Using the Geographic Information Systems in the Supply Chain Management

Order Here for A Customized Paper

The need to manage the very many facilities in a supply chain requires the use of modern technology (Gunasekaran & Ngai, 2004). Over the years, businesses have incurred losses due to lack of proper supervision and management of product movement.  For example, the complexity of supervising the progress of materials from the suppliers to a business facility require integrated efforts.  Sometimes, companies incur heavy cost due to lack of route planning. There instances where companies lose materials to the transporters, pilferage, and theft. Mismanagement of information flow between a supply chain networks affects a business operations. The probability of dealing with unstable suppliers, as well as, difficulties in demand planning renders the use of GIS technology significant in solving problems of a supply chain. Without effective decision-making techniques, businesses fail to make a significant progress. The introduction of the GIS technology as a mapping tool for the supply chain management has revolutionized business practices.

The role of GIS

According to Dan Scollon of TEDx Talks, GIS technology is empowering businesses in identifying potential risks associated with lack of effective supply chain management. The technology is used or integrating information systems for easier visualization. In this context, an organization’s management accesses data from different sources with ease. The importance of such integration is to hasten decision-making processes.

The GIS incorporates Geographic Positioning Systems (GPS) technology in tracking the flow of materials, products, and information along the supply chain (TEDx Talks, 2013). In this regard, the GIS ensures that data is embedded in the system for strategic reasons. For example, a company tracks the materials or products by an advanced mapping software.  According to Monica Stephens, the significance of GIS in risk management is exemplary especially in situations where disasters are unprecedented (TEDx Talks, 2013). Besides natural disasters that disrupt the flow of materials, products, and information along the supply chain, there are factors other factors that hinder the same. For example, the geographical distance between a company and the suppliers may pose risks to transportation of products and materials. Lack of a proper communication system is a risk and is prone to distortion of information. In this context, the GIS technology helps in analyzing the nature and impact of a potential risk. Importantly, the GIS technology can apply GPS systems in analyzing risks based on locations. It is easier to plan for the movement of products and materials by avoiding risky routes and areas. Companies can avoid a risk impact by relocating functions like storage, transport, and manufacturing to secure regions with the help of GIS mapping tools.

The GIS technology can complement companies in real-time planning. The GIS system provides real-time data that is critical for making operational decisions. The GIS is essential in interpreting complex information presented by spreadsheets. For example, the use of Esri GIS in mapping locations that require emergency attention is vital in mitigating risks associated with the supply chain. The Esri GIS is integral for systems integration and leveraging of a companies’ operations for optimal efficiency. In order to conduct internal pattern analysis and achieve efficacy in materials, merchandise, and traffic management.

The challenge posed by the lack of critical data interpretation techniques is now solved by the GIS technology. The capacity to analyze and visualize data in a company’s industrial or market environment enhances efficiency in a supply chain. For example, data is visualized and converted into an understandable variable like gross margin, loss, profit, and cost.

Future challenges

The use of GIS technology as an essential factor in supply chain management will be subject to the cost-containment challenge (Butner, 2010). The objective of ensuring that cost do not hinder supply chain operations will be difficult to achieve because of continuous cost volatility. The uncertainty of inflation, credit freezes, and energy cost will be a hindrance to the effective application of GIS technology.

Visibility remains a contentious issue for supply chain management considering that information access to users is a complex matter (Butner, 2010). The need to improve visibility of complex information captured by data systems to external users is necessary. Apparently, the improved visibility of information to the supply chain stakeholders, renders it possible to make decisions without difficulties. In this context, the GIS system must contend with the increased demand for information visualization or visibility.

The continued exposure of the supply chain to risks attract different approach to solving the issue among the managers (Butner, 2010).  In this context, the GIS technology is overwhelmed by economic risks associated with managing a supply chain. The inability of the GIS system to monitor an overly exposed supply chain within minimal data is a critical issue that will render the technology inadequate in future years.

The scope of GIS in the supply chain will not allow companies to maintain close customer relationships (Butner, 2010). The challenge will be disastrous for companies that do not identify and address immediate customer needs. The GIS technology input will perceive customer service as a costly element in the supply chain. In future, ensuring that GIS technology is consistent with increased inventory for the sake of customers will remain a challenge.

The current globalization concept will be a challenge for the implementation of GIS technologies in supply chain management (Butner, 2010). Apparently, companies are opting for global outsourcing which may be difficult to manage from an integrated approach. The different methods used by foreign companies may affect the use of GIS technologies and other supply and purchasing practices. In future, companies will not detect poor quality and suppliers’ lack of capacity to deliver materials on time.

Addressing challenges

With the inception of GIS technologies as a driving factor for a successful supply chain, managers will use the system to achieve and cost flexibility (Stadler, 2005). The capacity of the GIS system to identify and analyze risks will enable companies avoid hefty losses associated with cost volatility. In order to improve data and information visibility, the integration of GIS technologies will encourage collaborations between companies, vendors, suppliers, customers, and distributors. The collaborative approach will entail joint planning, corporate social responsibility programs, and sharing of real-time data with significant supply chain units. The issue of risks will need standardization of company processes and improved data collection. The GIS technology will focus on monitoring disruptions in the supply chains. Companies will use GIS to establish programs that oversee operation controls and policy compliance among suppliers, managers, and distributors. Improved customer relations will require synchronized planning that involves sales, demand, and supply processes. Finally, the globalization challenge will require redesigning GIS technologies to address indifference of supplier practices, markets, and quality standards. Additional proficiency in terms of global cultures, leadership skills, and forecasting skills is a necessity for companies using GIS technologies.

 

References

Butner, K. (2010). The smarter supply chain of the future. Strategy & Leadership, 38(1), 22-31.

Gunasekaran, A., & Ngai, E. W. (2004). Information systems in supply chain integration and management. European Journal of Operational Research, 159(2), 269-295.

Stadtler, H. (2005). Supply chain management and advanced planning––basics, overview and challenges. European journal of operational research, 163(3), 575-588.

TEDs Talks. (2013). The frightening future of digital maps: Monica Stephens at TEDxEureka. https://www.youtube.com/watch?v=VhLrEAgeMs4

TEDx Talks. (2013). Geographic Information Systems (GIS): Dan Scollon at TEDxRedding. https://www.youtube.com/watch?v=9V_Mz7NDy3o