Information technology portfolio in supply chain management using factor analysis

The adoption of information technology (IT) along with supply chain management (SCM) has become increasingly a necessity among most businesses. This enhances supply chain (SC) performance and helps companies achieve the organizational competitiveness. IT systems capture and analyze information and enable management to make decisions by considering a global scope across the entire SC. This paper reviews the existing literature on IT in SCM and considers pertinent criteria. Using principal component analysis (PCA) of factor analysis (FA), a number of related criteria are divided into smaller groups. Finally, SC managers can develop an IT portfolio in SCM using mean values of few extracted components on the relevance –emergency matrix. A numerical example is provided to explain details of the proposed method.