What is the Importance of the Information System in Logistics?
In definition Logistics is the overall process of managing how resources are acquired, stored, and transported to their final destination in any sort of situation. For businesses, logistics have always been a core part of the foundation they are built on. Therefore, it’s obvious that poor logistics in a business can impact its bottom line. Just as General Dwight. D. Eisenhower once said, “You won’t find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics”
Now that we have established how importance logistics is, it will be easier to understand the importance of information system in logistics. An information system contributes essentially to an organization’s competitive advantage. Therefore, it’s considered as key element of logistics in the chain of managing, organizing and operating in any organizations. A proper management of information technologies contribute to better development of logistics functions in an organization or institution as a whole. In fact, Statista shows that emerging tech will experience a growth rate of 104% between 2018 and 2023. Integrating Logistics and Information Systems results in better awareness on various aspects of logistics. LIS is designed to provides the necessary skills to manage the flow of materials and information within and between organisations and their business environment.
The importance of information system in logistics can be seen through the various benefits that it offers. Let us look at some of the benefits:
- Better understanding of customer service, establishing better customer service.
- Reduction in the use of documentation and paper work to store data.
- A strong base of communication throughout the logistic chain of system.
- Better synchronisation between the processes of supply, production, and distribution.
- Less order errors and better delivery schedules.
These are some of the many benefits of incorporating information system in logistics. There are endless roles information system can play under logistics which makes them increasingly essential for smooth function of whatever organization it is being used for. Some of the important roles of information systems under logistics are.
- It ensures the transformation of logistics functional operations into a process with the goal of pursuing customer satisfaction at the lowest cost. It facilitates planning and control of logistics activities related to order fulfilment.
- Information systems help in providing information on goods and tracks the delivery, by giving their status accordingly.
- Contributes to monitoring of the actual products, so it’s easier to know whether they will arrive on time and in proper condition at the delivery places, and to be able to take prompt action in case of any mishap.
- Through information system in logistics, in any case of delays or exigencies, transporters can report these to their customers who can consider the impact.
- Contributes to resource planning, hence, reducing the requirements of inventory and human resources
- Helps in facilitating ‘virtual’ inventory management or electronic inventory management by managing dispersed inventories through information technology.
Logistics and Information Systems results in better awareness on various aspects of logistics. Information system are designed to provides the necessary skills to manage the flow of materials and information within and between organisations and their business environment. It focuses on the use of information technology as a critical enabler of the supply chain networks that businesses use to acquire, produce, and deliver goods and services all over the world.