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
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!