Chapter 12: Logistics and Supply Chain Information Systems.

Chapter 12:

Logistics and Supply Chain Information Systems

Chapter 12Management of Business Logistics, 7th

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Learning Objectives - After reading this chapter, you should be able to do the following:

Understand the overall importance of information systems to logistics and supply chain management.

Recognize key issues in information systems.

Know what is meant by the quality of information, and know what to measure to assure that this quality exists.

Understand the architecture and objectives of information systems.


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Learning Objectives

Appreciate the role of logistics in the “connected” economy, and appreciate how evolving technologies are impacting logistics and logistics processes.

Identify the structural components of the logistics information system, and understand how each contributes to the overall effectiveness of logistics and supply chain processes.


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Learning Objectives

Appreciate the importance of adapting to new information technologies.


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Logistics Profile: Applebee’s…

Restaurant ordering practice has progressed from phone to fax to Internet.

Information systems (IS) help Applebee’s to monitor pre-negotiated prices and rebates, and to better manage inventory tracking.

Internet-enabled information systems have great potential to improve the efficiency and effectiveness of supply chain activity.


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Logistics and Supply Chain Information Systems: Introduction

Many firms view effective management of logistics and supply chain activities as: Prerequisites to overall cost efficiency, and Keys to ensuring their ability to

competitively price their products and services.1

Effective information management also can help ensure that a firm meets the logistics needs of its customers.


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Contemporary Issues in Information Systems

Results from Annual Computer Sciences Corporation Study on Information Systems Management suggest that highest priorities are on customers, productivity, and performance. It is clear that Internet and E-commerce

issues are both recognizable and critical. Top technology issues are reviewed in

Tables 12-1 and 12-2.


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Table 12-1 Top Information Systems Issues for 2000 (Global Responses)


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Table 12-2 Critical Business Processes (North American Responses)


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Contemporary Issues in Information Systems

Quality of Information: Three major issues1. Availability of Information

Managers may be uncertain of needs. Supplied data not consistent with needs.

2. Accuracy of Information Three strikes and you’re out policy. Accounting practices must accommodate

logistics needs.3. Effectiveness of Communication


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Architecture and Objectives of Information Systems

Information System Building Process Figure 12-1 illustrates the information

building process. Three key types of IS people needed:

Architect to design process Systems programmer to assemble

hardware and software Data manager to build data

warehouse


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Figure 12-1 Information System Building Process


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Architecture and Objectives of Information Systems

Positioning Information in Logistics Figure 12-2 illustrates logistics information

flow. Logistics Information Systems include

coordination flows and operational flows These two flows should:

freely interchange data integrate coordination activities into

operational activities be flexible, not linear.


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Figure 12-2 Logistics Information Flow


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Figure 12-3 Examples of Information Flows


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Table 12-3 The Shift of Logistics Operations in the Connected Economy


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Major Drivers of the Connected Economy17: Customer-Centric Value Web Model

Customer-Centric Value Web Model Customers of all types are expecting

more from their suppliers, at faster speeds, and with increasing reliability.

Traditional linear supply chains are being replaced by new, consumer-centric approaches.

Examine Figure 12-4 on the next slide.


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Figure 12-4 Customer-Centric Value Web® Model


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Technology Impacts on Supply Chain Disintermediation and Evolving Technological Changes

Technology Impacts on Supply Chain Disintermediation See Figure 12-5 for these alternatives

Evolving Technological Changes See Figure 12-6 for a chronology Stand alone businesses and traditional

firms extending goods and services through web sites to more complex intelligent marketplaces.


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Figure 12-5 Technology Impacts on Supply Chain Disintermediation

(a) Simplified Supply Chain

(b) Supply Chain with Disintermediation


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Figure 12-6 Chronicle of Internet Milestones


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Exchanges Allows supply chain participants to

buy and sell needed goods and services.

Limited coordination or collaboration Trading Communities --- Figure 12-7

Hubs of suppliers, customers, manufacturers, distributors, and wholesalers brought together in an Internet interchange platform.


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Figure 12-7 Logistics Trading Exchanges


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Intelligent Marketplaces – Four elements Tools

Network optimizing software tools used. Technology

Equipment is available to all participants. Integration

Greater collaboration and seamless integration of supply chain processes.

Flexibility Trades, transactions, and solutions will

include operational flexibility components.


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On the Line: ShipChem.com

$4.6 billion chemical industry leader outsourced all its logistics operations to become a 4PL.

Replaced traditional logistics with B2B electronic commerce model, hoping to do it more effectively, cheaper, and more profitably.

Uses G-Log’s Internet-based software to link shippers, 3PLs, forwarders, and carriers.

ShipChem plans to enable better supply chain integration and collaborative planning.


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Contemporary Logistics Information Technologies

Bar coding Most commonly used automatic

identification technology Consistency of this technology important

factor in efficiency and effectiveness. Electronic Data Interchange (EDI)

B2B, computer-to-computer exchange of business data in a structured, machine- processable format. (Figure 12-8)


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Figure 12-8 EDI versus Traditional Methods


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Extensible Markup Language (XML) Method of packing information for

movement on the Internet. May replace EDI in the future.

Data management Handheld input devices and optical

scanning popular in data management. CD-ROMs are another data

management tool seeing increasing use.


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Imaging Both photographic and facsimile

processes are being used to image documents.

Artificial intelligence/expert systems Attempts to transfer human intelligence

to a machine. Expert systems replicate “best practices”

of humans to a computer-based system.


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RF technology Uses radio frequency to transmit computer

outputs, possibly from an expert system to human operated devices, such as, a forklift.

Optimizes quality, efficiency, and accuracy. Onboard computers and satellite tracking

Uses systems such as GPS to track and communicate with mobile and/or remote vehicles.


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Logistics Information Systems

Definition An interacting structure of people,

equipment, and procedures that together make relevant information available to the logistics manager for the purposes of planning, implementation, and control.23

Examine Figure 12-9 on the next slide.


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Figure 12-9 Logistics Information Systems


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Logistics Information Systems: Planning System

Illustrated in Figure 12-10 Provides decision support for logistics managers

Logistics functional databases --- Table 12- 4 Comprehensive relational database that

contains the type of information needed to make effective decisions.

Greatest use in the transportation, inventory, and product areas with warehousing and customer areas showing less progress.


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Figure 12-10 Supply Chain Functional Scope: Planning and Execution


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Table 12-4 Trends in Logistics Data Computerization


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Logistics Information Systems

Types of modeling approaches --- Table 12-5

Optimization Searches for “best” solution

Simulation Replicates the logistics network

Heuristic Used for broader, non-optimum solutions


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Table 12-5 Logistics Decisions


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Logistics Information Systems: Execution System Examine Figure 12-11

Responsible for short-term, day-to-day functioning of the logistics system.

Include technologies that help manage warehousing, transportation, international trade, and inventory.

Many recent advances in technology and these advances will most likely continue to evolve and impact logistics management in the future.


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Figure 12-11 Direct Materials Purchasing Moves Online


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Logistics Information Systems: Research and Intelligence System Environmental scanning

Undirected viewing General exposure to information

Conditioned viewing Directed exposure to information

Informal search Limited and unstructured effort to find

information Formal search

Deliberate effort to find information relating to a specific issue


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Logistics Information Systems: Knowledge Management

To maximize the results of an environmental scan, the logistics manager needs to consult: Logistics area employees Channel partners Internal audit or external consultant Other internal logistics initiatives

It is increasingly popular to dedicate a web site to hold information from the scan.


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Logistics Information Systems: Reports and Outputs System

Many logistics managers do not believe that reports communicate effectively.

Communication occurs only if the message keys into the receiver’s values and responds directly to the needs of the recipient.

Types of reports Planning reports Operating reports Control reports


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Adapting to New Information Technologies Relevant issues in the search for new

technologies Firms must have a scientific and intuitive

knowledge of customer and supplier information requirements.

Lack of coordination and integration among key logistics and supply chain processes.

See that logistics organizational strategies move from a functional to a process orientation.

Early implementation efforts may suffer due to poor data or the non-availability or non-sharing of future data.


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Adapting to New Information Technologies

Relevant issues in the search for new technologies The organization must have the financial

resources needed to assure a smooth, full implementation, and the people willing to accept and use new technologies.

Firms must create opportunities for interaction and team efforts among logistics managers and those others most knowledgeable about information technologies.


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Figure 12-12 Critical Emerging Technologies

1.19

1.32

1.54

2.10

2.67

3.68

Modeling/ Simulation

KnowledgeManagement

AutomaticTransaction System

Groupware

Internet/ WWW

E-commerce

Level of Criticality

Chapter 12: Summary and Review Questions

Students should review their knowledge of the chapter by checking out the Summary and

Study Questions for Chapter 12.

End of Chapter 12 Slides

Logistics and Supply Chain Information Systems

Chapter 12: Logistics and Supply Chain Information Systems.

Documents

Transcript of Chapter 12: Logistics and Supply Chain Information Systems.