Impact of Information Technology on the Supply Function of an Organization

CHAPTER I: Introduction

1.1            Background of the Study

It has been part of our history that goods produced are not usually consumed by those that produced them or where they are produced. They need to be moved and moved to the location they are needed. These goods passed through a long chain and are usually handled by many people, with each contributing to adding value to the product, from point of extraction to the transformation, and eventually consumption. This extraction – transformation – consumption stage is what is referred to as supply function.

History has also told us that at a point those activities were undertaken crudely and primitively. No easy access to information. In the organization, sometimes information are passed wrongly between buyer and the supplier on what is to be supplied, where it should be supplied and the time to supply it. But as time goes on man develop methods, technique and technology that allow man make this activity easier and more efficient, which is information technology.

Information technology is considered as a pre-requisite for effective control of today’s complex function, indeed a recent study conducted by Forrester Research indicate that US manufacturers are increasingly dependent on benefits brought by information technology to improve supply function agility, reduce cycle time, achieve higher efficiency and deliver products to customer in a timely manner. The implementation of information technology in supply function has also enable firm organization to develop and accumulate knowledge about stores, about its customers, supplier and market demands, which in turn influence performance.

1.2            Statement of the Problem

Before the introduction of information technology to supply function, the keeping of records (information) manually often resulted in keeping copies of the same document in different places. information is not easily accessible relating to supply function and sometimes information don’t get to the buyer and supplier on time on what is to be supplied and this will tied down activities and it will also affect the organization.

Keeping of stock record is manually done which is time consuming, not cost effective, even the calculation of stock level is very, very difficult and at times it causes delay in the delivery of materials. Not only that before the advent of the use of information technology in supply function stock checking and stock taking becomes very difficult which at times lead to discovery of huge number of items. Either going bad or becoming obsolete. Even the location of material and identification becomes very difficult because identifying and location of materials could be time consuming and this could lead to bottleneck.

It is with this in mind that researchers will attempt to see how the application of information technology can impact on supply function of Peugeot Automobile of Nigeria (PAN).

1.3            Objectives of the Study

i.                   To identify the impact of information technology on supply function

ii.                 To identify the condition under which enterprise resource planning (ERP) can be a critical enabler or severe handicap for superior chain performance.

iii.              To identify the basic concept involving in the analysis, design and operation of information system in relation to supply function

iv.              To identify the innovative approaches that had been recently developed in relation to supply function.

v.                 To determine whether the process is reliable enough in ensuring efficiency and effectiveness in increasing organizational performance.

1.4            Significance of the Study

The significance of this study is to know the impact of information technology in an organization by creating and developing sound management information system to meet organizational goals and objectives.

The effective use of information technology offers manager several significant advantages because it is the ability to process large volume of data rapidly. Computer can do much routine clerical works; thus, freeing departmental personnel from many mistakes and repetitive tasks.

Information technology offers supply functions executives immediate availability of more complete data and information for use when making purchasing and related materials decisions, because of its fantastic speed. It can also supply management with virtually instant report which might otherwise take an army of clerks month to prepare or update, this will enable the supplier to manage by exemption and do more effective and economical good job and managing the flow of materials throughout operation.

Another significance is to look into information technology method of supply function of Peugeot Automobile Nigeria Kaduna with the view of making students for automated system for obvious reasons.

The researcher provides valuable suggestion and advice on problem facing the store departments. This will help the organization to adopt a recommended stock control technique to improve service and profit level of the organization.

Further more the project is requirement in partial fulfillment for the award of a Higher National Diploma in Purchasing and Supply of Kaduna Polytechnic. The project work will help other students that will research on the topic.

1.5            Scope of the Study

The scope of this study covers the idea behind information. Peugeot Automobile Nigeria was chosen as a case study.

This study is conducted in Peugeot Automobile company Nigeria , located at Kakuri, Kaduna South local government.

The main focus of the study is the impact that information technology has on supply function of Peugeot Automobile of Nigeria. The information obtained will be used for purchasing department, stores and production department because the use of information technology will have a lot of impact on supply function of Peugeot Automobile Nigeria (PAN)

1.6            Research Question

                   i.                What impact does information technology has on supply in your organization?

                 ii.                Under what conditions can enterprise resource planning (ERP) enhance performance of supply function in the organization?

              iii.                 What are the basic concepts that are involved in the analyzing information system in relation to supply function in the organization?

              iv.                What are the innovation approaches that are currently adopted to develop in relation to supply function in the organization?

                 v.                Is the process reliable enough to ensure efficiency and effectiveness in increasing organizational performance?

1.7     Definition of Terms

Information: information is any thing that adds to our knowledge either consciously or unconsciously positively or negatively.

Information technology: Any computer-based tool that people use to work with information and support the information and information – processing needs of an organization

System: A system is a whole with parts working together to achieve a goal.

Management: this is the planning and control of the use of a of resource to achieve more objectives

Management information system (MIS); is the function that plans for, develops, implement and maintains IT hardware, software and applications that people use to support the goals of an organization.

Procurement; is a managerial process, aimed at ensuring continuous flow of materials, projects and services into and within the organisation in order to meet with its goals and objectives, profitably and efficiently in an ever-changing business environment.

e-Procurement: A simple and fast means of business transaction that requires telephone lines and other communication equipments.

Supply: Flow of materials within the firm, i.e. the stores function covering such issues as consumption of raw materials, office items and other MRO items

Supply chain management (SCM); is the process of planning implementing, and controlling the operation of the supply chain with the purpose to satisfy customer requirements is efficiently as possible.