Supply Chain Integration and technology PDF

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Supply Chain Integration and technology...

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Supply Chain Integration and technology Why we need Supply Chain Management?

Supply Chain Story In the mid-1990s, Volvo found itself with excessive stocks of green cars. To move them along, the marketing departments began offering attractive special deals, so green cars started to sell. But nobody had told the manufacturing department about the promotions. It noted the increase in sales, read it as a sign that consumers had started to like green, and ramped up production.

Supply Chain Story IV:

In the late 1970s, Wal-Mart was a small retailer. At that time, Sears and Kmart dominated the retail market. Since then, Wal-Mart gained significant market share from these retailers and became the largest and most profitable retailer in the world. The reason is: its collaboration and technology driven supply chain practices. Key is Supply Chain Integration:

Integration is the interlinking of business processes, and embodies various communication channels within a supply network.

An Effective Supply Chain Integration  improves performance: 

reduce cost



increase service level



better utilize resources



effectively respond to changes in the market place

 Delivery integration  involves in coordinating and integrating the forward physical flow of deliveries between suppliers, manufacturer and customers  Information integration  involves the backward coordination of information technologies and the flow of data from customers to suppliers Degree of Integration

Uses of technology in logistics and supply chain integration Commonly used IT systems in logistics

     

Enterprise resource planning (ERP) Warehouse management system (WMS) Transportation management system (TMS) Global positioning system (GPS) Electronic data interchange (EDI) Radio frequency identification (RFID)

Enterprise resource planning (ERP)

Radio Frequency Identification (RFID)

 RFID is an automatic identification method

 Relies on storing and remotely retrieving data using tags that can be attached to or incorporated into products RFID Tags Can Tell •

What the product is

•

Where it has been

•

When it expires

•

When and where manufactured, picked, packed and shipped

Smart groceries

Limitations  For small companies, the cost of this may be too high  Radio frequency interference and RFID’s limited range (30 to 50 feet) also may be problematic Technology Supply Chain/Logistics Sustainability Need for Information Integration

Role of Information Technology in a Supply Chain u

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

u

Information provides the basis for supply chain management decisions –

Inventory

–

Transportation

–

Facility

Characteristics of Useful Supply Chain Information Information must have the following characteristics to be useful:  Accurate 

Accessible in a timely manner



The right kind



Provides supply chain visibility

Use of Information in a Supply Chain u

Inventory: demand patterns, carrying costs, stock out costs, ordering costs

u

Transportation: costs, customer locations, shipment sizes, product part tracking, tracking of vehicles

u

Facility: location, capacity, schedules of a facility; need information about trade-offs between flexibility and efficiency, demand, exchange rates, taxes, etc.

Information Technology (IT)  Most commonly used information systems in logistics:  Enterprise resource planning (ERP),  Warehouse management system (WMS),  Transportation management system (TMS),  Global positioning system (GPS),  Electronic data interchange (EDI)  Radio frequency identification (RFID) Supply Chain Management (SCM) Systems With the advent of the Internet, e-businesses began to demand different things from their SCM systems Most importantly, SCM systems vendors had to modify their products to include a Web-based interface The two basic types of SCM system software are:

 Supply Chain Planning software (SCP): uses mathematical models to predict inventory levels based on the efficient flow of resources into the supply chain  Supply Chain Execution software (SCE): is used to automate different steps in the supply chain such as automatically sending purchase orders to vendors when inventories reach specified levels Definitions and Concepts e-supply chain= A supply chain that is managed electronically, usually with Web technologies  The success of an e-supply chain depends on:  The ability of all supply chain partners to view partner collaboration as a strategic asset  Information visibility along the entire supply chain  Speed, cost, quality, and customer service  Activities and Infrastructure of e-SCM  E-procurement  Supply chain monitoring and control using RFID  Collaborative planning  Collaborative design and product development  E-logistics  Infrastructure for e-SCM  Electronic Data Interchange (EDI)  Extranets  Intranets  Corporate portals  Workflow systems and tools  Groupware and other collaborative tools Supply Chain Problems  Typical Problems along the Supply Chain  Supply chains can be very long, involving many internal and external partners located in different places  Both materials and information must flow among several entities, and these transfers, especially when manually handled, can be slow and error-prone  Companies can improve their demand forecasting by using IT-supported forecasts, which are done in collaboration with business

Technology-based Solutions  E-Commerce Solutions along the Supply Chain  Order taking can be done over the Internet, EDI, EDI/Internet, or an extranet, and may be fully automated  Order fulfillment can become instant if the products can be digitized  Electronic payments can expedite both the order fulfillment cycle and the payment delivery period

Collaborative Commerce 

Collaborative commerce (c-commerce)

The use of digital technologies that enable companies to collaboratively plan, design, develop, manage, and research products, services, and innovative electronic commerce applications Barriers to C-Commerce  Security and privacy concerns  Internal resistance to information sharing and to new approaches  Lack of internal skills to conduct collaborative commerce Three Pillars of Sustainability: Triple Bottom Line

Sustainability indicators Economic

Social

Environment

Profitability

Human rights

Energy consumption

Local economy

Occupational health and safety

Emission of air pollutants

Resilience to economic risk

Capacity building

Water quantity

Retail access

Security

Soil degradation

Revenue per square foot

Product quality

Material cycle

Output growth

Distance

Waste (weight and volume)

Labor productivity

Profit distribution

Biodiversity

Diversity of market

Quality of life

Food miles

Transport efficiency

Number of farmers markets

Eco efficiency

Intensity

Local autonomy/employment

Environmental monitoring

Sustainable logistics is concerned with reducing the environmental and other ill effects associated with the movement of freight.

4 Key Drivers of sustainability

Sustainable Logistics and SCM:  Three ways to improve the sustainability of logistics and supply chain system

Sustainab le Distribution Solutions: Techniques      

Reducing empty running, pooling and sharing capacity Increasing vehicle payload capacity Improved vehicle routing using GPS and other systems More efficient use of packaging and loading of containers Improved vehicle driving Enhancing vehicle operating efficiency...