.
1.3 Research Questions
The study is going to be guided by the following research questions:
? What is the relation between Information Technology and Supply Chain Management in beer industry?
? How are beer manufacturing firms use Information Technology in their Supply Chain?
? What roles do IT play in affecting the knowledge performance of firms in Supply Chain?
? What are the benefits of IT on management of supply chain?
? What are the effects of IT system on supply chain management?
1.4 Research Objective
1.4.1 General objective
The overall aim of the study will be to investigate and measure The Role of Information Technology in supply chain management/process of brewery production; the case of 2 beer factories in Addis Ababa and identify gaps based on the literatures reviewed to get better insight about the role of IT in supply chain operations in the case brewery companies.
1.4.2 Specific Objectives
Specifically the study tries to address the following key research objectives:
? To determine the benefits of IT in the case Organization.
? To identify the various IT applications used in the organization ; how they have been deployed in the company for it to maintain its competitive position.
? To determine how IT role has contributed to efficiency and effectiveness of a supply chain.
1.5 Significance of the Study
This study will benefit the professionals in the supply chain. This is because they will be able to appreciate the value that Information Technology has on the Supply Chain and how they can improve their services in the supply chain in order to attain a competitive edge. Small and medium firms that practice supply chain in their daily activities will also benefit from the study.
The finding will also give an insight to other supply chain partners (the suppliers, distributors, Retail outlets, transporters, etc…) about Information Technology in the chain of the case breweries industry. It is noted that most of the firms in Ethiopia do not have improved Information Technology system that help them improve the activities.
Academicians will also benefit from the study. They need to put more emphasis on the importance of Information Technology in the supply chain field. As this research study has its own scope limitation, other researchers can also use it as starting point to further capitalize on IT’s Role in Supply Chain which have not been addressed in this study.
1.6 Scope of the Study (Delimitation of the Study)
The study will focus on the role of Information Technology on Supply Chain Management. The geographic scope of this study is limited to two case brewery companies located in Addis Ababa.
The duration in which data will be collected is in the month of Aug 2018.
1.7 Limitations of the Study
Since this study is a multiple case study, it lacks external validity or generalizability of the findings to the rest of the brewery companies in the industry.
1.8 Organization of The Research Report
The paper is organized in three chapters. The first chapter constitutes the information of the study. It includes background statement, statement of the problem, research questions, and objectives of the study, significance of the study and the scope & limitation of the study.
The second chapter reviews the related literature. It contains other studies & writings on IT, SCM and their application on business. The third chapter shows the method of study that is going to be addressed during the study.