Apply Chain Management vs Traditional Mananagement Systens Essay

A. Approach The use of information technology by firms that want to gain competitive advantage has increased dramatically in the last twenty years. Large and small firms have been utilizing information systems to connect their internal business functions and the company’s activities to stakeholder such as suppliers and customers. (FORMAN WEB 13). Supply chain management and customer relationship management are some of the many systems used by firms to accomplish the aforementioned functions. Before comparing Supply Chain Management and customer relationship management systems to Tradition Systems, a brief description of Supply chain management and the activities it involves is fully warranted. This brief easy attempts to compare and contract SCM and CRM systems to traditional management systems in terms of approaches , efficiency, cost saving, and firm profitability. Jiambalvo (2010) describes supply chain management as,† the organization of activities between a company and its suppliers in an effort to provide for the profitable development, production, and delivery of goods to customers.† (P, 15). Sunil & Peter further describe ( ) supply chain as, â€Å"consisting of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain includes not only the manufacturer and suppliers, but also transporters, warehouses, retailers, and even customers themselves. Within each organization, such as a manufacturer, the supply chain includes all functions involved in receiving and filling a customer request. These functions include, but are not limited to new product development, marketing and operations, distribution and finance, and customer service.†(P... ...in saving costs for firms that effectively implement the systems. Alan and et al.(2009) state that, â€Å" full-scale implementations lead to system-wide inventory optimization, which in turn leads to cost improvement associated with inventory balances and turns.†(See Page 21 for note). Mikko & et al (2002) conducted a study of the cost reduction benefits of SCM and found that,† the sharing of demand information in supply chains typically increases the performance of the supply chain by increasing availability and reducing inventory related costs.† That other major distinctions between the two systems and traditional management systems is that the former need a small amount of date input and out put to perform sophisticated and complex functional, while the later takes and produces data in a large amount. A. profitability