Information is crucial to the performance of a supply chain because it provides the facts that supply chain managers use to make decision. without information, a manager will not know what customers want, how much inventory is in stock and when more products should be produced and shipped. in short, without information, a manager can only make decisions blindly.
Supply chain managers use information to make many important decisions relating to each of the supply chain drivers. setting inventory levels requires downstream information from customers on demand, upstream information from suppliers on availability, and information on current inventory levels, costs, and margins, determining transportation polices requires information on customers, suppliers, routes, costs, times, and quantities, to be shipped. facility decisions require information on demand and suppliers, as well as information on capacities, revenues, and costs within the company.
Managers must understand how information is gathered and analyzed. this is where information technology comes into play . information technology consists of the hardware and software used throughout a supply chain to gather and analyzed information. IT serves as the eyes and ears of management in a supply chain, capturing and delivering the information necessary to make a good decision. for instance, an IT system at a personal computer manufacturer many tell a manager how many Pentium IV chips are in stock to put into newly made PCs. IT is also used to analyzed the information and recommend an action. in this role, a manager at a PC manufacturer can take the number of chips inventory, look at demand forecast, and determine whether to order more chip from Intel.