The Role of Technology in Supply Chain Management
Since the integration of technology in SCM, the aviation industry has been able to provide complete customer satisfactory services, which have simplified the customers travel procedures. Apart from that, technology has also enabled many companies to experience an increase in their revenue, utilize their resources maximally, and to be able to counter stiff market competition among others. As a matter of fact, market competition is tougher than before. Thus, there is a need for firms to come up together and form supply chains that are more competitive and beneficial to individual firm. Most modern firms have opted to adopt the technology system in supply chain for three major reasons including the ability to facilitate sharing of information within companies, its ability to enhance strong collaboration between different members of a supply chain, and ability to synchronize both intra and inter firm operations. Therefore, the crux is to highlight the role of technology in supply chain management in regards to sharing of information, enhancing collaboration within supply chain members and in synchronization of inter and intra company operations.
In the current business environment, technology has become a very useful engine that has enhanced sharing of information within the company staff and among the members of the supply chain. Evans (2001) argues that major companies have conneced their data systems among their sales agents, data stores, and their opponent companies. In fact, there is a global distribution system (GDS), which collects the information in demand and supply the data from online retailers and agents across the world before submitting them to one database, where the information is compiled for use. This is very common in the aviation industry; for instance, the British Airways uses this system to link its travel agents and online retailers to the airports across the world. This reduces the inconveniences of underbooking or overbooking (Evans, 2001). Consequently, it improves their efficiency in service delivery and cost reduction through proper utilization of space and dispatching of flights. Apart from that, the technological system also links the company with its business associates such as Lufthansa Airlines. This broadens the market and enables the company to share resources.
As deduced from above, technology also plays a crucial role in enhancing collaboration within the supply chain. Today, different companies opt to form alliances for many different reasons such as the need to benefit from economies of scale during maintenance of the aircraft, the need to have higher bargaining power during service delivery among other reasons. As a result, the companies have formed alliances, but they need to communicate and merge most of their assets and crew. This exhibits how esssential ICT is to these alliances. For instance, veteran airline services like Lufthansa and Austrian Airlines have merged their resources through the GDS. Connolly & Sigala (2001) contend that this has enabled them to share resources and maximize their revenues through the increased sales. The members of the supply chain also enjoy the economies of scale thus being able to survive the stiff aviation competition apart from benefiting from the technical advantages that come with the supply chain.
Technology has also enabled synchronization of inter and intra firm operations. Today, it is very easy for organizations to purchase maintenance items through the e-procurement systems (Connolly & Sigala, 2001). Through the GDS, it is possible to manage the crew and assign tasks to crews, administer the fleet, control the number of passengers apart from controlling stations. The GDS is able to link the operating systems of different airline desks to members of the supply chain. The GDS has enabled the airlines to exploit market intelligence. Therefore, it has simplified the managerial process in the aviation industry.
To sum up, most airline services have adopted the supply chain systems in order to fit in the competitive global market as technology is very useful in enhancing sharing of information, synchronizing operations, and facilitating collaborations as discussed above.
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