Information technology and its tools are very popular in any organization.Information technology plays a vital role in decision making process. Information technology is very important for smooth functioning of supply chain process and for achieving organizational competitiveness, improving higher service level, lowering inventory costs of supply chain and decreasing electronic risks (e-risks).Information technologies (IT) is important component to Company business operations and success of business. Companies depend on Information Technology for fast communications, data processing and market intelligence. IT is a useful fororganization and integration within the supply chain. Information Technology will reducethe operational expenses of supply chain management. The organizations are moving towards IT Tools such as Electronic Data Exchange (EDI), Radio Frequency Identification (RFID), Bar Code, Electronic Commerce, Decision Support system, Enterprises Resource Planning (ERP) package, etc.This paper focuses on effect of Information technology and tools in improving supply chain management efficiency.