1. 1 Chapter 9 Information Flows and Technology Lee, Yen-Feng

2. 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

3. 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

4. 4 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

5. 5 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 Networked desktop Laptops, PDAs Mobile phones Other electronic devices  Provide 24/7 visibility

6. 6 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.

7. 7 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

8. 8 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

9. 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)

10. 10 Figure 9.1 Information technologies in global logistics and supply chain management (adapted from Sherer, 2005)

11. 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.

12. 12 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

13. 13 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

14. 14 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

15. 15 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

16. Warehouse management systems  Manage and control warehouse and distribution center

17. 17© 2008 John Wiley & Sons Ltd. www.wileyeurope.com/college/Mangan Figure 7.7 WMS information inputs and outputs

18. 18 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 Amount1101001,000 Human Labor10 sec100 sec1,000 sec1 hr 47 min Barcode Scan2 sec20 sec200 sec33 min RFID Tag0.1 sec1 sec10 sec1 min 40 sec Source: http://www.itri.org.tw

19. 19 Figure 9.2 A basic logistics-related RFID application

20. 20 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

21. 21 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

22. 22 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

23. 23 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

24. 24 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

25.  Thanks for your attention!