The document discusses the role of information technology (IT) in supply chain management. It makes several key points: 1) Information is crucial to supply chain performance as it allows processes and decisions to be coordinated across the supply chain. 2) IT consists of the hardware, software, and people that gather, analyze and use information to help management make decisions. 3) Successful companies like Amazon and Walmart rely on the availability and analysis of supply chain information. The document then goes on to describe frameworks for IT in areas like customer relationship management, internal supply chain management, and supplier relationship management. It also discusses principles of supply chain information and how IT can help with integration.

1. INFORMATION TECHNOLOGY
FRAMEWORK
TEM 407: SUPPLY CHAIN MANAGEMENT
MD. GOLAM SAROWER RAYHAN
LECTURER, TEM, BUTEX

2. THE ROLE OF IT IN AN INTEGRATED SUPPLY CHAIN
• Information is a key supply chain driver because it serves as the glue that allows the other supply
chain drivers to work together with the goal of creating an integrated, coordinated supply chain.
• Information is crucial to supply chain performance because it provides the foundation on which
supply chain processes execute transactions and managers make decisions.
• IT consists of the hardware, software, and people throughout a supply chain that gather, analyze, and
execute upon information.
• IT serves as the eyes and ears (and sometimes a portion of the brain) of management in a supply
chain, capturing and analyzing the information necessary to make a good decision.
• For instance, an IT system at a PC manufacturer may show the finished goods inventory at different
stages of the supply chain and also provide the optimal production plan and level of inventory based
on demand and supply information.
• Availability and analysis of information to drive decision making is a key to the success Of a supply
chain. Companies that have built their success on the availability and analysis of information include
Seven-Eleven Japan, Walmart, Amazon, UPS, and Netflix.

3.  To support effective supply chain decisions, information must have the following characteristics:
1. Information must be accurate.
2. Information must be accessible in a timely manner
--(Information must be up to date & accessible)
3. Information must be of the right kind
--(Meaningless data should be avoided & important data should be recorded)
4. Information must be shared
 Information used when making a wide variety of decisions about each supply chain driver, such as—
• Facility
• Inventory
• Transportation
• Sourcing
• Pricing & revenue Management
THE ROLE OF IT IN AN INTEGRATED SUPPLY CHAIN

4. THE SUPPLY CHAIN IT FRAMEWORK

5. THE SUPPLY CHAIN IT FRAMEWORK
• Customer relationship management (CRM) focus on downstream
interactions between the enterprise and its customers.
1. Marketing: order decision taken by online platform, customer
selection, market selection, products selection
2. Sell: online sell through virtual platform
3. Order management: online order execution techniques (from
manufacturers' warehouse to consumer door)
4. Call-service center: 24/7 online customer service

6. • Internal supply chain management (ISCM) focus on internal
operations within the enterprise
1. Strategic planning: key internal planning of the company by IT
information
2. Demand planning: Demand forecast collection from various sources
through IT
3. Supply planning: products supply plan as per demand information
4. Order Fulfillment: successful delivery for ultimate customer
satisfaction & smooth SC process
5. Field service: includes service facility to customer though IT
THE SUPPLY CHAIN IT FRAMEWORK

7. • Supplier relationship management (SRM) focus on upstream
interactions between the enterprise and its suppliers.
1. Design collaboration: design of products by IT based software
2. Source: assists in the qualification of suppliers and helps in supplier
selection and supplier evaluation through IT
3. Negotiate: Request for quote-RFQ in IT server
4. Buy: Materials procurement, order management, approval of
purchase orders through IT
5. Supply collaboration: Collaboration in forecast, production plan and
inventory levels through IT
THE SUPPLY CHAIN IT FRAMEWORK

8. INFORMATION SYSTEM FUNCTIONALITY
• Supply Chain information is a critical component of a firm’s ability to respond
rapidly to the end consumer demand in today’s highly competitive marketplace.
Timely and accurate information is also critical for three reasons:
 Information on order status, product availability, delivery schedule and invoices
is perceived by customers as a necessary element of total customer service;
 Information can reduce inventory by minimizing demand uncertainty;
 Information increases flexibility with regard to how, when, and where resources
may be utilized for strategic advantage.
• Information integrates supply chain activities by building on four levels of
functionality:
 Transaction,
 Management control,
 Decision analysis,
 Strategic planning system

9. INFORMATION SYSTEM FUNCTIONALITY

10. INFORMATION SYSTEM FUNCTIONALITY
• Transaction:
Entry transaction on the receipt customer order
Assign inventory to the order
Material handlers to select the order
Movement, loading, delivery of the order
Pricing and invoicing the order
Getting customer feedback and response
Customer order
Performance
Cycle

11. INFORMATION SYSTEM FUNCTIONALITY
• Management Control:
• Management control is characterized by an evaluative measurement of past
performance and identifies alternatives.
• Information on common performance measures includes financial, customer
service, productivity, and quality indicators.
• transportation and warehousing cost per kilogram (cost measure)
• inventory turnover (asset measure)
• order fill rate (customer service measure)
• products per labor hour (productivity measure)
• customer perception (quality measure)
• It should have the capability for measurement of competitive effectiveness and
addition of potential improvement areas. This is accomplished through exception
reporting as information is being processed. Information provided through
exception reporting is often useful to identify potential customer or order
problems, inventory shortages etc.

12. INFORMATION SYSTEM FUNCTIONALITY
• Decision Analysis:
• This focuses on decision applications to identify, evaluate and compare logistics
strategic alternatives for managerial decisions.
• There are a number of analytical tools that are commonly available in most
supply chain application packages.
• Some of the common ones include inventory planning and management,
forecasting, vendor scheduling, vehicle routing and cost-benefit analysis of
operational trade-offs and arrangement, network and facility location planning
• However, unlike management control, decision analysis focuses on evaluating
future strategic alternatives.

13. • Strategic Planning:
• Strategic planning decisions include restructuring networks, exploiting firm
capabilities and market opportunities, strategic alliances and major customer
service improvements etc.
• The strategic planning level information must reflect lower-level data collection
and convert this into a wide range of business planning and decision-making
information.
• This information can then be used in models that assist in evaluating the
probabilities and payoffs of various strategies.
INFORMATION SYSTEM FUNCTIONALITY

14. PRINCIPLES OF SC INFORMATION
• Availability: Data or information should be available to forecast & analysis
• Accuracy: Data should be as accurate as possible as variance can occur from various
sources
• Timeliness: Data or information collection should be done continuously or in a
definite time interval
• Exception: Information should be on definite product specific not a product group
• Flexibility: Information should be as flexible as possible for analysis & further survey
• Appropriate format: Information should be collected in right format; incomplete
form can give wrong prediction

15. COST BENEFIT RATIO ANALYSIS OF TRADE OFFS
• Trade offs:
• A trade-off (or tradeoff) is a situational decision that involves diminishing or
losing one quality, quantity or property of a set or design in return for gains in
other aspects.
• In simple terms, a tradeoff is where one thing increases and another must
decrease.
• For example, in case of a manufacturing plant if cost of a product increases but
quality decreases. This situation is termed as trade off.

16. • Cost-Benefit Ratio Analysis:
• It’s a ratio of cost to benefit of a specific project or process to compare feasibility
between two processes.
• Project having higher ratio is much feasible.
• For example:
• There are two projects where project 1 is incurring a total cost of $8,000 and
earning total benefits of $ 12,000 so cost to benefit ratio = ($8000/$12000) = 0.66
• whereas on the other hand project 2 is incurring costs of $11,000 and earning
benefits of $ 20,000 so cost to benefit ratio = ($11000/$20000) = 0.55
• therefore, project 1 is much feasible than project 2.
COST BENEFIT RATIO ANALYSIS OF TRADE OFFS

17. INFORMATION SYSTEM INTEGRATION IN SUPPLY CHAIN

18. COMMUNICATION TECHNOLOGY
Electronic Data Interchange (EDI)
Internet
Extensible Markup Language
Satellite Technology
Radio Frequency Exchange
Image Processing
Bar coding & Scanning
Enterprise Resource Planning

19. COMMUNICATION TECHNOLOGY
• Electronic Data Interchange (EDI): information passed through electronic data;
order sheet, purchase order, order processing data, internal communication.
• Internet: base for communication medium.
• Extensible Markup Language: information transfer medium between firms and
service providers. A basic XML message consists of three components: the
actual information being transmitted, data tags, and a DTD (Document Type
Definition) or schema.
• Satellite Technology: allows communication across a wide geographic area such
as a region or even the world. Retail chains also use satellite communication to
quickly transmit sales information back to headquarters. Walmart uses daily
sales figures to drive store replenishment and to provide decision to marketing
regarding local sales patterns.

20. • Radio Frequency Exchange: using RFID tag to locate products in warehouse and
checking products originality.
• Image Processing: Image processing applications rely upon fax and optical-
scanning technology to transmit and store freight bill information like bills of
lading. Electronic images of the documents are then transmitted to a main data
center where they are stored on optical laser disks. QR code scanning is also
included here.
• Bar Coding and Scanning: Bar code attached to each & every product for scanning.
• Enterprise Resource Planning (ERP): The most updated communication system.
COMMUNICATION TECHNOLOGY

21. THE END