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ROLE OF IT IN SCM
SUPPLY CHAIN INTEGRATION

   Supply chain integration is nothing but integration of
    various activities related to logistics system of the firm
    and its further integration with logistics systems of
    business partners like vendors, customers and 3PL
    service providers.

   Integration of logistics functions deals with a firm’ s
    internal network in terms of factories, warehouses,
    production equipments and service centres.
INFORMATION TECHNOLOGY SOLUTION
                                      FOR
                            SUPPLY CHAIN INTEGRATION

   For high level of supply chain integration, it is essential
    to develop adequate information systems and use
    information technology that manages
     product flow,
     information flow,
     and cash flow from end to end on real- time basis.
IT INFRASTRUCTURE FOR
SUPPLY CHAIN INTEGRATION
ELECTRONIC DATA
                             INTERCHANGE (EDI)
   EDI is an inter-organization computer-to-computer
    exchange of standard business documents in a
    structured and machine-processable format without
    human intervention to improve the speed and
    accuracy of the information flow.
COMPARISON OF PAPER AND EDI FLOWS
COMPONENTS OF EDI




EDI Standard   EDI Software   Communication Medium
BENEFITS OF EDI
    The major benefits of EDI in supply chain
    integration are:
   Improves customer responsiveness
   Reduces transaction costs and times
   Increases accuracy and productivity
   Strengthens supply chain relationships
   Increases ability to compete globally
   Improves quality of decision to exploit business
    opportunities.
LIMITATIONS OF EDI

    There are two major limitations of EDI that restricts its
    scope of use, which are:
   It needs highly sophisticated and private IT
    infrastructure resulting into huge costs; and
   As EDI is an inter-organization, computer-to-computer
    exchange of standard business documents in a
    structured and machine-processable format, hence,
    day-to-day flexible data cannot be shared between
    supply chain partners. Supply chain integration needs
    more flexible information sharing on continuous basis
    apart from standard business documents.
BAR CODE SYSTEM (BCS)

   The bar code system is an identification technology
    wherein there is placement of computer-readable codes
    on items, cartons and containers in the form of grouping
    of parallel bars (usually blocks) of different widths
    separated by light spaces (usually white), again, of
    different widths.

   It facilitates speedier flow of logistical information such
    as quick tracking receipts, movement details, product
    identification, etc., with a lesser probability of error .
CHARACTERISTICS OF A
TYPICAL BAR CODE
BENEFITS OF BAR CODE SYSTEM
   Speeds up data entry process
   Enhances data accuracy
   Reduces material handling labour
   Minimizes on-hand inventory
   Monitors labour efficiency
   Improves customer service
BENEFITS OF BAR CODE SYSTEM
   Reduces product recall
   Verifies orders at receiving and shipping
   Reduces work-in-process idle time
   Monitors and controls shop floor activity
   Improves shop floor scheduling
   Optimizes floor space
   Improves product yield or reduces scrap
ENTERPRISE RESOURCE PLANNING (ERP)

   ERP is a computerized integrated set of application
    software modules for
      different business processes such as production,
      distribution, financial, human resources, procurement,
      supply china management, etc.,
     used by firms providing
            operational, managerial and strategic information for making
            decisions strategically to improve the productivity, quality and
            competitive advantage.
ERP SYSTEM COMPONENTS
CRITICAL ERP IMPLEMENTATION
                                    ISSUES


   Never-ending implementation
   Importance of process mapping
   Process redesign
   Use of consultants
   Excessive cost
   Resistance to change
   Errors during implementation
   Rapid technological change
BENEFITS OF ERP
   Improving productivity and enhancing a competitive
    edge
   Bringing about a tradeoff between demand and
    supply
   Bringing together people who work on shared tasks
   Ensuring a smoother flow of inventory and
    information at all levels
   Reducing the replenishment cycle time
   Overall organizational look-ahead capability and
    control.
COMPONENTS OF EDI
   Intranet
    Intranet is an internal web of a firm, which allows only
    internal users (firm’ s own employees) to access and
    share data through electronic messaging.
   Extranet
    Extranets operate outside of the firm, connecting
    vendors, channel partners, third-party logistics service
    providers and/or end users to access and share internal
    corporate information in restricted manner .
   Internet
    The internet refers to the firm’ s web site which can be
    accessed from anywhere in the world by anybody.
INTRANET, EXTRANET AND INTERNET
APPLICATIONS IN SUPPLY CHAIN INTEGRATION
EMERGING TECHNOLOGIES IN
                             SUPPLY CHAIN INTEGRATION

   Voice Systems
     It allows people to exchange data with other s through a
      computer without the need for key pad entry.
     It is generally through voice/speech technology.



   Memory in a Button
     They contain multiple microprocessors
     Several pages of information can be stored in it.


   Radio Frequency Technology (RFID)
       It is a data collection techniques that passes product
        information via radio waves to a receiving unit.
WEB-BASED SUPPLY CHAIN
   A Web-based supply chain is dynamic, high
    performance network of customer and vendor
    partnerships and information flow creating new and
    unique value proposition mainly due to addition of
    digital value.
   Value Prepositions through Web based supply
    chain:
     Super Service
     Convenient Solution
     Customization
WEB-BASED SUPPLY CHAIN INTEGRATION
                                                          Consumer


                    Advanced        Distribution
                     Planning        Channels
                  and Scheduling
 Carriers & 3PL                     Collaborative
                   Web-Based          Planning      Distribution
                   Supply chain    Forecasting &    Warehouse
                                   Replenishment
  Vendors
                      Agile           Order
                   Manufacturing    Management
WEB BASED SUPPLY CHAIN & ORDER MANAGEMENT
SYSTEM

   Flexible Business Process Management

   Unified Data Model

   Robust Integration Framework

   Self-service Tools
ORDER MANAGEMENT APPLICATION
COLLABORATIVE PLANNING, FORECASTING AND
                       REPLENISHMENT (CPFR) SYSTEM

   Collaborative planning, forecasting, and replenishment is
    a multi-industry that uses the Internet to achieve
    cooperation across the members of a supply chain to
    better sense demand, plan, and execute the flow of
    goods.
CPFR PROCESS MODEL
   Develop a front-end agreement
   Create a joint business plan
   Create a sales forecast
   Identify exceptions for the sales forecast
   Resolve/collaborate on exception items
   Create all order forecast
   Identify exceptions for the order forecast
   Resolve/collaborate on exception items
   Generate the order
AGILE MANUFACTURING SYSTEM
   Agile manufacturing system is an IT enabled
    process of web-based supply chain integration
    facilitating firms to support the demand and mass
    customization requirements.
   Its applications support complex flow
    manufacturing, the just-in-time-based, pulls
    production method that enables manufacturing in
    lot sizes of one.
AGILE MANUFACTURING SYSTEM
    Benefits in web-based supply chain through agile
    manufacturing application:
   Greater product customization
   Rapid introduction of new or modified products
   Interactive customer relationships
   Dynamic reconfiguration production processes
ADVANCED PLANNING AND SCHEDULING (APS)
                    SYSTEM
   Advanced planning and scheduling system is high
    analytical applications software that uses
    mathematical models and related techniques to find
    out optimal solutions to complex production and
    supply problems.
   Advantages of APS system:
     More flexible system handling more varied supply chain
      requirements.
     Mathematical models based supply and support
      optimization.
     Optimization of supply chain structures.
     Optimization is based in strategic issues of supply chain
      such as, costs, customer value and services, and
      profitability
BENEFITS OF WEB-BASED SUPPLY CHAIN
   Delivers cost saving through supply chain
    integration
   Reduce inventory across supply chain network
   Reduce procurement costs and improve vendor
    management
   Improve customer value and services
   Increasing revenues and profitability
CHALLENGES TO WEB-BASED SUPPLY CHAIN
   Security issues

   Changes to business process

   Coping with weaker supply chain links

   Sharing of costs and benefits

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Role of it in scm

  • 1. ROLE OF IT IN SCM
  • 2. SUPPLY CHAIN INTEGRATION  Supply chain integration is nothing but integration of various activities related to logistics system of the firm and its further integration with logistics systems of business partners like vendors, customers and 3PL service providers.  Integration of logistics functions deals with a firm’ s internal network in terms of factories, warehouses, production equipments and service centres.
  • 3. INFORMATION TECHNOLOGY SOLUTION FOR SUPPLY CHAIN INTEGRATION  For high level of supply chain integration, it is essential to develop adequate information systems and use information technology that manages  product flow,  information flow,  and cash flow from end to end on real- time basis.
  • 4. IT INFRASTRUCTURE FOR SUPPLY CHAIN INTEGRATION
  • 5. ELECTRONIC DATA INTERCHANGE (EDI)  EDI is an inter-organization computer-to-computer exchange of standard business documents in a structured and machine-processable format without human intervention to improve the speed and accuracy of the information flow.
  • 6. COMPARISON OF PAPER AND EDI FLOWS
  • 7. COMPONENTS OF EDI EDI Standard EDI Software Communication Medium
  • 8. BENEFITS OF EDI The major benefits of EDI in supply chain integration are:  Improves customer responsiveness  Reduces transaction costs and times  Increases accuracy and productivity  Strengthens supply chain relationships  Increases ability to compete globally  Improves quality of decision to exploit business opportunities.
  • 9. LIMITATIONS OF EDI There are two major limitations of EDI that restricts its scope of use, which are:  It needs highly sophisticated and private IT infrastructure resulting into huge costs; and  As EDI is an inter-organization, computer-to-computer exchange of standard business documents in a structured and machine-processable format, hence, day-to-day flexible data cannot be shared between supply chain partners. Supply chain integration needs more flexible information sharing on continuous basis apart from standard business documents.
  • 10. BAR CODE SYSTEM (BCS)  The bar code system is an identification technology wherein there is placement of computer-readable codes on items, cartons and containers in the form of grouping of parallel bars (usually blocks) of different widths separated by light spaces (usually white), again, of different widths.  It facilitates speedier flow of logistical information such as quick tracking receipts, movement details, product identification, etc., with a lesser probability of error .
  • 12. BENEFITS OF BAR CODE SYSTEM  Speeds up data entry process  Enhances data accuracy  Reduces material handling labour  Minimizes on-hand inventory  Monitors labour efficiency  Improves customer service
  • 13. BENEFITS OF BAR CODE SYSTEM  Reduces product recall  Verifies orders at receiving and shipping  Reduces work-in-process idle time  Monitors and controls shop floor activity  Improves shop floor scheduling  Optimizes floor space  Improves product yield or reduces scrap
  • 14. ENTERPRISE RESOURCE PLANNING (ERP)  ERP is a computerized integrated set of application software modules for  different business processes such as production, distribution, financial, human resources, procurement, supply china management, etc.,  used by firms providing  operational, managerial and strategic information for making decisions strategically to improve the productivity, quality and competitive advantage.
  • 16. CRITICAL ERP IMPLEMENTATION ISSUES  Never-ending implementation  Importance of process mapping  Process redesign  Use of consultants  Excessive cost  Resistance to change  Errors during implementation  Rapid technological change
  • 17. BENEFITS OF ERP  Improving productivity and enhancing a competitive edge  Bringing about a tradeoff between demand and supply  Bringing together people who work on shared tasks  Ensuring a smoother flow of inventory and information at all levels  Reducing the replenishment cycle time  Overall organizational look-ahead capability and control.
  • 18. COMPONENTS OF EDI  Intranet Intranet is an internal web of a firm, which allows only internal users (firm’ s own employees) to access and share data through electronic messaging.  Extranet Extranets operate outside of the firm, connecting vendors, channel partners, third-party logistics service providers and/or end users to access and share internal corporate information in restricted manner .  Internet The internet refers to the firm’ s web site which can be accessed from anywhere in the world by anybody.
  • 19. INTRANET, EXTRANET AND INTERNET APPLICATIONS IN SUPPLY CHAIN INTEGRATION
  • 20. EMERGING TECHNOLOGIES IN SUPPLY CHAIN INTEGRATION  Voice Systems  It allows people to exchange data with other s through a computer without the need for key pad entry.  It is generally through voice/speech technology.  Memory in a Button  They contain multiple microprocessors  Several pages of information can be stored in it.  Radio Frequency Technology (RFID)  It is a data collection techniques that passes product information via radio waves to a receiving unit.
  • 21. WEB-BASED SUPPLY CHAIN  A Web-based supply chain is dynamic, high performance network of customer and vendor partnerships and information flow creating new and unique value proposition mainly due to addition of digital value.  Value Prepositions through Web based supply chain:  Super Service  Convenient Solution  Customization
  • 22. WEB-BASED SUPPLY CHAIN INTEGRATION Consumer Advanced Distribution Planning Channels and Scheduling Carriers & 3PL Collaborative Web-Based Planning Distribution Supply chain Forecasting & Warehouse Replenishment Vendors Agile Order Manufacturing Management
  • 23. WEB BASED SUPPLY CHAIN & ORDER MANAGEMENT SYSTEM  Flexible Business Process Management  Unified Data Model  Robust Integration Framework  Self-service Tools
  • 25. COLLABORATIVE PLANNING, FORECASTING AND REPLENISHMENT (CPFR) SYSTEM  Collaborative planning, forecasting, and replenishment is a multi-industry that uses the Internet to achieve cooperation across the members of a supply chain to better sense demand, plan, and execute the flow of goods.
  • 26. CPFR PROCESS MODEL  Develop a front-end agreement  Create a joint business plan  Create a sales forecast  Identify exceptions for the sales forecast  Resolve/collaborate on exception items  Create all order forecast  Identify exceptions for the order forecast  Resolve/collaborate on exception items  Generate the order
  • 27. AGILE MANUFACTURING SYSTEM  Agile manufacturing system is an IT enabled process of web-based supply chain integration facilitating firms to support the demand and mass customization requirements.  Its applications support complex flow manufacturing, the just-in-time-based, pulls production method that enables manufacturing in lot sizes of one.
  • 28. AGILE MANUFACTURING SYSTEM Benefits in web-based supply chain through agile manufacturing application:  Greater product customization  Rapid introduction of new or modified products  Interactive customer relationships  Dynamic reconfiguration production processes
  • 29. ADVANCED PLANNING AND SCHEDULING (APS) SYSTEM  Advanced planning and scheduling system is high analytical applications software that uses mathematical models and related techniques to find out optimal solutions to complex production and supply problems.  Advantages of APS system:  More flexible system handling more varied supply chain requirements.  Mathematical models based supply and support optimization.  Optimization of supply chain structures.  Optimization is based in strategic issues of supply chain such as, costs, customer value and services, and profitability
  • 30. BENEFITS OF WEB-BASED SUPPLY CHAIN  Delivers cost saving through supply chain integration  Reduce inventory across supply chain network  Reduce procurement costs and improve vendor management  Improve customer value and services  Increasing revenues and profitability
  • 31. CHALLENGES TO WEB-BASED SUPPLY CHAIN  Security issues  Changes to business process  Coping with weaker supply chain links  Sharing of costs and benefits