Introduction

Information is the driver that serves as the glue to create a coordinated supply chain

Characteristics of Useful Supply Chain Information

Accurate

Accessible in a timely manner

Information must be of the right kind

Provides supply chain visibility

The Importance of Information in a Supply Chain

Relevant information available throughout the supply chain allows managers to make
decisions that take into account all stages of the supply chain

Allows performance to be optimized for the entire supply chain, not just for one stage leads
to higher performance for each individual firm in the supply chain

Use of Information Technology in a Supply Chain

Hardware and software
used throughout the supply
chain to gather and analyse
information

Strategic
Operational
Inventory

Captures and delivers

information needed to make
good decisions

Effective use of IT in the

supply chain can have a
significant impact on
supply chain performance

location decisions

what products will be produced during todays production run

demand patterns, carrying costs,
stockout costs, ordering costs

Transportation

costs, customer locations, shipment sizes

Facility

location, capacity, schedules of a facility

The Supply Chain IT Framework

The Supply Chain Macro Processes

Customer Relationship Management (CRM)

Internal Supply Chain Management (ISCM)

Supplier Relationship Management (SRM)

Why Focus on the Macro Processes?

Macro Processes Applied to the Evolution of Software

Macro Processes in a Supply

Chain

Supplier
Relationshi
p
Managemen
t (SRM)

Internal
Supply
Chain
Managemen
t (ISCM)

Customer
Relationshi
p
Managemen
t (CRM)

Transaction Management Foundation (TFM)

Customer Relationship Management

Goals

Generate Customer demand

Facilitate transmission
Tracking of orders

Drawbac
ks of
poor
CRM

CRM consists of processes that take places between an enterprise and

its customer downstream in the supply chain

Demand may get lost

Orders may not be processed and executed effectively
Poor customer experience

Call/Servi
Call/Servi
ce
ce Center
Center

Order
Order
Managem
Managem
ent
ent

Sell
Sell

Marketin
Marketin
g
g

Key Processes under CRM

Involves key decisions regarding Which customers to target
How to target customers
How to Price Products
How to manage the actual campaigns that target customers

Focuses on making an actual sale to a customer

Provides sales force with the information it needs to make a sale
Allows salesperson(or customer) to build and configure orders by choosing among a variety of options
and features
Provides adequate due date information to customers and access information related to a customer order

Helps enterprises to plan and execute order fulfillment

Enables the customer to track his order
Provides visibility of orders across the various stages that an order flows before reaching the customer

Primary point of contact between a company and its customers

Helps customers to Place orders
Suggests products
Solve problems
Provide information on order status

Internal Supply Chain

Management
Various process are:
Strategic Planning
Demand Planing
Supply Planning
Fulfillment
Field Service

Internal Supply Chain Management

Various processes included in ISCM are as follows :
Strategic Planning focuses on the network design of the supply chain.
Demand planning consists of forecasting demand and analyzing the
impact on demand of demand management tools such as pricing and
promotions.
Supply planning Factory planning and inventory planning capabilities
are typically provided by supply planning software.
Fulfillment Links each order to a specific supply source and means of
transportation.
Field service Service processes focus on setting inventory levels for
spare parts as well as scheduling service calls.
Exg. Of ISCM software i2 Technologies, Manugistics, SAP and Oracle.

SUPPLIER RELATIONSHIP
MANAGEMENT

SRM includes those processes focused on the interaction between the

enterprise and suppliers that are upstream in the supply chain.
There is a natural fit between ISCM and SRM processes as integrating
supplier constraints is crucial when creating internal plans.
Significant improvement in supply chain performance can be achieved if
SRM processes are well integrated with appropriate CRM and ISCM
processes.
When designing a product, incorporating input from customers is a
natural way to improve the design.
Sourcing, negotiating, buying and collaborating tie primarily into ISCM
as the supplier inputs are needed to produce and execute and optimal
plan.
The SRM space is highly fragmented in terms of software providers and
not well defined.
Among the large players, SAP and Oracle have SRM functionality in
their software.

SUPPLIER RELATIONSHIP MANAGEMENT

The major SRM processes are:

a)
Design Collaboration : This aims to improve the design of products
through collaboration between manufacturers and suppliers. It
facilitates the joint selection of components. It helps in sharing of
engineering change orders between a manufacturer and its suppliers.
b)
Source : Assists in the qualification of supplier and helps in supplier
selection, contract management and supplier evaluation. Suppliers
are evaluated along several key criteria including lead time,
reliability, quality & price. The software analyze supplier performance
and manage contracts.
c)
Negotiate : The software automates the RFQ process and the
execution of auctions. The goal is to negotiate an effective contract
that specifies price and delivery parameters that match the
enterprises needs.
d)
Buy : This software executes the actual procurement of material from
suppliers. It includes the creation, management and approval of
purchase orders. It helps automate the procurement process and
decrease procurement costs and times.
e)
Supply Collaboration : It facilitates collaborative forecasting and
planning in a supply chain.

Transaction Management Foundation (TMF)

During early 1990s, ERP systems were popular.
SAP continued as the market leader, but other
powerful
ERP
players
included
Oracle,
Peoplesoft, JD Edwards and Baan.
Little focus was on 3 Macro processes, and soft
ware application on improved decision making
Automation
and
Building
Transaction
Management were given importance.
Automation of simple transaction and

Integration of store and view of data process

excelled in division and enterprise level.

Now and Future

During 1990s,
ERP companies became
largest enterprises due to huge demand
they included SAP, ORACLE, PEOPLE SOFT, JD
EDWARS and BAAN.
Real value of Transaction Management
Foundation(TMF) was realized when decision
making with in Supply Chain was improved.
Firms focused on decision making on these 3
Macro Processes- Realignment of ERP into
CRM, ISCM and CRM. This is the trend NOW
and in FUTURE.
https://www.facebook.com/ialwaysthinkprettything
s

Realignment of ERP into CRM, ISCM and CRM.

The Future of IT in the Supply

Chain

Software focused on the macro processes will become a larger share of the total
enterprise software market. IT will help integrate across macro processes, and
the strengthen of the systems.
Software as a service (SaaS):
SIPs allow subscribers to access multiple SaaS applications through a common platform
Lower startup and Maintenance cost
SAP, oracle and Microsoft increasing availability using SaaS model.

Increased availability of real time data:

Identity, location and tracking information for warehouse, inventory and transportation
In-transit visibility

Increased use of mobile technology:

Reaching end user in the supply chain
Differential Pricing strategy
Groupon offering deals at specific locations

17-14

Risk Management in IT
Major Risks:
Risk Involved with Technology upgradation
Dependence on IT and risk of failure
Resistance to change
Technical hurdles and integration in system
Needs constant upgradation
Risk Mitigation:
Install new systems incrementally
Implement level of complexity that is required
Forego old system only when new is in place
Flexible systems
Secured systems
Data Backup
Backup Plan

Supply Chain IT in Practice

1.

2.

Select an IT system that addresses the companys key success factors.

IT systems that are able to give advantage in most crucial factors.

For Example, optimal inventory levels in PC Business and utilization of

production facility for a chemical company.

Take incremental steps and measure value.

Dont implement it at once instead take it one by one

For instance, instead of installing complete supply chain system across

company at once, start first by demand planning and then move to supply
planning

Supply Chain IT in Practice

(continued)
3.

4.

Align the level of sophistication with the need for sophistication.

Trade-off between ease of implementation and level of complexity.

Lower level of sophistication leads to competitive weakness, whereas more than

necessary sophistication leads to wastage of time and money.

Use IT systems to support decision making, not to make decisions.

5.

Because of competitive and customer landscape changes, there needs to be a

corresponding change in supply chain systems.

Think about the future.

Take future trends into account.

Flexibility of IT systems.

Fulfill not only current but also future needs.

IT Application : Indias Air cargo

transportation

Individual stake holders problems:

Consignors
Lack of shipment visibility across the supply chain led to Stocking of larger
inventory to minimize stoppages in assembly line production
Lack of end to end automation
ERP systems could not be of much rescue due to the lack of similarly
capable interactive systems on the part of other stake holders (Forwarders,
CHA, banks, consignee etc.)

Freight forwarders

Forwarders role involves interaction with multiple stake holders via manual
or semi-automated media
Entering the same data in at least 6-7 different systems during the transit
of goods which ultimately led to delays, increased costs and errors

Individual stake holders problems: (Contd..)

Airlines
Since most of the forwarders dont have the capability to electronically create and
transmit the shipment data, the clients i.e. leading airlines too used to receive
enquiry and booking requests manually.
Which added to its costs, reduced profitability, and delayed transportation.
There is no audit trail for future reference
Incase of loss of papers , airlines failure to reproduce critical documents resulted in
penalties.
Revenue leakage and redundant data entry due to erroneous (AWB) Air way bill
information

CHAs(Custom House Agents)

Had to manually handle a lot of documentation (Related to operations, finances and

forwarding)
Communication through phones and e-mails
Several CHA systems were unable to maintain customer contacts or quotations

Solution: UPLIFT
Kale logistics in association with Air cargo agents
association of India (ACAAI) developed Universal
Platform for Logistics & Freight Transport (UPLIFT)
Its a first of its kind community wide automation
platform for the air cargo industry
It addressed most of the challenges by mutually
integrating a variety of clients(forwarders, consignors,
airports, seaports and customs)

After UPLIFT
Consignors
UPLIFT provided clients with complete shipment visibility
UPLIFT also ensured seamless interface to directly exchange data between
consignors systems and UPLIFT, thus ensuring end to end automation
across the supply chain

Freight forwarders

Challenges that originated due to forwarders complex coordination with

multiple stake holders were resolved by providing a single window for
interactions with all involved entities
Forwarders no longer needed to re-enter the data that had been already
entered by shipper at his end as this data now got automatically updated
into the UPLIFT system and was made available to all the constituents in
the cargo supply chain

After UPLIFT
(Contd.)
Airlines
UPLIFT enabled electronic receipt of way bill data like Master AWB for airlines.
Airlines received alerts regarding freight status update (FDU) messages and GALAXY
messages. This electronic communication prevented revenue leakage and redundant
data entry
UPLIFT, stating updated always, helped airlines remain complaint with global
initiatives such ass e-freight, without which airlines would have to bear the costs in
storage/maintenance of physical documents

CHAs
UPLIFT resolved the complications of CHAs because they can now electronically
execute multimodal air-ocean transactions, resulting into significant cost saving with
UPLIFTs multi-branch feature that can be accessed from anywhere and anytime

Thank you