8/2/2019 REDDY M 5

1/16

MODULE -5IT IN THE SUPPLY CHAIN

BY:

LAKSHMI NARAYANA REDDY.KMBA,PGDFM,M.Phil

8/2/2019 REDDY M 5

2/16

MODULE 5

Information Technology in the supply

chain

IT Framework

customer relationshipmanagement internal supply chain

management supplier relationship

management

transaction management

future of IT.

8/2/2019 REDDY M 5

3/16

Role of IT in supply chainInformation is the most important of the four supplychain drivers, without this they cannot deliver high levelof performance.

Information provides foundation, Supply chain processexecute transactions and managers make decision.

IT consists of the hard ware and software throughoutsupply chain that gather, analyze and act an information.

The application of IT to the process of planning andcontrol of supply chain activities has grown rapidly withthe introduction of micro computers in 1980s .

IT systems to capture and analyze information can

have significant impact on firms overall performance.

8/2/2019 REDDY M 5

4/16

Information is the driver that serves as the glue to create

a coordinated supply chain Information must have the following characteristics to be

useful:1. Accurate2. Accessible in a timely manner3. Information must be of the right kind

Information provides the basis for supply chainmanagement decisions

1. Inventory2. Transportation

3. Facility Information used at all phases of decision making:strategic, planning, operational

Examples: Strategic: location decisions

Operational: what products will be produced during todaysproduction run

8/2/2019 REDDY M 5

5/16

Inventory: demand patterns, carrying costs,stockout costs, ordering costs

Transportation: costs, customer locations,

shipment sizes Facility: location, capacity, schedules of a facility;

need information about trade-offs betweenflexibility and efficiency, demand, exchange rates,taxes, etc.

8/2/2019 REDDY M 5

6/16

Information technology (IT)

1. Hardware and software used throughout thesupply chain to gather and analyze

information.2. Captures and delivers information needed to

make good decisions.

Effective use of IT in the supply chain can have asignificant impact on supply chain performance.

Relevant information available throughout thesupply chain allows managers to make decisionsthat take into account all stages of the supplychain.

Allows performance to be optimized for the entiresupply chain, not just for one stage leads tohigher performance for each individual firm in thesupply chain.

8/2/2019 REDDY M 5

7/16

IT framework in Supply Chain

Developing a framework that helps a managerunderstand how this information is utilized by thevarious segments of IT within the supply chain.

It describes supply chain macro process:1. Supplier relationship management (SRM)

2. Internal Supply chain management (ISCM)

3. CRM

4. Transaction management foundation.

Why Focus on the Macro Processes?

Macro Processes Applied to the Evolution of

Software

8/2/2019 REDDY M 5

8/16

Macro Processes in a Supply Chain

Supplier

Relationship

Management(SRM)

Internal

Supply Chain

Management(ISCM)

Customer

Relationship

Management(CRM)

Transaction Management Foundation (TFM)

8/2/2019 REDDY M 5

9/16

CRM

CRM process that focus on downstream interactionbetween the enterprise and its customers.

The goal of CRM is to generate customer demandand facilitates transmission and tracking of orders.

Four major key processes in CRM :

1. Marketing

2. Sell

3. Order Management

4. Call / Service center

CRM is a starting point in improving the supply chain

performance.

8/2/2019 REDDY M 5

10/16

Internal Supply Chain Management

This focus on internal operations within the enterprise.

ISCM includes all processes involved in planning forand fulfilling a customer order.

It includes:1. Strategic planning

2. Demand planning

3. Supply planning

4. Fulfillment

5. Field services.

The main objective is to fulfill the demand generated

by CRM

8/2/2019 REDDY M 5

11/16

8/2/2019 REDDY M 5

12/16

Transformation management foundation

It acts as a software building block that providesfoundation upon which the macro process rest.

It includes basic ERP systems, information software,

and integration software. TMF software is necessary for the 3 macro

processes to function and to communicate with eachothers.

ERP systems are rapidly gaining popularity therewas little focus on the 3 macro process we discussedearlier.

Many ERP players includes oracle, people soft, JDEdwards and Baan.

8/2/2019 REDDY M 5

13/16

8/2/2019 REDDY M 5

14/16

Future of IT in Supply chain

It provides an integrated product that increasesthe linkages between the macro processes.

At the highest level, the three SCM macroprocesses will continue to drive the evolutionof enterprise software

Software focused on the macro processes willbecome a larger share of the total enterprisesoftware market and the firms producing thissoftware will become more successful

Functionality, the ability to integrate acrossmacro processes, and the strength of theirecosystems, will be keys to success

8/2/2019 REDDY M 5

15/16

Supply chain IT practice

Select I.T system that addresses thecompanys key success factor.

Take incremental steps and measure value.

Align the level of sophistication with the needfor sophistication.

Use of IT systems to support .Future of IT.

8/2/2019 REDDY M 5

16/16

THANK YOU