Technologies Used in SCM

SCM hinges on effective use of technology to increase productivity and cut costs, all while gathering important, relevant data on sales, consumer demand, prices, and costs. Popular technologies used include:
  • RFID: radio frequency identification
  • EDI: electronic data interchange (structured data transmission)
  • Cloud Computing
  • QR Codes
  • Supply Chain Management Software (SCMS)


RFID, which stands for Radio Frequency Identification, is a technology that is rapidly growing as supply chains become more and more complex. Especially useful for consumer goods companies, RFID tags are fast, simple, and inexpensive ways for firms to monitor the movement of product to different outlets.

EDI stands for Electronic Data Interchange. Many businesses today use this e-commerce technology globally to exchange information through the internet to other businesses such as for example invoices, packing lists, purchase orders and shipping documents electronically, which was once sent some time ago via fax machines. EDI helps reduce costs, errors and increase efficiency by streamlining information.

Cloud Computing
Cloud computing is an area of technological growth that has recently gained some momentum. Essentially, cloud computing means that data is stored in a massive database from which it is actively streamed to another computer. While none of the data contents is stored remotely on the computer, the computer still has access to the data through its Internet connection to the database. Amazon and Apple are two major corporations that use cloud computing to streamline distribution of content.

QR Codes
QR codes are a type of data display similar to a barcode, in that they are unreadable unless done so through a special type of scanner. Unlike barcodes, though, QR codes hold more information and can be used to transmit not only raw information such as a number code or object code, but text, phone numbers, website addresses, and even pictures. In the future, these could become a replacement for barcodes as companies seek to streamline checkout processes and gather more information on purchased products.

Supply Chain Management Software
(SCMS) integrates components such as the technologies listed above into a centralized system where managing and controlling the supply chain network is feasible. Items such as supplier sourcing, inventory management, purchase orders, shipment arranging and tracking as well as forecasting are included in the software to enable companies to plan better and more efficiently.