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Unit 14: Information System in Retailing

redefinition of ICI’s role not only generated much higher margins for the business, it also Notes
gave ICI a much more defensible competitive position”.
8. Competitive intelligence. IT provides competitive (business) intelligence by collecting
and analyzing information about products, markets, competitors, and environmental
changes (Guimaraes and Armstrong, 1997).

Note Information systems are being used in supply chain to promote strategic agility.

14.3 Flow of Information and Products in Supply Chain

The design of information flow in supply chains has traditionally followed the physical flow
along the chain (Lewis and Talalayevski, 2004). Sub-optimal supply chain performance, in many
cases, has been the result of poor information sharing. Adopting advanced information systems,
which enable efficient information sharing between the members of supply chains and over
supply chain phases, may however change the situation. Instead of suffering from scarcity of
data, the challenge for companies is to achieve good quality information (Wagner, 2002) and to
decide which data can be utilized in decision making to improve supply chain performance and
which data can be ignored.

Information flows in the supply chain are bidirectional. From an SCM perspective, it can be
argued that managing the information flows is the most critical of the activities described in this
article. This is because the flow or movement of materials or money is usually triggered by an
associated information movement. Effective management of material and money flows is,
therefore, predicated upon the effective management of the related information flows. It is not
surprising, therefore, that recent years have seen a huge interest in this area in the literature (see,
for example: Evans et. al., 1993; Mason-Jones and Towill, 1998). The bullwhip effect to which
Forrester (1958) referred is essentially the product of poor information management in the
supply chain and leads to a requirement to hold excessive inventory levels. The corollary of this
is that if levels of demand visibility are high throughout the supply chain then inventory levels
can be reduced. As Christopher (2005) notes, good information effectively becomes a substitute
for high levels of inventory.
Recent years have also seen rapid developments in ICT used to facilitate SCM. McDonnell et al.
(2004) proposed a taxonomy of supply chain ICT solutions which identifies four primary
categories as follows:

1. Point solutions: used to support the execution of one link (or point) in the chain (e.g.
warehouse management systems or WMS);
2. ‘Best of breed’ solutions: where two or more existing stand-alone solutions are integrated,
usually using middleware technology;
3. Enterprise solutions: based on the logic of enterprise resource planning (ERP), these
solutions attempt to integrate all departments and functions across a company into a
single computer system that can serve all those different departments’ particular needs;
and
4. Extended enterprise solutions (XES): refers to the collaborative sharing of information
and processes between the partners along the supply chain using the technological
underpinnings of ERP.
The move away from point towards enterprise solutions in many ways reflects the shift from
internal and functional, to external and process, management orientations in recent years (as

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