Information Technology in Supply

Chain Management
T. N. Varma*, D. A. Khan**
Department of Computer Applications, National Institute of Technology,
Jamshedpur, India. Email:[email protected]

Abstract
The exponential growth of Information Technology (IT) with communication technology in Supply Chain Management (SCM)
is playing critical role in optimising decisions of the supply chain network flow for achieving organisational competitiveness,
improving higher service level, lowering inventory, supply chain costs and reducing electronic risks (e-risks). To achieve integration
and effective information sharing across and beyond the organisations, IT in SCM is also required. The organisations are moving
towards the virtual supply chain with help of rapid changes in technology and IT applications viz; Electronic Data Exchange
(EDI), Radio Frequency Identification (RFID), Bar Code, Electronic Commerce, Decision Support system, Enterprises Resource
Planning (ERP) package, etc. It is also easily applicable in curbing the e-risks. Understanding the role and application of IT in
managing and curbing e-risks of Supply Chain is the basic theme of this paper.
Keywords: Information Technology, Supply Chain Management

Introduction 2002). Many researchers discussed the relation between

IT and SCM viz.; Internet increases the richness of com-
munications through greater interactivity between the firm
In age of paper-based transaction and communication, the
and the customer (Watson et al., 1998), IT as cures for
information flow in supply chain networks was time con-
Bullwhip effect in Supply Chains (Lee & Whang, 1997),
suming and error prone. Due to globalisation, organisa-
Internet as the foundation for new business models, pro-
tions had started the changing the way of communication,
cess and new ways of knowledge distribution (Laudon et
implementation of technology, growing diversity of busi-
al., 2000), IT in SCM provides a reduction in cycle time,
ness transactions and process improvement for sharpen-
a reduction of inventories, a minimisation of the Bullwhip
ing the business performance through IT applications in
effect, and improvement in the effectiveness of distribution
their Supply Chain Networks. Supply chain management
channels (Levary, 2000), applications of Radio Frequency
(SCM) is an integrated and complex network concept that
Identification (RFID) in supply chain (Gould, 2000), ad-
refers to the sum of all the processes starting from the
vanced information and manufacturing technologies for
procurement of the raw material from the manufacturer/
better managing their supply chains (Talluri, 2000) pro-
producer and ending with delivery of the end-product
viding information availability and visibility and allow-
to the consumer (Silver et al., 1998) as far back as the
ing decisions based on total supply chain information
1950’s. Due to increased complexity of data, uncertainty
(Simchi-Levi et al., 2003), Electronic Data Interchange
risk in supply chains are growing (Christopher & Peck,
(EDI) (Ngai & Gunasekaran, 2004), inadequate enter-
2007; Hillman & Keltz, 2007) that lead to an increasing
prise without IT systems (Davenport & Brooks, 2004),
vulnerability of electronic risks (e-risks) also. Hence the
e-commerce applications (Chou et al., 2004), increasing
upstream and downstream integration of supply chain
information sharing within organisations and between
network is the basic requirement to fulfill the objectives
organisations with inter-organisational systems (Chen
of Supply Chain Management. The IT-enabled SCM can
& Paulraj, 2004), IT is closely related toprocess chang-
easily manage the flow of information with key business
es, most of the benefits are overlapping and interlinked
processes, materials, money within and outside the net-
(Auramo et al., 2005), Electronic Data Interchange (ERP)
works and contributes to firm profits by improving quality
(Davenport and Brooks, 2004), mobile agent technology,
and by reducing coordination costs and transaction risks
as applied in an e-commerce application (Patel, R.B &
(Stroeken, 2000; Mabert et al., 2001; Sanders & Premus,

Electronic copy available at: https://ssrn.com/abstract=2921128

 36 Journal of Supply Chain Management Systems Volume 3 Issue 3 July 2014

Garg K, 2004) inter-organisational information systems need it and in the format they need it. This is where IT
(Da Silveira & Cagliano, 2006), designing collaborative comes into role and it consists of hardware and software
planning forecasting and replenishment (CPFR) (Danese, applications. IT also plays an important role in integrating
2007), online ordering (Kull et al., 2007), SCM and IT suppliers, manufactures, distributors and customers to
(van Donk, 2008), supply chain coordination and integra- satisfy the quantity and quality of products. Organisations
tion, uncertainty and variability (Ambrose et al., 2008), can gather vital information along the entire supply chain
spread sheet based vendor (Mahamani & Rao, 2010) and react quickly to any predictable market changes,
, role of IT in SCM environment (Prasad, et al, 2010), thereby gaining competitive advantage by effectively
importance of e-procurement for an information technol- utilising SCM (Tummala & Schoenherr, 2008). Providing
ogy chain (Ronchi et al., 2010), SCRM approach for risk information availability and visibility, enabling a single
mitigations (Tummala & Schoenherr, 2011), e-commerce point of contact for data, allowing decisions based on total
depends on information infrastructures and telecommu- supply chain information and enabling collaboration with
nications for its development (Gilaninia et al., 2011), partners are the objectives of IT in SCM (Simchi-Levi et
RFID for SCM (Nair, 2012), e-supply chain and software al., 2003). The functional roles of IT in SCM have been
agents (Nair, 2013) etc. Organisations have realised that outlined as Transaction Execution, Collaboration and
it is not possible to achieve effective and efficient sup- Coordination and Decision Support (Auramo et al., 2005).
ply chains without a sound, robust and well integrated en- IT systems such as data integrity, real time availability,
terprise wide information system (Davenport & Brooks, visibility and processing capability of information and
2004). The exponential growth of Information and standardisation of business process are expected to
Communication Technology (ICT)in the last decade has facilitate better matching of supply and demand between
significantly changed the paper-based communication to supply chain members and create an excellent backdrop
e- communication, which is emerging as a serious threat for embarking on integration with external partners in
of cyber-crime through computer facilitation or computer the supply chain (Tarn et al., 2002). Rigorous use of
as a target (Varma, T.N. & Khan, D. A., 2013). According information technology in supply chain is also generating
to the 2012 Report to the Nations on Occupational Fraud chance of cyber crime as “computer-assisted” such
and Abuse, published by the Association of Certified as hacking, phishing and “computer-focused” as hate
Fraud Examiners (ACFE), $3.5 trillion worth of fraud crimes, telemarketing/internet fraud crimes. Widely
occurs every year. Organisations are spending money used terms for crime involving computers are computer
and time to detect, investigate, analyze and prevent it. crime, computer related crime, computer misuse, cyber
Investigators and detecting agencies are forced to wade crime, digital crime, e-crime, internet crime, online crime
through massive amounts of data, which potential perpe- etc. Therefore IT is considered a critical prerequisite for
trators count on to shield them from detection and pros- managing supply chain (Davenport & Brooks, 2004).The
ecution. The objective of this paper is to identify the dif- critical role of IT in SCM is also curbing e-risks.
ferent IT tools. Further, what are the role and applications
of Information Technology to manage and curb e-risks in
supply chain networks?
Electronic Records Management

Paperless business transactions through Enterprises

In�or��tion T�c�no�o�� in Su���� Resource Planning (ERP) Systems, Automatic
C��in M�n�����nt Identification (Auto ID) and Electronic Data
Interchange (EDI) are collectively known as Electronic
Supply Chain Management (SCM) is the management Records Management (ERM). The objective of ERM
of a network of interconnected businesses involved in implementation in SCM is to ensure the accountability of
the ultimate provision of product and service packages process flow, which is fruitful to reduce cybercrime risks
required by end customers (Harland, 1996). The sharing (e-risks) generate during the e-communication.
of information among supply chain networks allows the
supply chain drivers to work together with the goal of Bar code and Scanner
integrated and coordinated supply chains for effective
supply chain management. Information also enhances Bar codes consists of ladder orientation (width lines in a
the performance and reduces the risks of supply chains horizontal order) or picket fence orientation (width lines
because it provides processes executed transactions and in a vertical order), where data is stored in magnetic or
it creates opportunity for decision makers when they optical form as a part of communication system. The

Electronic copy available at: https://ssrn.com/abstract=2921128

 Information Technology in Supply Chain Management 37
organisations are using it in supply chain networks to collect the data transmitted by the tags and forward
automate tracings and tracking products and services at them into the company’s information system for further
each process flow. It also provides necessary accurate evaluation and analysis. RFID and bar code are based
and timeliness of information which is useful to reduce on Auto ID technology but in bar code, the reading
errors (Ellram et al., 1999) because it is the representation device scans a printed label with optical laser or imaging
of a number or code in a form suitable for reading by technology and in RFID the reading device scans a tag
machines. Bullwhip effect, which is commonly being by using radio frequency signals. By adopting RFID
experienced by the consumer goods industries which lead technology, supply chain can be enhanced by visibility
to tremendous inefficiencies such as excessive inventory into customer needs, efficient business process, reliable
investment, poor customer service, lost revenues, and accurate order forecasts, productivity improvement,
misguided capacity plans, ineffective transportation, operating cost reduction, better tracking, counterfeit
and missed production schedules, where bar codes and identification, and theft predication (Attaran, 2007), RFID
scanners have been developed and applied in the portions include authentication (Coronado et al., 2004), reducing
of supply chain to remove inaccuracy. A significant result channel volume and enhancing forecasting and planning
was achieved by Wal-Mart to introduce this technology capabilities (D’Avanzo et al., 2004). Amcor uses RFID
in their sales and distribution data in year 1983 and later for managing the warehouses (Michael et al., 2005), Wal-
in 1987 by implementing satellite communication for real Mart began setting deadlines for suppliers to start using
time inventory data. FedEx enables this to provide their RFID tags on their shipments in 2003 (Coronado et al.,
customers with detailed tracking information in real time. 2004).Suppliers are able to manage product recalls and
This is commonly used in product identification, speeds return of faulty and defective materials by using RFID
data entry, enhances data accuracy, minimizes on-hand through its Electronic Security Marker (ESM) (Sabbaghi
inventory, improves customer service, reduces product et al., 2008), Adoption by Indian Retailers (Chandan
recall, verifies orders at receiving and shipping, reduces et al., 2009), RFID is an emerging technology that is
work-in-process idle time, monitors and controls shop being increasingly used in logistics and supply chain
floor activity, improves shop floor scheduling, optimises management in recent years (Jedermann et al., 2009).
floor space, improves product yield/reduces scrap, The RFID tags play a significant role, as the latest form
attendance recording, ATM card, debit and credit cards of artificial security tags, which can easily be integrated
in banking organisations. Bar code helps us to reduce risk with existing chains. RFID helps the organisation to
in supply chain which is rising due to manual oversight avoid duplication of items, as the tags are unique and
or fraudulent data entry by insider. Bar codes duplicity authenticated. It can also reduce the chances of fraud
in process generatese-risks, which can be eliminated by generated by manipulation in entry, authorisation from
application of biometric authenticity and authorisations. the supplier to customer. Cost and implementation
But there is a risk of data diddling which is performed constraints secure RFID tags and smart cards require
by unauthorised modifications to data prior or adding specialised cryptographic implementations.
fraudulent data during input or altering/omitting the
desired input data or wrongly posting a transaction, Electronic Data Interchange (EDI)
making alterations or additions in the master file
records, posting the transactions partially, destroying Electronic Data Interchange (EDI) is the computer to
the output and substituting the counterfeit output computer interchange of business documents and/or
or entry of a virus that changes data, the program, the information in standard, structured, machine retrievable
database or application, exchanging valid disks and data format (computer can process the information without
tapes with modified replacements into a computer or human assistance) (Sanchez & Perez, 2003) between
computer system by anyone associated with the process trading partners and commonly referring specifically to
of creating, recording, encoding, examining, checking, the application of EDI communication standards such as
converting, and transporting data into a computer. the EDIFACT and the ANSI X.12. It was the replacement
of the traditional forms of mail, courier, or fax. It was
Radio Frequency Identification (RFID) used for the paperless communication within supply chain
network to share transactional data (Garcia-Dastuge &
Radio Frequency Identification (RFID) is a technology Lambert, 2007), order processing, inventory controlling,
which is based on the use of tags that emit and receive accounting, transportation, quick access to information,
the identity in the form unique serial number of an object better customer service, increased productivity, improved
through wireless using radio signals and on readers that tracing and expediting, cost efficiency, competitive
 38 Journal of Supply Chain Management Systems Volume 3 Issue 3 July 2014

advantage, and improved invoicing within in bound  1970’s Closed Loop MRP
and out bound supply chain. EDI is also tremendously
beneficial in counteracting the Bullwhip effect and supply In the changing conditions of manufacturing environment,
chain organisations can overcome the distortions and the priority planning and capacity planning were tied in
exaggerations in supply and demand information byusing with MRP to accommodate the variations in demand and
technology to facilitate real-time sharing of actual demand supply using feedback from tactical plans and execution
and supply information. levels. This closed structure is called as closed loop MRP.
 1980’s Manufacturing Resource Planning (MRP II)
Enterprise Resource Planning (ERP) Systems(e.g.,
Manufacturing Resource Planning (MRP-II) is a
SAP,Oracle, PeopleSoft )
production planning system that converts a Master
Production Plans (MPS) into planned order releases. In
Enterprise Resource Planning (ERP) is organisational MRP, the MPS is treated as input information but in MRP
planning systems, which works around core activities II, the MPS would be considered a part of the system and
of business and has all logical interfaces to achieve it would be considered as a decision variable.
seamless flow of information through the entity within
the supply chain context, often interfaced to external  New generation ERP
systems. It is “not a system, but a framework that includes
In the new generation ERP, the whole supply chain
administrative (finance, accounting), human resources
management concept is incorporated extending the
(payroll, benefits), and Manufacturing Resources
planning concept to trading partners where the complete
Planning (MRP) (procurement, production planning)
visibility throughout the enterprise is possible and the
and it is a common term for a co-operating software
concept of virtual enterprise is supported using electronic
that manages and co-ordinates much of a company’s
commerce. It will have implications in terms of Just in
resources, assets and activities (Boyle, 2004), ERP
Time (JIT), Business Process Reengineering (BPR),
system is an enterprise information system designed
changes in organisational structure, people, and change
to integrate and optimise the business processes and
management.
transactions in a corporation (Moon, 2007). ERP systems
help the organisations for automating and integrating The security issue within ERP is a challenge for each
their Supply Chain Management and business. Basically, organisation. The IBM suggests the different controls
they allow data capture without manual interference for within ERP for any organisation as shown in Fig. 1.
the whole business into a single software package from
raw material to customers with all information flow.
Some of the benefits ERP systems could bring include Fig. 1: Source IBM Global Business Services
cost-cutting in internal operations, efficiency across the
extended supply chain, enhanced customer service, and
network relationships (Davenport & Brooks, 2004). The
development and pervasive use of ERP systems provides
the critical infrastructure necessary for the effective
evolution of the assurance function from a periodic
event to an ongoing process through the integration of
continuous auditing applications (Kuhn et al.,2010).
The evolution of ERP took over with the continuous
improvement for integration and planning with creative
thinking. The milestones of ERP are :
 1960’s Material Requirement Planning (MRP)
SAP, Oracle, Baan, and People Soft are the market player
The Material Requirement Planning (MRP) is a
in ERP systems package with high level of integration
computerised production and inventory control systems
by utilising a single data model, developing a common
which inputs are bills of material (BOM), item master,
understanding of what the shared data represents and
requirement, order and output are master production
establishing a set of rules for accessing data. These
schedules (MPS). It plays a major role in manufacturing
ERP packages are playing a vital role in organisation to
organisations. It is the heart of MRPII (Manufacturing
reducing the fraud or e-risks from their supply chains.
Resource Planning).
 Information Technology in Supply Chain Management 39
SAP organisations to allow them to buy, sell and move
products, services and cash by using Internet-based
SAP is the biggest ERP provider with its product R/3 applications to transact and exchange information with
which was founded in 1972 by five former IBM systems their downstream or upstream. American-On-Line and
engineers. The company has 17500 client organisations lastminute.com have achieved innovative results using
through 120 countries. Organisations are using SAP ESCs (Gunasekaran et al., 2004). In this collaborative
solutions for purchase-to-pay, order-to-cash, or HR Planning, Forecasting and Replenishment (CPFR), Vendor
processes and using third-party tools for fraud detection or Managed Inventory (VMI), Efficient Customer Response
using proprietary relational databases. In either case, the (ECR) and Quick Response have been easily managed.
need to export data out of the SAP system compromises Intel began to recognise the power of the Internet as a
both data security and governance which limit the amount corporate communication channel by using the internet
of data that can be analyzed. SAP announced SAP Fraud as “brochureware”, to share technical information and
Management in year 2013 with HANA platform, which market the Pentium processors (Sammon et al., 2007).
is part of SAP’s Governance, Risk and Compliance
(GRC) product portfolio, along with Process Control, Fig. 2: Evolution of E-Supply Chain
Access Control, Risk Management and Global Trade
Management, Business Objects and Business Intelligence.
These solutions give us to enhanced real-time fraud
analysis. SAP HANA detects, investigates, analyzes,
and prevents irregularities or fraud in even ultra-high-
volume environments,similar to Oracle and Baan having
similar features. Some applications of SAP are to detect Electronic Commerce (e-Commerce)
and prevent fraud which occurred in e-environment
such as False Vendor Payment,which is created due Electronic Commerce (e-commerce) means tools and
to lack of segregation of duties, where vendor creation techniques to manage business in a paperless environment.
ormodification in bank account number in vendor master, E-commerce includes electronic data interchange (EDI),
Goods receipt notes/ Service Entry Sheet and invoice email, electronic founds transfers, electronic publishing,
creation and approval are performed by the same user. It image processing, electronic bulletin boards, shared
can be easily detected and prevented by defining proper databases, and magnetic/optical data capture (such as
segregation of duties logic. bar coding), the Internet, and websites in form of B2B
(Business to Business) as Covisint, B2C (Business
Distribution Requirement Planning (DRP) to Customer) as Amazon.com, Wal-mart.com, C2B
(Customer to Business) as priceline.com, C2C (Customer
Distribution Requirement Planning (DRP) is a management to Customer) as e-Bay auction, P2P (Peer to Peer) and
process that provides a linkage between warehouse Mobile, or m-Commerce. In 1995, Intel formed the Internet
operations (store, distribution center, or warehouse that Marketing and E-Commerce Group (IM&E) to centralise
carries product for sale) and transportation requirement online marketing efforts. In year 2013, Filpkart became
that ensures that supply sources (third party supplier, a worth net Rs. 1200 crores in single largest funding for
regional distribution point, or a factory) which be able an e-commerce company in India. Hence it plays a major
to meet the demand. DRP applies the time-phased logic role for integrated supply chain management (SCM) and
to replenish inventories in multiechelon warehousing changing the dynamics of business in form of following:
systems. DRP-II extends DRP to include the planning of
key resources in a distribution system – warehouse spaces, e- Procurement
manpower levels, transport capacity and financial flows.
An e-procurement is expected to be integrated into the
wider purchase-to-pay (P2P) value chain with the trend
Electronic Supply Chains toward computerised supply chain management. An
e-procurement is done with a software application that
Electronic Supply Chain (ESC) is a supply chain that is includes features for supplier management and complex
electronically managed in form of EDI-based or Internet- auctions with value chain consisting Indent Management,
based between or among participating organisations. e-Tendering, e-Auctioning, Vendor Management,
Basically it is a Virtual Supply Chain, which links
 40 Journal of Supply Chain Management Systems Volume 3 Issue 3 July 2014

Catalogue Management, and Contract Management. The DSL or fiber optics and then made available to wireless
forms of e-procurement are web-based ERP (Enterprise devices via a wireless access point.
Resource Planning): creating and approving purchasing
requisitions, placing purchase orders and receiving Smart Cards
goods and services by using a software system based
on Internet technology; e-MRO (Maintenance, Repair A smart card can generally be defined as a plastic card
and Overhaul): the same as web-based ERP except that with dimensions similar to traditional credit/debit cards,
the goods and services ordered are non-product related into which an electronic device has been incorporated
MRO supplies; e-sourcing: identifying new suppliers to allow information storage. Frequently, it also has an
for a specific category of purchasing requirements using integrated circuit with data processing capacity.
Internet technology; e-tendering: sending requests for
information and prices to suppliers and receiving the Digital Signature
responses of suppliers using Internet technology; e-reverse
auctioning: using Internet technology to buy goods and
The Information Technology Act, 2000 provides for
services from a number of known or unknown suppliers;
use of Digital Signatures on the documents submitted
and e-informing: gathering and distributing purchasing
in electronic form in order to ensure the security and
information both from and to internal and external parties
authenticity of the documents filed electronically. This is
using Internet technology. In 1998, Intel launched a global
the only secure and authentic way that a document can be
online ordering system that reached a record US$1bn in
submitted electronically.
product orders in the first month of operation. Today, Intel
generates over 85 percent of revenue from online orders
Secure Electronic Transaction/Trading/Technology
and virtually all Intel customers are transacting business
with Intel over the Internet. Intel is aggressively moving (SET)
towards paperless purchase orders, shipment notification
and deployment processes. It is a proposed industry standard for payment card
acceptance over the Internet. At the system heart is a pair
e-Auctions of digital keys, one public and one private, held by each
party to a transaction. In practice, banks will giveboth
The electronic auction (e-Auction) is carried out in real keys to a customer together with a digital certificate for
time, where participants log in to an auction site using authenticity. When customers wish to purchase over the
a browser at a specified time and bid for an article as Internet, they firstly give the public key to the merchant
conventional auctions. This is a transparent process and along with the certificate to prove its authenticity.
reduces the malpractices. Likewise, the merchant provides its own public key
and certificates to prove its own bona fides to allow
the transaction to proceed. Problems may arise in key
e-tailing
distribution and customer identification in order to ensure
that accounts and clients match.
An e-tailing is a use of the Internet for selling goods over
the Internet. The Amazon Company is renowned for the
fact that it only sells books over the Internet and doesn’t XML (Extensible Markup Language)
even take telephone orders.
Structured information contains words, pictures, etc.
Wireless Internet which play an important role in Supply Chain Networks
data flow and a markup language is a mechanism for
Wireless Internet enables wireless connectivity to the identifying structures in a document. XML (extensible
Internet via radio waves rather than wires on a person’s markup language) specification defines a standard way of
home computer, laptop, smartphone, or similar mobile adding markup to documents and data so that content can
device. Wireless Internet can be accessed directly through be processed with relatively little human intervention and
service providers. Wi-Fi hotspots and wireless LANs are exchanged across diverse hardware, operating systems,
also options for wireless Internet connectivity. In these and applications which are so richly structured documents
cases, Internet connectivity is typically delivered to a could be used over the Internet. XML can be exchanged
network hub via a wired connection like satellite, cable, across platforms, languages, and applications and can
 Information Technology in Supply Chain Management 41
be used with a wide range of development tools and volatile, time variant, accessible and process oriented.
utilities The number of applications which are based on Data mining combines data analysis techniques such
XML documents are large and e-business transactions are as statistical analysis and modeling to uncover hidden
only one application area (Ameron,2000), XML-based patterns and subtle relationships in data and to infer rules
solutions provide a significant alternative to traditional that allow for the prediction of future results. Data mining
EDI and lower the entry barrier to e-business because of helps the organisations in defining business rules (alerts
the lower investment costs compared to EDI (Nurmilaakso based on intuition and general experience), anomaly
et al., 2002), a cost-effective method of information detection (alerts are defined based on events that represent
exchange from system to system between organisations statistical deviation from normal or expected behaviour),
(Simchi-Levi et al., 2003). predictive models (statistical models which derived from
event characteristics that are indicators of prior fraud
incidents) and social network analysis (alerts are based
Spread Sheet (Microsoft Excel) on the level of association between the current event and
individuals or accounts that are known or suspected of
Organisations are using Microsoft Excel as standard fraudulent behaviour).
desktop software and decision making tools in their
supply chains, because in comparison to the total cost
of ownership with commercial software-based decision Intranet/Extranet
making supporting tool, it is less. It is also useful to apply
in Supply Chain Networks (SCN), because it has many The computer networks inside an organisation are often
build-in capabilities to perform and execute quantitative connected via Internet based protocols (HTML:HTTP,
modeling techniques. Microsoft Excel is an ever-present FTP, Mail: SMTP, POP3) and are not accessible from
tool and easily use for data analysis because spreadsheets outside. By using Web browsers and server software
are easy to navigate and flexible enough. Excel allows with their own internal systems, organisations can
users for applying analytical test (horizontal and improve internal information systems and link otherwise
vertical analysis, ratios and trend analysis,performance incompatible groups of computers within supply chain
measures,statistics, stratifications, aging,application of networks for reducing manual intervention. Extranet
Benford’s Law, regression, Monte Carlo simulation), provides secured access to its Intranet and to additional
data management/analysis (append/merge, calculated information and services that may not be part of its
field/functions, cross tabulate, duplicates, extract/filter, intranet and it is secured via a firewall. Internal networks
export,gap analysis, index/sort, join/ relate, sample, often start out as ways to link employees to company
summarize), user forms design, and macros/Visual Basic information, such as lists, product prices, or benefits.
Applications (VBA). The complexity of supply chains Because internal networks use the same language and
network data allows fraudsters to commit the fraud beyond seamlessly connect to the public Internet, they can easily
the scope of internal controls but an effective approach of be extended to include customers and suppliers, forming a
locating fraudulent on a data-set of supply chain network supply chain “Extranet” at far less cost than a proprietary
can be performed by using Benford distribution with network.
help of excel sheet (Varma, T.N. & Khan, D.A., 2012).
Hence, Microsoft Excel has become an industry standard
in managing and analyzing organisational data of SCN for
Internet
performance improvement as well reducing the financial
fraud as bid rigging, phantom bids, nepotism, substitution, Good supply chain management is essential for a
false count,counterfeiting, detecting fictitious accounting successful company. Supply chain management can
entities e.g., ghost employee, fake vendor, fake customer reach beyond the boundaries of a single organisation to
or vendor payments, falsified hours etc. share that information between suppliers, manufacturers,
distributors, and retailers. This is where the Internet plays
a central role. In terms of advancement in technology and
Data Warehouse and Data Mining communications capabilities, perhaps the most influential
development over the past decade has been the adaptation
Data Warehouse (DW), which provides a combination of ofthe Internet applications into the areas of commerce
many different databases across an entire enterprise, aids and mass communications and it provides instant and
management in the decision-making process with specific global access to an amazing number of organisations,
characteristic as subject-oriented, integrated, non- individuals, and information sources. A key Internet
 42 Journal of Supply Chain Management Systems Volume 3 Issue 3 July 2014

concern is the issue of privacy regarding the sensitive government and government-to-business activities, and
information, the level of security for information because supported by (3) the e-business technology infrastructure
supply chains members struggle with the challenge of i.e. network infrastructure, network applications, and
freely sharing the information. The Internet is a source respective software tools and applications. The key tools
for cyber criminals. Internet security was ranked the first and methods of e-business include EDI (electronic data
concern for customers and supply chain members. interchange) and XML (extensible markup language),
buy-side e-business applications, sell-side e-business
applications, digital market places, Item identification and
World Wide Web Content management (Bauer et al., 2001). If e-business
is not properly secured then illegal data acquisition is
The World Wide Web (WWW) is the Internet system for performed by cyber criminals. There is law for copyright
hypertext linking of multimedia documents, allowing protection or Protection from Data or Intellectual Property
users to move from one Internet site to another and to Theft in every country.
inspect the information available without having to use
complicated commands and protocols. The number of
websites relevant to supply chain management is growing Software Agents
at a rapid pace. Enterprise Transportation management
was recently launched by Metasys Inc. through the Oracle A software agent is a software system, which has attributes
Web Applications Server; this system deploys a variety of of intelligence, autonomy, adaptability, perception or
critical information about transportation and distribution acting on behalf of a user proactively. The intelligence of
applications throughout the supply chain. an agent refers to its ability of performing tasks or actions
using relevant information gathered as buyer agents or
shopping bots (retrieving information about goods and
Decision Support Systems services from networks), monitoring and surveillance
agents (used to observe and report on equipment, usually
Supply chain management involves several decisions computer systems), user agents or personal agents
like demand planning, logistics network design, sales and data mining agents (finding trends and patterns
and marketing region assignment, distribution resource from information gather from many different sources).
planning, material requirements planning, inventory Software agents provide security to the information. Since
management, production scheduling, workforce e-commerce deals with business online, security plays the
scheduling. The decision support systems (DSS) are heart of business. Business needs lots of communication
computerised support to complex non-routine and skills which are provided by software agents. Software
partially structured decisions of the supply chain activities agents are responsible for customer satisfaction in terms of
of any organisation. DSS assist decision makers in terms B2B e-commerce. Software agents can be thus proved as
of both the design and operation of integrated supply an important entity with respect to e-Commerce. Without
chains. These DSS will help decision-makers identify software agents e-commerce is like “a man having his leg
opportunities for improvements across the supply chain cut” (Ramya S. Gowda, 2013).
as well as detecting and preventing fraudulent activities.

Web Services
E-business
Web service is a software system designed to support
E-business is defined as“the use of the Internet or any interoperable machine-to-machine interaction over a
digitally enabled inter- or intra-organisational information network. It has an interface described in a machine-
technology to accomplish business processes” (Boone et process able format (specifically WSDL). Other systems
al., 2007). As classified by Geoffrion & Krishnan (2001), interact with the Web service in a manner prescribed by
e-business consists of three areas: (1) consumer oriented its description using SOAP messages, typically conveyed
activity i.e. business-to-consumer,consumer-to-consumer, using HTTP with an XML serialisation in conjunction
and government-to-consumer activities, (2) business- with other Web-related standards(W3C glossary).
oriented activity i.e. business-to-business, business-to-
 Information Technology in Supply Chain Management 43
Fig. 3: Web Services Architecture to another. The agent performs its job wherever and
whenever it is found appropriate and is not restricted to
be co-located with its client. Thus, there is an inherent
sense of autonomy in the mobility and execution of
the agent. It is applied in SCM as the delegate of tasks,
network load reducer, parallel processing facilitators,
code shipper rather than data shipper etc. As distributed
system, the mobile agent is subject to security threats
such as eavesdropping, corruption, masquerading and
denial of service, replaying, and repudiation. Issues such
as encryption, authorisation, authentication, and non-
repudiation, therefore, must be addressed in a mobile
The Universal Description, Discovery and Integration agent. Moreover, a secure mobile agent must protect both
(UDDI) protocol is one of the major building blocks the hosts and the agents from tampering by malicious
required for successful web services. As shown in Fig. activities.
3, there is one retailer, one logger, three warehouses, two
plants and one configurator, and thus a total of six web
services. UDDI creates a standard interoperable platform M2M
that enables companies and applications to quickly, easily,
and dynamically find and use web services over the internet Machine to Machine technology (M2M) allows both
(UDDI, 2004). UDDI also allows operational registries to wireless and wired systems to communicate with other
be maintained for different purposes in different contexts. devices of same ability. The modern M2M communication
UDDI is a cross industry effort driven by major platform has expanded beyond a one to one connection and changed
and software providers, as well as marketplace operators into system of network that transmit data to personnel
and e-business leaders. Hence it application is very useful appliances. M2M domains are system monitoring/
for supply chain management. telemetry, asset tracking, digital signature & advertising,
and telematics. There are many M2M applications
Groupware (e.g., Outlook, Lotus Notes) implemented in supply chain such as tracking supply
and demand and making informed decisions. Real time
= AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 monitoring of the process can implyusing sensor that
4E46 makes operations to detect, predict and ensure smooth
process. As the concept of Internet of Things, M2M will
Lotus Notes has been one of the first complete groupware solidify in future, there will be requirement of optimised
products to hit the market way in 1989, and ever since the high performance message handling component
it has continued to dominate the Groupware market. within the messaging network which be able to handle the
Developers of Notes realised the importance of security connectivity between millions of devices and applications
quite early, and therefore we seemany Industry Standard communicating with each others.
Security Features built into Notes over and above security
features unique to Notes. Together, they effectively cover Di�cu��ion
many aspects of security that are of significant importance
today. Even after there is chance of e-mail bomb attack on The use of information technology (IT) is considered
supply chain network in a form of net abuse consisting a prerequisite for the effective control of today’s
of sending huge volumes of e-mail(sending numerous complex supply chains. The exponential growth
duplicate mails to the same email address) to an address Information Technology in supply chain networks has
in an attempt to overflow the mailbox or overwhelm the significantly changed the paper-based communication
server where the email address is hosted in a denial-of- to e-communication, which is a serious threat of cyber
service attack. crime (e-risk)by unauthorised or illegal access by means
of physical or/ and virtual intrusion to a computer or
Mobile Agent computer system or computer network. Criminals may
commit illegal access of confidential data, theft of data,
A mobile agent is a software process, which can move manipulation in data, and denial of access of system
autonomously from one physical network location of supply chain networks. They may also perform
 44 Journal of Supply Chain Management Systems Volume 3 Issue 3 July 2014

the fraudulent activities by help of IT in supply chain study appears to have modest role in decision making as
networks and it can be curb through help of IT. Barcodes well as reducing e-risks by supply chain management.
are both cost effective and time saver which eliminate The evolution of high performance and cloud computing
the human error, reduce the paper works to improve the systems have started appearing in the domain of SCM
customer service, the usage of this limited to supply chain and helping to provide transparency and visibility in
partners. Improved data integrity allows decisions to be supply chains. This upcoming technology is predicted to
made with real time, accurate data, improving product revolutionary changes in field of performance and e-risks
and category management decisions. Bar code technology prevention of SCM. Similarly next generation Internet
facilitates the use of automated replenishment or vendor connects heterogeneous computing devices to create
managed inventory so the right product is always at the network traffic that is generated by automated objects
right store at the right time. Recently organisations, from from public sectors to day to day life of people rather than
both government and corporate sectors had mandate human intervention. The IT systems with service oriented
to implement radio frequency identification (RFID) architecture and web service standards, expected to come
technology for their suppliers. The global standard in future, may facilitate better supply chain management.
for RFID such as the Electronic Product Code (EPC)
and offer insight into the coexistence of barcodes and Conc�u�ion
RFID increased their importance to curb the e-risks.
Asymmetric cryptography with secure bit length still Due to globalisation, outsourcing, customisation, time to
requires significantly larger chips in RFID than symmetric market and pricing pressure have compelled enterprises
cryptography. EDI is the growing business technology of to adopt efficient and effective supply chain management.
the 1990s. The major risks to EDI messages are loss of To survive, organisations will find that their conventional
integrity (that is, alteration, modification, or destruction), supply chain integration will have to be expanded beyond
loss of confidentiality (that is, copied, seen, or heard their boundaries so as to integrate all stakeholders.
by unauthorised persons) and non-availability (that is, Adoption of Information Technology tools is vital for
not accessible when needed).The claims are made by such efforts. This paper discusses the role of IT as an
ERP software vendors that their software solutions are enabler in Supply Chain Management with vast benefits
complete and designed to be industry specific. In practice, to organisations with a comprehensive IT implementation
these packages do not support many business processes as well as curbing e-risks. Technology is always a double-
and frequent up gradation required. Consequently, edged sword. Society that is dependent more and more on
many organisations are forced to leave some processes technology, cyber crimes are bound to increase because
unautomated and a few legacy systems in place. The bytes are replacing bullets in the crime world. There
organisations are worried that the implemented package will always be new and unexpected challenges to stay
will work in the future or not. However, ERP as SAP ahead of cyber criminals and cyber terrorists but we can
implemented integration of different business modules win only through partnership and collaboration of both
with business data ware and intelligences. Its new tool individuals and government. Cyber crime in India has
SAP HANA is very useful to stop fraudulent activities in gone by 60% in 2012 in compare of 2011. History is the
even ultra-high-volume environments. The Internet not witness that no legislation and technology has succeeded
only provides communication in virtual environment, in totally eliminating crime. Securing Physical and virtual
but also enables the opportunity of online business with systems which is sabotage on computer systems and their
mutual benefits of customer and suppliers of supply access to information and databases by cyber criminal
chain networks globally. The online supply chain has always been one of the critical risks for the supply
management creates the e-risks as hacking, spreading chain management. Criminals may involve deliberated
or dissemination of malicious software (Malware), theft deceit or misrepresentation of facts or significant
of internet hours/identity theft, cyber squatting (an act information to obtained illegal gain from Supply Chain
of obtaining fraudulent registration with an intent to sell Networks. Information Technology be used as tool
the domain name to the lawful owner of the name at a against bid rigging, phantom bids, nepotism, substitution,
premium), privacy violation, cyber terror, etc. Microsoft false count, counterfeiting, creating fictitious accounting
Excel has many powerful features and by using this for entities e.g., ghost employee, fake vendor, fake customer
Supply Chain Management can easily detect and prevent or vendor payments, falsified hours etc. The alignments of
fraudulent activity with some limitation of excel sheet IT technology in SCM, viz. implementation of Electronic
that it can process only one million rows or records of Record Management (Bar Code, RFID,EDI), ERP system
data. Implementation of IT in SCM as discussed in the (SAP, Oracle, PeopleSoft), Microsoft package, Data
 Information Technology in Supply Chain Management 45
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