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Chapter 9

Chapter 9. Information Flows and Technology Lee, Yen-Feng. Introduction. Information flows: Trigger and support physical flows. Core sections Role of information in GSC Information visibility and transparency IT applications Radio frequency identification (RFID)

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Chapter 9

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  1. Chapter 9 Information Flows and Technology Lee, Yen-Feng

  2. Introduction • Information flows: • Trigger and support physical flows. • Core sections • Role of information in GSC • Information visibility and transparency • IT applications • Radio frequency identification (RFID) • Supply chain knowledge management

  3. Question • How can we order goods without IT systems? • How about Dell, IBM, HP…in USA? • International phone call? Costly • Time differences • Mail? Waiting for weeks. • How can we manage without IT systems? • Order 1 item? 1minute per order • How about 1,000 items? 1,000 minutes = 16.66 hours

  4. The role of information in global supply chains Three key flows in supply chain 1. Material 2. Resource 3. Information Role of information flows: Delivery products At right time In right quantity To customer’s specification 4

  5. The role of information in global supply chains Key drivers supply chain IT: Increasing information complexity Increasing information proliferation Increasing information diffusion Increasing information velocity Increasing information accuracy Effective SCM Timely and accurate information Networked desktop Laptops, PDAs Mobile phones Other electronic devices Provide 24/7 visibility

  6. Information visibility Information visibility Ability to see information at the various points Across the supply chain as and when required To help to manage complexity Highly desirable, but difficult to achieve Effective information visibility Facilitated by IT Integrated and collaborative between partners.

  7. Barriers to information visibility Cultural: Reluctance to share information with partners Financial: High costs of implementing Maintaining supply chain spanning IT Technical: Information systems’ ability to ‘talk’ to each other. Hardware and Software Partners’ capability Information security Organizational: Align the numerous disparate processes Across multiple supply chain Highly complex program of activities

  8. The benefits of information visibility Customer oriented operations Time compression Reduced schedule variability Shorter planning periods Consistent partnerships Supply chain synchronization and coordination A single point of control Integrated information systems

  9. IT applications • Information technologies (IT) • Material requirements planning (MRP) • Enterprise resource planning (ERP) • Collaborative planning forecasting and replenishment (CPFR) • Electronic data change (EDI) • Warehouse management systems (WMS)

  10. Figure 9.1 Information technologies in global logistics and supply chain management (adapted from Sherer, 2005)

  11. e-Business • As the utilization of information and communication technologies (ICT) in support of all the activities of business. • Integral to trade and commerce • Allows customers to purchase on-line • Include all electronically information exchange • Essential to maintain and improve supply chain.

  12. Electronic Data Interchange (EDI) Technology for Electronic interchange of data between companies Automated without human intervention Predominant uses: 1. Purchase orders from customers to suppliers 2. Invoices for payment from suppliers to customers 3. Delivery schedule data 4. Payment instructions 5. Can be linked to an electronic funds transfer (EFT) application to enable automated payment RFID EDI

  13. Enterprise Resource Planning (ERP) Company-wide computer software system used to manage and coordinate all the resources, information, and functions of a business from shared data stores. Developed in late 1980s Core application today Spans an enterprise to integrate the various business functions across multiple locations In multinational manufacturing and logistic company Offer visibility and integration For planning and control of resources

  14. Enterprise Resource Planning (ERP) Commonly requires Business process reengineering to align work organization with the technology Solution to integration problem Need to consider the organization structure Requires: 1. financial 2. resource 3. time 14

  15. Collaborative Planning, Forecasting and Replenishment (CPFR) Developed in late 1990s Fill inter-organizational gap Wal-mart: enable with first tier supplier Scheduling logistics between suppliers and customers IT-enabled CPFR Essential in high velocity supply chains such as those of the major supermarkets Commonly offered as a ‘bolt-on’ to ERP to enable ERP to extend beyond a single organization

  16. Warehouse management systems • Manage and control warehouse and distribution center

  17. Primary RFID applications in logistics and SCM RFID application Tag, barcode and readers RFID enabled receiving area Trucks or products pass through the gate Time and quantity are recorded automatically Do you have RFID applications? 18 • Source: http://www.itri.org.tw

  18. Figure 9.2 A basic logistics-related RFID application

  19. Primary RFID applications in logistics and SCM 4 headings: Asset tracking and management Increased security of freight Improved stock management and availability Reduced errors in product data handling Advantages: Automatically identify and locate physical assets Quick response supply chain Resist extreme temperatures Harmful chemicals Scan multiple items Reusable

  20. Operational improvements from RFID Improvement Shipping consolidation Conveyance loading Conveyance tracking Shipment and item tracking Verification Storage Item tracking within a manufacturing plant Warehouse efficiency, reach, productivity and accuracy Reduced retail out-of-stock, labor requirements, pilferage, and phantom stock problems RFID adopters Walmart, Tescom Metro and Marks & Spencers

  21. Predicted future applications of RFID The ‘store of the future’: Continuous shelf inventory checking More frequent replenishment ‘Future warehousing’: Reducing floor space requirements in warehouses Enabling them to be located closer to urban areas Increased customization in manufacturing: Increase visibility of end customer requirements RFID reduce 20%~67% cost of distribution

  22. Supply chain knowledge management GLM: Multitude of information and data Filled with knowledge: Tacit and explicit Knowledge management: Capture, storage, use and sharing of knowledge SCKM knowledge management processes that span a supply chain Building up Complex knowledge of demand Enables a supply chain to begin to sense and respond to actual demand Hence the knowledge creating supply chain is able to be First-to-market Gaining competitive advantage

  23. Supply chain knowledge management Supply-side and demand-side Critical to managing supply chain performance Knowledge in individual Critical to maintain & improving Knowledge worker Long-term supply chain improvement Capture knowledge Create knowledge Make explicit 24

  24. Thanks for your attention!

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