Sunil Pandey, Omkar Chauhan, Amir Ansari, Bhushan Pisaal & Shahid Ansari

On

Logistics and Supply Chain Information Systems

Learning Objectives

After reading this chapter, you should be able to do the following:

Understand the overall importance of information systems to logistics and supply chain management. Recognize key issues in information systems. Know what is meant by the quality of information, and know what to measure to assure that this quality exists. Understand the architecture and objectives of information systems.
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Learning Objectives

Appreciate the role of logistics in the connected economy, and appreciate how evolving technologies are impacting logistics and logistics processes. Identify the structural components of the logistics information system, and understand how each contributes to the overall effectiveness of logistics and supply chain processes.
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Learning Objectives

Appreciate the importance of adapting to new information technologies.

Logistics Profile:

Applebees

Restaurant ordering practice has progressed from phone to fax to Internet. Information systems (IS) help Applebees to monitor pre-negotiated prices and rebates, and to better manage inventory tracking. Internet-enabled information systems have great potential to improve the efficiency and effectiveness of supply chain activity.
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Logistics and Supply Chain Information Systems: Introduction

Many firms view effective management of logistics and supply chain activities as: Prerequisites to overall cost efficiency, and Keys to ensuring their ability to competitively price their products and services. Effective information management also can help ensure that a firm meets the logistics needs of its customers.
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Contemporary Issues in Information Systems

Results from Annual Computer Sciences Corporation Study on Information Systems Management suggest that highest priorities are on customers, productivity, and performance. It is clear that Internet and E-commerce issues are both recognizable and critical.

Contemporary Issues in Information Systems

Quality of Information: Three major issues 1. Availability of Information Managers may be uncertain of needs. Supplied data not consistent with needs. 2. Accuracy of Information Three strikes and youre out policy. Accounting practices must accommodate logistics needs. 3. Effectiveness of Communication
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Architecture and Objectives of Information Systems

Information System Building Process Three key types of IS people needed: Architect to design process Systems programmer to assemble hardware and software Data manager to build data warehouse.

Architecture and Objectives of Information Systems

Positioning Information in Logistics Logistics Information Systems include coordination flows and operational flows These two flows should: freely interchange data integrate coordination activities into operational activities be flexible, not linear. See the figure 12-2
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Figure 12-2

Logistics Information Flow

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Figure 12-3

Examples of Information Flows

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Table 12-3 The Shift of Logistics

Operations in the Connected Economy

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Major Drivers of the Connected Economy17:

Customer-Centric Value Web Model

Customer-Centric Value Web Model Customers of all types are expecting more from their suppliers, at faster speeds, and with increasing reliability. Traditional linear supply chains are being replaced by new, consumer-centric approaches. Examine Figure 12-4 on the next slide.
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Figure 12-4 Customer-Centric

Value Web Model

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Technology Impacts on Supply Chain Disintermediation and Evolving Technological Changes

Technology Impacts on Supply Chain Disintermediation See Figure 12-5 for these alternatives Evolving Technological Changes See Figure 12-6 for a chronology Stand alone businesses and traditional firms extending goods and services through web sites to more complex intelligent marketplaces.
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Figure 12-5 Technology Impacts on

Supply Chain Disintermediation

(a) Simplified Supply Chain

(b) Supply Chain with Disintermediation

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Figure 12-6

Chronicle of Internet Milestones

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Major Drivers of the Connected Economy17:

Customer-Centric Value Web Model

Intelligent Marketplaces Four elements Tools Network optimizing software tools used. Technology Equipment is available to all participants. Integration Greater collaboration and seamless integration of supply chain processes. Flexibility Trades, transactions, and solutions will include operational flexibility components.
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On the Line:

ShipChem.com
$4.6 billion chemical industry leader outsourced all its logistics operations to become a 4PL. Replaced traditional logistics with B2B electronic commerce model, hoping to do it more effectively, cheaper, and more profitably. ShipChem plans to enable better supply chain integration and collaborative planning.

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Contemporary Logistics Information Technologies

Bar coding Most commonly used automatic identification technology Consistency of this technology important factor in efficiency and effectiveness. Electronic Data Interchange (EDI) B2B, computer-to-computer exchange of business data in a structured, machineprocessable format. (Figure 12-8)
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Figure 12-8

EDI versus Traditional Methods

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Contemporary Logistics Information Technologies

Extensible Markup Language (XML) Method of packing information for movement on the Internet. May replace EDI in the future. Data management Handheld input devices and optical scanning popular in data management. CD-ROMs are another data management tool seeing increasing use.
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Contemporary Logistics Information Technologies

Imaging Both photographic and facsimile processes are being used to image documents. Artificial intelligence/expert systems Attempts to transfer human intelligence to a machine. Expert systems replicate best practices of humans to a computer-based system.
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Contemporary Logistics Information Technologies

RF technology Uses radio frequency to transmit computer outputs, possibly from an expert system to human operated devices, such as, a forklift. Optimizes quality, efficiency, and accuracy. Onboard computers and satellite tracking Uses systems such as GPS to track and communicate with mobile and/or remote vehicles.
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Logistics Information Systems

Definition An interacting structure of people, equipment, and procedures that together make relevant information available to the logistics manager for the purposes of planning, implementation, and control. Examine Figure 12-9 on the next slide.

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Figure 12-9

Logistics Information Systems

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Logistics Information Systems:

Planning System

Illustrated in Figure 12-10 Provides decision support for logistics managers

Comprehensive relational database that contains the type of information needed to make effective decisions. Greatest use in the transportation, inventory, and product areas with warehousing and customer areas showing less progress.

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Figure 12-10 Supply Chain Functional

Scope: Planning and Execution

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Table 12-4

Trends in Logistics Data Computerization

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Adapting to New Information Technologies

Relevant issues in the search for new technologies Firms must have a scientific and intuitive knowledge of customer and supplier information requirements. Lack of coordination and integration among key logistics and supply chain processes. See that logistics organizational strategies move from a functional to a process orientation. Early implementation efforts may suffer due to poor data or the non-availability or non-sharing of future data.
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Adapting to New Information Technologies

Relevant issues in the search for new technologies The organization must have the financial resources needed to assure a smooth, full implementation, and the people willing to accept and use new technologies. Firms must create opportunities for interaction and team efforts among logistics managers and those others most knowledgeable about information technologies.
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Figure 12-12 Critical Emerging Technologies

E-commerce Internet/WWW Groupware Automatic Transaction System Knowledge Management Modeling/Simulation

3.68 2.67 2.10 1.54 1.32 1.19

Level of Criticality

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