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Supply Chain TechnologyManaging Information Flows
Learning Objectives
Appreciate the overall importance of information to supply chain
management.
Understand the role of information technology in the supply
chain.
Explain the key components of an integrated supply chain
information system.
Describe and differentiate between the primary types of supply
chain solutionsand their capabilities.
Discuss the critical issues in technology selection and
implementation processes.
Recognize the role of emerging technologies for improving supply
chaininformation management.
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Information Technology and Supply Chains
Information, along with materials and money, mustreadily flow
across the supply chain to enable theplanning, execution, and
evaluation of key functions.
Each participant in the supply chain needs relevantinformation
to make effective forecasts andoperational decisions.
Existing supply chain information technologies
support timely, cost-efficient sharing of informationbetween
suppliers, manufacturers, intermediaries,logistics services
providers, and customers.
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The Need for Information
information is the lifeline of business, driving
effectivedecisions and actions. It is especially critical to
supplychain managers because their direct line of sight tosupply
chain processes is very limited.
A wide variety of information is needed for a supplychain to
perform as anticipated.
information must be accessible, relevant, accurate,timely, and
transferable
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Information must be:
Accessible
Relevant
Accurate
Timely
Transferable
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Figure 6-2 Six Drivers of Supply Chain Excellence
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10 Golden Rules for Success Secure the commitment of
senior management.
Remember that it is not just
an information technologyproject.
Align the project withbusiness goals.
Understand the softwarecapabilities.
Select partners carefully.
Follow a provenimplementation methodology.
Take a step-by-step approach
for incremental value gains.
Be prepared to changebusiness processes.
Keep end users informed and
involved.
Measure success with keyperformance indicators(KPIs).
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Figure 6-4 Master Model of Supply Chain Excellence
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Data Collection and Synchronization
Data must be collected and synchronized so that it can be used
byskilled individuals in the planning and execution of supply
chainprocesses.
Data collection of relevant information is needed at every point
in thesupply chain.
Data synchronization focuses on the timely and accurate updating
ofitem information within and across enterprises.
Functional expertise in each organization will be enhanced by
access tothe synchronized data.
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Planning
Execution
Supply chain execution tools and suites carry out key tasks
from the time an order is placed until it is fulfilled. This
order-
driven category of software focuses on the day-to-dayactivities
required to buy, make, and deliver the materials that
flow through the supply chain.
Event Management
Supply chain event management tools collect data in real
time from multiple sources across the supply chain andconvert
them into information that gives business managers
a clear picture of how their supply chain is performing.
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Enterprise Resource Planning (ERP)
ERP systems are multimodule application software platforms
that help organizations manage the important parts of their
businesses.
ERP systems branch out to include supplier relationship
management, customer relationship management, and other
supply chain components, the connections between SCIS and
ERP grow stronger.
ERP system provides a mechanism for supply chain members to
efficiently share information
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Figure 6-6 ERP Integration of Supply Chain Technology
Capabilities
Source SAP AG
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Source: Manhattan Associates, Inc.
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Data Standardization
Coordinating and sharing information across the supply chain can
be a
significant challenge.
EDI provides interorganizational, computer-to-computer exchange
ofstructured information in a standard, machine-processable
format.
XML is a robust, logically verifiable text format based on
international
standards. It provides a flexible way to create structured,
common
information formats and share both the format and the data via
the
Internet, intranets, and other networks
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Radio-Frequency Identification (RFID)
RFID is an automatic identification method. RFID tags consist of
amicrochip and a printed antenna that can be packaged into many
forms,such as a label, or imbedded in between the cardboard layers
in acarton or product packaging.
Unique product identification information, in the form of a
universalelectronic product code (EPC) identifying the
manufacturer, productcategory, and individual item, is stored on
these 96-bit tags.
RFID technology costs must continue to decline to make
producttagging economically feasible; equipment issues such as
reader range,
sensitivity, and durability must improve; the case for supplier
return oninvestment of RFID mandates must be made; and consumer
privacyissues must be resolved.
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Adaptive Supply Chain Networks
These integrated, flexible networks of companies, technology
tools, and processes focus on customers and their
changingrequirements. An effective ASCN can respond to changes in
real
time, allowing the network to prevent or minimize supply
chain
problems.
ASCNs help meet the growing need for supply chain
connectivityand collaboration, two key information issues.
Connectivity
provides visibility.
