A huge advance in information technology has already taken place in all the industries including changes in the logistics and supply chain. A fast data transfer is a result of information technology in supply chain management resulting in increased cooperation. Information technology helps restructure the entire distribution set up to achieve higher service levels and lower inventory and lower supply chain costs. IT developments have presented companies with unprecedented opportunities to gain competitive advantage. So IT investment is the pre-requisite thing for each firm in order to sustain in the market. Supply chain management (SCM) is concerned with the flow of products and information between supply chain members’ organizations. Recent development in technologies enables the organization to avail information easily in their premises. The development of Inter organisational information system for the supply chain has three distinct advantages like cost reduction, productivity, improvement and product/market strategies.