Chapter_2_PPT.pptx

Chapter 2
Logistics and Information
Technology
Contemporary Logistics 12th Edition Paul
Murphy

Murphy
Learning Objectives
• Toappreciatethe importanceof effectiveand efficient utilization
of information for logistics management.
• To learn about general types of information systems and their
logistics applications.
• To look at the Internet’s influence on logistics.
• To learn about select information technology challenges.

Murphy
Benefits of efficient and effective
utilization of information
1. Greater knowledge and visibility across the supply chain,
which makes it possible to replace inventory with information.
2. Greater awareness of customer demand via point-of-sale
data, which can help improve planning and reduce
variability in the supply chain.
3. Better coordination of manufacturing, marketing, and
distribution through enterprise resource planning (ERP)
systems.
4. Streamlined order processing and reduced lead times
enabled by coordinated logistics information systems.

Murphy
Data & Information
• Data are simply facts – recorded measures of certain
phenomena
• Information is a body of facts in a format suitable for decision
making
• Big data – the collection of large amounts of near-real-time
data collected through a variety of sources, i.e. sensors,
smartphones, RF tags and business-to-business data
exchanges.
• The opportunity will be to use this data to sense changes in demand
and then use logistics activities to effectively and efficiently
respond to these changes.

General types of information
management systems
Murphy

Murphy
Office Automation Systems
• Office automation systems provide effective ways to process
personal and organizational business data, to perform
calculations, and to create documents.
• Eg: word processing, spreadsheet, presentation, and database
management applications.
• Today spreadsheets have developed to the point that they are
able to solve for basic logistics optimization models.
• Logistics optimization models utilize spreadsheet software and
add-ins to help logisticians make complex judgments and
decisions about key logistics issues at strategic, tactical,
operational and collaborative levels.

Murphy
Communication Systems
• Communication systems help various
stakeholders—employees, suppliers,
customers—work together by interacting and
sharing
information in many forms.
• Global positioning systems (GPS) – refers to
a networkof satellites that transmits signals
that pinpoint the exact location of an object.
• An increase in worker productivity, reduced operating costs, and
improved customer relations.
• Tablets becoming important contributors to logistics decision
making.

Murphy
Eg: fax machines, personal computers,
electronic mail, cellular phones, tablets and
smart phones were considered “luxuries” but
is viewed as essential in today’s workplace.

Murphy
Transaction Processing Systems
(TPS)
• Transaction processing system (TPS) - collects and stores
information about transactions and may also control some aspects of
transactions.
• The primary objective of a TPS is the efficient processing of transactions,
and org. can choose to do batch or real-time processing.
• Electronic data interchange (EDI) – the computer-to-computer
transmission of business data in a structured format.
• Automatic identification technologies – essential component in
point-of-sale (POS) systems and the idea behind POS systems is to
provide data to guide and enhance managerial decision making.
• Radio-frequency identification (RFID) technology is another automatic
identification technology.

Murphy
With batch processing, data are collected and stored for processing at a later time, with the
later time perhaps being based on schedule (e.g., process every six hours) or volume (e.g.,
process once 25 transactions have accumulated) considerations.
Real-time processing means that transactions are processed as they are received. Although batch
processing might be somewhat out of step with the contemporary emphasis on speed and time
reduction, it can be quite effective when real- time processing is not necessary. Moreover, in
comparison with real- time systems, batch processing tends to be less costly and easier for
employees to learn.
EDI
• Provides seamless transmission of data across companies (assuming technological
compatibility), it can facilitate the integration of, and coordination between, supply chain
participants.
• Common uses of EDI include invoicing, submission of purchase orders, pricing, advanced
shipment notices, electronic funds transfer, and bill payment.
• Potential drawbacks to EDI include a lack of awareness of its benefits, high setup costs, lack of
standard formats, and incompatibility of computer hardware and software.
Automatic identification technologies nclude optical character recognition (which can read letters,
words, and numbers), machine vision (which can scan, inspect, and interpret what it views), voice-
data entry (which can record and interpret a human voice), radio- frequency identification (which
can be used where there is no line of sight between scanner and label), and magnetic strips.

Murphy
Radio-frequency identification (RFID)
•Conceptually, RFID involves the use of radio frequency to identify objects that
have been implanted with an RFID tag.
•Operationally, RFID consists of three components: a scanning antenna, an RFID tag
(chip) that conveys the relevant data, and a transceiver that interprets the data.
•Compared to bar codes, RFID (1) does not require clear line of sight between an
object and
RFID hardware, (2) can store much larger quantities of data, and (3) can offer both
read and write capabilities.
•Drawback to RFID involves privacy concerns, such as the inappropriate use of the
technology. For example, a major retailer embedded RFID chips into a particular line
of cosmetic products, and consumers who selected this product from the store shelf
were beamed, via webcam, to the manufacturer’s headquarters!
•Yet another drawback is that data accuracy can be lower in items with high moisture
content, such as fruits and vegetables.
•aMajor drawback of RFID adoption involves the costs of installing the related hardware
and
software, which can range from $100,000 for smaller companies to $20 million for
larger companies.

Murphy
Management Information Systems
(MIS) and Executive Information
Systems (EIS)
• Logistics information systems (LIS) – the people, equipment and
procedures to gather, sort, analyse, evaluate, and distribute
needed, timely, and accurate information to logistics decision makers.
• For logistics managers to receive needed information, it’s important that
they be fairly specific when submitting requests.
• Timely information would appear to be incumbent on the effectiveness
and efficiency of a company’s particular LIS.
• Timely also can refer to how quickly managers receive the information requested;
this is affected by each company’s retrieval and dissemination procedures.
• Accurate information may also reflect the effectiveness and
efficiency of a company’s logistics information system.

Murphy
Decision Support Systems (DSS)
• Decision support systems help managers make decisions by providing information, models, or analysis tools, and
they can be widely applied and used by logisticians.
• Simulation is a technique that models a real-world system, typically using mathematical equations to
represent the relationships among the system’s components.
• Application-specific software help managers deal with specific logistics processes or activities.
• On-demand software (also referred to as software-as-a-service or cloud computing) is software that users
access on a per- use basis instead of software they own or license for installation.
• Transportation management systems (TMS) are software package that automates the process of building
orders, tending loads, tracking shipments, audits, and payments.
• Warehouse management systems (WMS) are software packages that provide oversight of the storage and flow
of materials within a company’s operations i.e. inventory management, product receiving, determination of
storage locations, order selection processes, and order shipping.
• Data mining utilizes sophisticated quantitative techniques to find “hidden” patterns in large volumes of data; these
patterns allow managers to improve their decision-making abilities as well as enhance their organization’s
competitive advantage.
• Data warehouses is a central repository for all the relevant data collected by an organization.
• Machine learning is a computer-based discipline leverages algorithms that can “learn” from data. These
algorithms use data to build and constantly update their prediction models for activities such as forecasting.

Murphy
Enterprise Systems
• Enterprise systems create and maintain consistent data
processing methods and an integrated database across multiple
business functions.
• Enterprise resource planning (ERP) systems, which “lets a
company automate and integrate the majority of its business
processes, share common data and practices across the
enterprise, and produce and access information in a real-time
environment.”
• Shortcomings:
1. ERP software is relatively expensive; however, the software is only one
part of ERP implementation costs.

Murphy
THE INTERNET’S INFLUENCE ON
LOGISTICS
• Online retailing
• Cloud computing
• Electronic
Procurement
• Internet of Things
(IoT)

Murphy
Online Retailing
Characteristics of online retailing:
• More plentiful and in much smaller quantities
• Requiresan order managementsystem capable of handling
high volumes of orders
• Packaging implications – small cartons, envelopes, bags
• Transportation and returned orders
• Variety of logistics strategies is required

Murphy
Cloud Computing
Characteristics of cloud computing:
• Pay-per-use formula
• Faster and less-costly installation
• Smaller information technology staff
• Regular upgrades and updates from the software
provider
• Drawbacks
• Updates are too numerous and too frequent
• Security issues i.e. data protection

Murphy
Electronic Procurement (e- procurement)
Characteristics of e-procurement:
• Uses the Internet to make it easier, faster, and less expensive for an organization to purchase
goods and services
• Transactional benefits are a measure of the benefits of enhanced transactional efficiency (e.g., a
reduced invoice-to-payment time) associated with e-procurement
• Compliance benefits focus on the savings that come from adherence to established procurement
policies
• Management information benefits encompass those that result from management
information, customer satisfaction, and supplier satisfaction levels after
implementation of electronic procurement
• Price benefits are those that are given as the result of adopting e-procurement
• Drawbacks
• Security issues
• Impersonal
• Require skills and knowledge

Murphy
Internet of Things (IoT)
Characteristics of IoT:
• Refers to the sensors and data-communication technology that
is built into physical objects that enables them to be tracked
and controlled over the Internet
• Provide valuable information and business insights
• Drive value in the supply chain and logistics disciplines
through improvements in employee productivity and
enhanced customer interactions

Murphy
The potential benefits of the IoT extend across all types of logistics
activities, including such areas as warehousing, transportation, and
last- mile delivery. For example, a forklift being used within a
warehouse setting to move products can now be the source of
valuable information accessed via the Internet. This forklift can be
equipped with wireless connectivity, data storage, and sensors that
can provide a variety of operational data about itself and the
environment it operates within. For example, the forklift could alert
a warehouse manager to potential mechanical or safety issues
prior to anything occurring. The forklift could also provide enhanced
visibility of inventory within the warehouse. Thus, the forklift moves
beyond just moving a product, to become a mobile information hub
that collects and processes information for enhanced logistics
performance.

Murphy
INFORMATION TECHNOLOGY
CHALLENGES
1. The recognition that information technology is a tool that can
help managers address organizational problems.
2. Security concerns
• Theft of proprietary information
• Decreasing size and increasing portability of technology devices
are susceptible to loss of theft of device and DATA.
3. Human resource issues
• People-related factors such as employee resistance have been
identified as a major cause of information technology implementation.
• Technology addiction – uses of smart phone obsessively and
addictively.

Murphy
Technology is not a panacea or a be-all/end-all solution for
organizational problems. This can be illustrated by the situation
of a senior manager whose disorganization caused him to
often miss regularly scheduled meetings with various
constituencies. The senior manager and his boss decided to
“solve” the missed meeting problem by providing the manager
with a smart phone that contained a calendar detailing the time
and place of his various meetings.
Unfortunately, the senior manager continued to miss regularly
scheduled meetings because he occasionally failed to (1) carry
the smart phone with him; (2) have the smart phone turned on;
and (3) upload the meeting information into the smart phone’s
calendar. In this situation, the technological “solution” could not
address—and may have actually exacerbated—the manager’s
disorganization.

Murphy
Discussion Questions
1. In what ways can information be helpful in logistics and
supply chain management?
2. What advances in technology do you view as being most
beneficial to logistics management? Why?
3. From a logistical perspective, what are some of the
differences between online and in-store retailing?

Murphy
1) In what ways can information be helpful in
logistics and supply chain management?
• There are several ways in which information can be helpful in
logistics and supply-chain management. These include, but are
not limited to, greater knowledge and visibility across the supply
chain, which makes it possible to replace inventory with
information; greater awareness of customer demand via point-
of-sale data, which can help improve planning and reduce
variability in the supply chain; better coordination of
manufacturing, marketing, and distribution through enterprise
resource planning tools; more streamlined order processing and
reduced lead times enabled by coordinated logistics information
systems.

Murphy
Correct ans for q1
• To make decisions -logistics and supply chain managers can work
together to create an integrated supply chain. you know what
customers want, which raw materials to use in the production process,
how much inventory is in stock, when the product should be distributed
or shipped. secondly, firm's
performance increases coz with accurate info that leads to effective
decisions, it helps to avoid error. hence, firm's productivity increases as
well as performance. everyone is happy. third, greater knowledge
within all the functions of business. everyone know what is going on
with the info available, therefore, achieving organizational objectives
and goals.

Murphy
2) What advances in technology do you view as being most
beneficial to logistics management? Why?
• Today, most companies are using social media to enhance the
growth of their businesses as well as improving the value of the
businesses. In the logistics and supply chain industry, the
adoption of social media has been relatively recent, and it has
brought about its share of benefits. These include increasing the
visibility of the organizations, building brand images, driving
campaigns, and attracting new customers, hence expanding
markets. This is along with increasing both the market and
business intelligence (Murphy & Knemeyer, 2014).

Murphy
• I believe that one of the most important advances in telecommunications technology
is the smart phone and tablet. I used to think that personal computers were the future
of telecommunications, but they are thing of the past. Laptops, tablets, and
smartphones have taken over. They are lightweight and compact and can pack as
much power as a personal computer. We are making the transition into the “wireless”
phase of communication from calling, texting, e-mailing, to video conferencing. The
fact that this technology is wireless, it can be taken virtually anywhere, and logistics
updates can be made at any time. This makes inputting data and communicating with
vendors and suppliers extremely easy. Certain apps can be used to manage
inventory, shipping, and transportation. The ADC (automatic data capture) need is
changing from wireless handheld scanners, and bar code printers to rugged tablets
that can do the same. Supervisors want mobile access to applicants to tweak labor
resources and monitor real-time trends.

Murphy
•I feel RFID - because its more advance then barcode. it can be
used in every process and steps of logistics and supply chain
management. it can be in transportation. RFID technology
can be used for Vehicle Tracking and identification. This
will reduce labour costs for vehicle processing and decrease on-
site dwell time, enabling better yard throughput and increased
responsiveness to dealer and customer. in the manufacturing
process, RFID technology to help them run more efficient
operations that help minimize production down time, optimize
material and parts inventories, and improve and maintain
optimal labour output.
Correct ans for q2

Murphy
3) From a logistical perspective, what are some of the
differences between online and in-store retailing?
• The orders that are in online shopping tend to be more overflowing and much smaller
quantities that those associated with in-store retailing. Online retailing requires an order
management system capable of handling high volumes of orders. Because of smaller
order quantities, online shopping is characterized by open case rather than being full
case picking. Open case picking is facilitated by materials handling equipment such as
totes and push carts.
• Online orders tend to be more plentiful and in much smaller quantities than in-store
retailing. Therefore, online retailing requires an order management system capable of
handling high volumes of orders. In addition, online shopping is characterized by
open-case picking, rather than full-case picking, and this necessitates packaging
containers, such as bags and envelopes, which are well suited to holding small
quantities of product. The smaller order quantities associated with online retailing tend
to favour transport companies with extensive delivery networks and expertise in parcel
shipments. Moreover, return rates for online retailing are higher than in-store retailing,
and thus online retailers should attempt to make the return process as painless as
possible.

Murphy
• Sensory info. in store purchases allow hearing, touch, smell and taste.
higher intention of buying. online, you know nothing, other than
reading customer review. second, time. online purchase can just be
done thru the online web, can do it anywhere using your phone. in
retail, you need to travel to the store, and there could be store traffic.
customers tend to leave if the transaction process has a long queue.
third, communication. online, people are not confident to purchase
coz there is not much info available, meanwhile retail, you can ask as
many quests to the staffs and they are willing to help.
• In fact, many Generation Z would prefer to buy in-store than
online.
Correct ans for q3

Chapter_2_PPT.pptx

Recommended

Recommended

More Related Content

Similar to Chapter_2_PPT.pptx

Similar to Chapter_2_PPT.pptx (20)

Recently uploaded

Recently uploaded (20)

Chapter_2_PPT.pptx