International Operations Management

1. International Operations Management MGMT 6367 Lecture 13 Instructor: Yan Qin Fall 2012

2. Outline • Four groups of Information Systems • Planning and execution systems • Communication systems • Identification systems • Electronic marketplaces

3. Information

4. Information Systems • Information systems are used as tools to collect, process, and transmit information as a basis for operating businesses. • Information systems used in logistics and supply chain management can be divided into four main groups: • Planning and execution systems, which include databases and software used in support of internal business processes in a company; • Communication systems, which aimed at communicating information within and between companies; • Identification systems, which are used to identify goods in the material flows; • Electronic marketplaces, used to facilitate communications and transactions between different parties.

5. Figure: Information Systems

6. Planning and Execution Systems • There are two types of planning and execution systems: • Enterprise resource planning (ERP) • An ERP system is a database and a collection of software programs which provide and process information required for administrative management and control of activities in a company. • Different types of specialized planning systems • ERP can be supplemented by specialized programs to support more specific planning needs.

7. ERP • ERP systems are divided into modules which in turn may be grouped into different application areas. • Common application areas are finance, production, marketing/sales, distribution, and human resources. • An ERP system can thus be configured so that it fulfills company-specific requirements of information access and processing.

8. IFS’s ERP system • Here is a snapshot of the modules available in IFS’sERP system. You can heck out the details of the modules at http://www.ifsworld.com/en-na/product/

9. Specialized Planning Systems • Warehouse Management Systems (WMS) • Common functions in the WMS are order-reception, order picking, inventory management, storage space allocation, and material management activities such as re-order point calculation and the generation of purchase orders. • Transport Management Systems (TMS) • Common functions include design of transport network, route planning, load planning (that is which combination of goods is optimal to send in one load), tracking, and transport-related document management.

10. Specialized Planning Systems • Advanced Planning & Scheduling Systems (APS) • Other terms used include Advanced Planning & Optimization (APO), Advanced Planning Systems (APS) and Supply Chain Planning (SCP). • APS offers more detailed and advanced decision support as compared to ERP. • The decision plans may depend on advanced mathematics and logical algorithms; • They support planning that considers various realistic business limitations in planning processes (such as capacity, material flow, and etc.); • They support scenario simulation and “what-if” analysis

11. Specialized Planning Systems • Customer Relationship Planning (CRM) • It usually supports marketing and sales processes in different ways and can be independent or incorporated in an ERP system. • Labor Management System (LMS) • It manages planning of demand, capacity, and use of personnel, considering working times, shifts, breaks, and etc. • Product Content Data Management system (PCDM) • It manages product data and enables several business units and organizations to work with a joint database using unique item numbers.

12. Specialized Planning Systems • Supply-chain Event Management (SCEM) • This is a system that enables users to set parameters which will trigger messages if a certain event occurs or if deviations from normal procedure arise. • Supply-chain Visibility (SCV) • SCV is a group of tools for showing information on inventory levels, production status, delivery status, deviations, and etc, with the help of graphics, colors, and sounds. • Many SCV tools are usually build in to SCEM.

13. Information Communication Methods • Communication methods enable the exchange of information between different parties. • Common communication methods include: • Electronic Data Interchange (EDI) and Web-EDI; • Electronic Date Access; • Internet; • Telephone, letter, fax, and email; • Radio-frequency communication; • Satellite communication.

14. EDI • EDI means that data are transferred from one computer system to another in a predefined and standardized format and in such a way that the receiving system can interpret and process the information. • EDI standards include: • Edifact (Electronic data interchange for administration), UN standard • Odette, used within the automobile industry in Europe • ANSI X.12, an American EDI standard

15. How EDI communication operates?

16. Web-based EDI systems • Introduction of EDI requires large investments and high IT competence. Running costs are also quite high. For these reasons, EDI is usually used in large companies. • Web-based EDI is a good solution for companies also dealing with small customers. • What happens is that a major customer can still communicate with the supplier via EDI message exchange, while smaller customers without EDI can use a web browser to translate EDI messages sent from the supplier into readable files. • Smaller customers without EDI can also use the web browser to sent information as EDI messages to the supplier.

17. EDA • EDA means that a company makes parts of the information contents of its ERP system accessible to its customers or suppliers. • In this way, external partners are provided with the option of online communication with the company’s databases. Some applications include: • Customers and suppliers can thus enter and maintain data about their own companies and products in a manufacturer’s databases; • Customers can place orders in the sellers system; • Suppliers can oversee and manage their customers inventories. • The limitation is the restrictions on access to information set by a company to which connection is being made.

18. Internet • Websites with the aim of conveying specifically updated information are called portals. • Suppliers can have continuous access to customer companies’ stock levels, forecasts, delivery service measurements, and etc. by logging into a special supplier portal. • Ex: The Hauler Lauder Division within Volvo Construction Equipment has developed a Web portal to communicate with its suppliers. Suppliers are able to read, download, and comment on figures on the portal. • Web-based communication is simple to use and relatively inexpensive to establish.

19. Other Communication Methods • Telephone, letter, fax, and emails • These methods have their greatest strengths in unstructured and spontaneous exchange of information. • Radio-frequency data communication (RFDC) • RFDC works in the same way as communication via mobile telephones, except that a different technology is used. • It is widely used within distribution and taxi industries, and also indoors in large warehouse and factory environments. • Satellite communication • This methods works in the same way as mobile telephones. • The disadvantage is that it is relatively expensive.

20. Data Capture Systems • Identification systems are used to enable automatic data capture, or to identify objects, capture information about them and transfer that information to a computer system without any manual inputs being required. • Common identification systems include: • Bar codes • Radio Frequency Identification (RFID) • Magnetic strips • Optical character recognition • Global Positioning System (GPS)

21. Bar Codes • Bar codes are structured on line symbols that represent different alphanumeric or numeric characters. • Common types of bar codes for marking and identifying consumer products: • European Article Numbering (EAN) • Universal Product Code (UPC) • Code 128 • A more advanced code that can contain 128 characters and includes alphanumeric characters without requiring further space. • PDF 147 • The most common two-dimensional bar code and has higher security levels than one-dimensional bar codes.

22. 1- Vs. 2-dimension bar codes

23. RFID • RFID is a method of uniquely identifying an object using a tag that carries a unique code or identification. • An RFID system consists of readers and tags capable of storing and transmitting information.

24. RFID Vs. Bar code

25. Other Identification Systems • Magnetic strips • They are usually used in industrial applications on smart cards. • It is possible to charge the strips with new data on an almost infinite number of occasions. • Optimal Character Recognition (OCR) • OCR numbers are used as reference numbers for back payment slips, for example, and are not widely used in industry. • GPS • GPS uses satellites for identifying mobile-units such as trucks and containers.

26. Electronic Marketplaces • An electronic marketplace or exchange is an Internet-based solution which enables purchasing and selling activities between companies and other companies. • Efficiency can be achieved by forms of collaboration and transactions being simplified, automated, and coordinated. • There are two types of marketplaces: • Vertical marketplaces where sellers and purchasers are from the same industry. • Horizontal marketplaces where buyers and sellers are from different industries. E-Market service: a website with a list of E-marketplaces in different areas: http://www.emarketservices.com/start/eMarket-Directory/index.html