Final answer:
Information technology tools have revolutionized supply chain management by reducing transportation costs, improving the management of long-distance connections, and making it easier to handle information-heavy products and services. Globalization, driven by these technological improvements as well as international trade agreements, has a direct impact on SCM practices. The extent to which IT influences firm size also plays a role in shaping the structure of supply chains.
Step-by-step explanation:
Information technology (IT) tools have significantly enhanced the efficiency and effectiveness of supply chain management (SCM). Advanced IT tools have driven down transportation costs and simplified the management of long-distance economic relationships in production and sales. By reducing the costs of information transmission, IT has enabled quicker and more effective coordination across various parts of the supply chain. For instance, the use of telecommunications has made it feasible to transport valuable products and services, such as computer software and financial advice, at ever-lower costs, greatly benefiting SCM. Additionally, sharing these technological advances with developing countries helps to speed up the distribution of more refined products in the market. Improvements in both technology and labor rights policies are integral to SCM, as they ensure sustainability and resilience during national emergencies, as well as help firms stay committed to their workforce.
Globalization has been fueled by cheaper and more effective shipping and air cargo, along with computing and telecommunications breakthroughs. This trend has been further encouraged by international agreements that promote greater trade, thereby influencing SCM. Furthermore, the debate on whether new IT will lead to smaller or larger firm sizes is pertinent to SCM, as it could affect the structure and management of supply chains.