Transportation logistics is an integral part of a company’s supply chain. Supply chain activities include sourcing, production and logistics as well as the information system required to coordinate supply chain activities. The Internet is an integral part of the information system needed to coordinate activities.
Identification
The effect the Internet has on the supply chain and transportation logistics falls under the umbrella of supply chain management (SCM). Supply chain management is best defined as the application of information technology resources to maximize customer value. This value comes in the form of cost savings and product delivery value and efficiencies.
Background
For years, companies only paid attention to the supply or logistics activities that happened within their facility. However, because of increasing competition and the need to create new efficiencies, companies pay attention to the entire supply chain which includes their suppliers, partners, transportation hubs and distribution hubs and look for ways to create new efficiencies. Supply chain management is the discipline of maximizing the use of information technology systems and resources to accomplish these objectives.
Effects
An Internet-enabled supply chain reduces administrative overhead, unnecessary inventory, decreases the number of processes or steps required to move inventory through the system, eliminates outdated business processes and speeds up production and responsiveness to customers. These efficiencies increase the bottom line.
