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.
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.
COMPONENTS OF EDIEDI 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 .
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.
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 INTERNETAPPLICATIONS 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 MANAGEMENTSYSTEM Flexible Business Process Management Unified Data Model Robust Integration Framework Self-service Tools
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