Transcript Document

Chapter 9
Information Flows and Technology
Lee, Yen-Feng
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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
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
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
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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
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Networked desktop
Laptops, PDAs
Mobile phones
Other electronic devices
 Provide 24/7 visibility
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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.
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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
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The benefits of information visibility
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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
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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)
Figure 9.1 Information technologies in global logistics and supply
chain management (adapted from Sherer, 2005)
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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.
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
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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
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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
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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
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Warehouse management systems
Manage and control warehouse and
distribution center
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?
Processing Amount
•Human Labor
1
10 sec
10
100 sec
100
1,000 sec
1,000
1 hr 47 min
•Barcode Scan
2 sec
20 sec
200 sec
33 min
•RFID Tag
0.1 sec
1 sec
10 sec
1 min 40 sec
•Source: http://www.itri.org.tw
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Figure 9.2 A basic logistics-related RFID application
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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
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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
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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
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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
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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
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Thanks for your attention!