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Role of IT in Supply Chain Management

Shows how IT has changed the way Supply Chain works today. Includes EDI, ERP, Barcode and RFID.

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Role of IT in Supply Chain Management

  2. 2. Supply chain management (SCM) is concerned with the flow of products and information between supply chain members' organizations WHAT IS SUPPLY CHAIN MANGEMENT?
  3. 3. The IT Boom !Information flow in Supply chain prior to 1990s The importance of information in an integrated SCM environment:
  4. 4. EDIBenefits of EDI • Speed • Data transfer in real-time, no time shift (⇒ almost no time shift between sending and receiving) • Reduction of human failure rate by re-keying data • General cost saving (no more people, no more paper, faster data processing, etc.) • Reduced purchasing costs • Reduced cost by effective information processing ⇒ rationalization • Greater flexibility • Saved time • Better information • Better collaboration • Higher transparency
  5. 5. What is ERP? ERP attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ specific needs ERP
  6. 6. Explanation Logistics Production HR Finance Marketing & Sales  Enterprise does business and to do business it needs tools  An Enterprise has departments
  7. 7. In early 1970s ……
  8. 8. In 1990s
  9. 9. Drawbacks  Multiple software systems, databases and platforms  No streamlining processes and workflows  Redundant data entry and processes  No shared information across departments  Slow workflow and low efficiency  Less customer satisfaction
  11. 11. Moving to ERP  Expensive  Customization is limited  The system may suffer from weakest link i.e. an inefficiency in one department can effect other departments
  12. 12. ERP Vendors SAP Microsoft Dynamics Oracle Sage SYSPRO
  13. 13. The Supply Chain’s Strategic Importance Supply chain management is the integration of the activities that procure materials and services, transform them into intermediate goods and final products, and deliver them through a distribution system Competition is no longer between companies; it is between supply chains
  14. 14. Radio Frequency Tags Radio Frequency Tags: Keeping the Shelves Stocked Supply chains work smoothly when sales are steady, but often break down when confronted by a sudden surge in demand. Radio frequency ID (or RFID) tags can change that by providing real-time information about what’s happening on store shelves. Here’s how the system works for Proctor & Gamble’s Pampers.
  15. 15. 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 .
  16. 16. Characteristics of a Typical Bar Code
  17. 17. 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
  18. 18. 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
  19. 19. THANK YOU

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Shows how IT has changed the way Supply Chain works today. Includes EDI, ERP, Barcode and RFID.


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